CIOs prefer business savvy IT partners

by CXOtoday News Desk    Oct 01, 2013

business partner

Over half of CIOs want to see their IT partners demonstrate more business awareness, according to a new study by Ovum. The study surveyed CIOs and their Procurement counterparts in 200 large public and private sector organizations globally shows that enterprises desire for ‘evolution’, especially in the areas of business outcomes and value.

Business, not just technology

According to the survey commissioned by an UK-based firm TalkTalk Business, nearly 57% of CIOs surveyed cited low business awareness as one of their top three concerns regarding their channel partners - implying that some SIs and Value Added Resellers (VARs) may be getting too caught up in technical details, rather than seeing the big picture when it comes to their clients’ needs. As a result of this, CIOs often have to get more involved in IT management, rather than relying on channel recommendations alone.

Almost half (49 per cent) of CIOs surveyed wanted to be involved actively in selecting vendors for their projects, while nearly a third felt it was critical that they knew all suppliers involved.

“At TalkTalk Business, we work directly with a number of CIOs and feedback from our customers about the need for business understanding is universal. As cost management and project delivery pressures mount, CIOs are finding themselves in need of solutions that are simultaneously disruptive and innovative,” says Charles Bligh, Managing Director, TalkTalk Business.

According to him, the key to finding that balance lies first in identifying the reasons why customers ask for new technology – and then putting together a customised partner and product portfolio that can deliver accordingly.”

Flexibility has a key role to play too, with nearly 58% CIOs believing that they are constrained by their channel partners’ vendor choices and two thirds (67%) seeing an immediate need for more flexibility in existing product portfolios. Reassuringly for the channel, however, CIOs are realistic about the time it will take to deliver truly new vendor options and longer term portfolio evolution, with these on the agenda for the next 18 months, rather than immediately.

“CIOs can often be more reticent than they realize when it comes to sharing their business objectives,” says Bligh, “SIs and VARs who actively engage their customers in open discussions about underlying objectives – rather than just technical requirements – are in a better position to be viewed as a partner, not just a supplier,” says Bligh.

Value not price

CIOs are also rethinking how they define value in their ICT purchasing environment. Project cost management remains the highest priority but upfront price has less of a part to play than perhaps expected. Total cost of ownership over time and getting the best business outcome are considered primary indicators of success as suggested by nearly half of the CIOs interviewed. Meanwhile, reliability of service and SLAs, which are often key factors in the channel’s offerings, come in as low as 3%. This clearly implies that value is more broadly perceived and calculated than it once was.

“Defining returns on investment in purely technological terms is often easily done,” says Bligh adding that where SIs and VARs can showcase their input is by articulating those returns in terms of business objectives and outcomes achieved.

Recognition of the need for change is not all one-way either; CIOs surveyed confessed that the enterprise has its own shortcomings, primarily around whether IT or Procurement agendas take precedence when purchasing decisions are made. Defining budget size and project scope is cited as the area most likely to cause dispute between the two departments during internal negotiations. Intriguingly, supplier track record is one of the least contentious areas of discussion; suggesting that in the modern ICT purchasing environment, suppliers must prove themselves repeatedly – even to audiences they may have believed they had already won over. 

“CIOs are looking for channel partners in the literal sense of the term – SIs and VARs who understand the business challenges they’re facing, the terms by which they define success and the need to keep cost management top of mind at all time. SIs and VARs who acknowledge – and embrace – the need for evolution have a very real opportunity to build a strong foundation for future demands,” concludes Bligh.