How 7 CIOs manage vendor relationships

Getting the most effective IT at the best possible price is a perennial concern for CIOs.

IT giants and startups can both offer great products, but finding the right fit for each organisation and developing long-term partnerships can be a tricky task.

CIO UK spoke to some of the country’s top IT business leaders about their vendor management strategies.

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Dylan Roberts needs different pieces of software to work together in the products he rolls out to citizens, such as a multimodal transport app that integrates solutions from a variety of transport companies and data firms, but vendor lock-in often makes this difficult.

“If they provide solutions which lock you in and they won’t easily interoperate or integrate with each other then how can you have a multi-modal transport app?” asks the Leeds City Council Chief Digital and Information Officer.

“The current IT market is still a bit in the old world, and that is where they look to try and do everything themselves, whereas in the new world – this is my opinion now – it’s impossible for one single vendor to do everything, they need to open up a lot more.

“If you look at companies like Microsoft, the super companies of the past which try to provide everything, even they realise now that they have to open up and be a bit more platform-agnostic.”

He’s responded to this problem by working with IT professional bodies to disrupt the market and create more open, dynamic, and standards-based systems to benefit the public.

The council also invites tech companies to test their ideas through his ‘city as a platform’ concept. They can then collaborate with the Leeds digital sector to understand the local issues and then scale up their products to sell across the UK.

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Royal Brompton & Harefield NHS Foundation Trust CIO Joanna Smith avoids investing in developing in-house IT services that third-party vendors can do better.

Smith’s digital transformation strategy focused on a journey to the cloud that was guided by a thorough market assessment.

Her team spoke to a number of vendors and sought the advice of Gartner, who recommended approaching Microsoft and UKCloud. Between them, Smith says that “they came in at 10 to 20 times cheaper than the other vendors”.

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Eddie Stobart Logistics CIO John Court works with a broad spectrum of vendors, from the established tech titans to smaller companies that can help develop market differentiation.

“We work with a range of vendors from some of the major IT provider giants, such as BT and, for hardware and related services, IBM, through to highly specialised providers who are market-leaders in their field such as Quintiq, a world leader in optimisation software,” he says.

“The work we’re doing with them is to look at our overall supply chain network and model it and look at how we can make it even more efficient, by driving further efficiencies into the network.”

Eddie Stobart also invests in external vendors that can add value to the business, such as the e-commerce company iForce.

“One of the reasons that we acquired that business was that its technology was market leading,” says Court. “It was a great platform for further growth and to extend our overall e-commerce offering.”

Salford Royal Group Director of Digital Rachel Dunscombe works with companies of all sizes to tackle business problems in effective and innovative ways.

The strong vendor relationships she has established are crucial to creating digital services that benefit patients.

“In order to achieve our goals for healthcare we have truly partnered with a number of vendors big and small,” says Dunscombe.

“What has been important, regardless of size or geography, is an understanding of each other’s business, mutual respect, a building of trust and creating something new together that benefit both parties. My job has been to carefully choose partners based on their values and behaviours.”

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Global Radio Director of Technology & Operations David Henderson believes that signing extended outsourcing deals with big IT vendors is no longer a viable strategy.

Instead, he focuses on developing mutually beneficial partnerships with key strategic and working with a handful of smaller, innovative technology companies

“The whole supplier management thing is quite interesting because the days of the 10-year outsourcing deal are long gone,” he says. “We do very little outsourcing here; we’re trying to go much more deep into partnerships, risk-reward models where we share some of the gain.

“In a way you’ve got these shorter term, more ephemeral relationships that need to be deeper so there’s some real paradoxes in how you manage that because you’re not managing a five-year outsource deal anymore. Very few CIOs in the media space are signing those deals.”

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Yodel CIO Adam Gerrard has distilled his suppliers down to “a core of five or six partners” who are willing to collaborate, form partnerships and help add value to the company’s customers.

Gerrard takes a multi-vendor approach that encompasses both big vendors and smaller companies. He sells startups to Yodel’s executive leadership by emphasising that failures are inevitable on the road to success.

“You should allow people to fail, and continuously fail, because they might actually come up with an absolute gem,” he says.

His strategy for the cloud is to work with different vendors to find the right service for specific needs.

“We are already building links to two or three different cloud vendors, and we’re looking at broker services and how we can best be able to expand out as and when we need to.”

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AstraZeneca CIO David Smoley has consolidated the pharmaceutical giant’s key technology and IT partners, which has helped solve real business problems by understanding customer needs.

“We went through all of our procurement contracts, all the agreements we had with software and hardware vendors and service providers,” says Smoley.

“It wasn’t about cost-cutting, it was about prioritising relationships which were strategic, dynamic and helpful as opposed to others that were pure buy-and-sell, or kind of walk-away relationships.

“I think there are a number of companies that we work well with and I think at this point most of the successful companies are coming around and getting on board.

“Then emphasising those partnerships, which led to more creative thinking, to more creative and innovative solutions.”

He also works with startups to add innovation to the company.

“We are really trying to tap into the startup community,” he says. “We are working with many companies that didn’t exist five years ago, who typically have developed their products with only cloud, mobile and usability in mind.”

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