Vendor Clout
You can screw down the governance, but does power also mean you can screw down the vendors? When you are in charge of a business that might spend hundreds of millions of dollars each year on information technology it might be fair to assume that you have power over some of the companies that sell technology and services. Even here CIOs are equivocal about the power they wield.
Centrelink's Wadeson reports that the vendors do not even always come to him. "The major vendors come in here and talk to the other deputies. I could feel very slighted but I don't because that is the best place for them so that the business gets an understanding."
Does he hold sway with the vendors themselves? "It's probably better to ask the vendors," he answers. But with $300 to $400 million a year to spend on IT, Wadeson definitely has sway, although as a government department his decisions, as were Kennedy's, are partly dictated by the tendering process. Wadeson sees the relationship he has with vendors as one of equals where it is important for him to spend time with the industry - both to find out what vendors are doing and how that might impact Centrelink - but to also provide vendors with insight into what Centrelink is trying to achieve, thereby giving them the opportunity to craft useful offerings.
In November for example, Centrelink held its first open industry day, inviting many smaller SMEs into Centrelink to learn how it operates.
If CIOs do not feel they have power over vendors, they certainly demand respect. Issa admits that the aggregate spending power of an organization like IAG does give him some leverage over the vendor. "I get a good deal but it's got to be a win-win and sustainable over the long term. If I find I'm not getting the best deal they can do on the day then I will walk away. If they are not doing that then I will cut the relationship because there is a lack of trust. That has happened in the past, although not now."
One less enlightened vendor view was reported by a CIO who claimed suppliers treated her differently because of her sex. "Suppliers do treat me differently. Very often you get: 'Oh, you're a female, who's your boss? Who do we have to talk to to make it happen?'" Most of the time a little direct education reminds vendors that they need to convince her and no one else. "The ones you don't get through to are the ones you don't use," she says.
Vendor gender has not been an issue for Santos's Bard, who says that although in the early days she had some vendors who attempted a divide and conquer approach with her, she has quickly reminded them who is in charge of Santos's IT, and that she understands the business better than they do. "With oil and gas application vendors, well I've worked for two of the majors, and I know how they work and what profit margins they work on. The vendors know my background and so I've been able to influence them."
Whatever their relationship with vendors, CIOs today are recognized as having more power in their organizations than at any time previously, according to Robert Ashe, president and chief executive of global business software firm Cognos. On a recent visit to Australia he told CIO magazine: "Go back five or six years and many CIOs were purveyors of infrastructure. Now there is more business involvement and the business sees them as powerful individuals, and that is partly influenced by the impact of IT on the organization.
"So a bank CIO, compared to other organizations where IT has less impact, and where you might not have the CIO at the senior management table, has comparatively more power. I'm damn sure that the CIO of eBay has a very powerful role."
And what of the CIO's power on suppliers? It is a consideration Ashe said, and big spenders can have a big impact on big vendors, although some smaller spending CIOs can be even more valuable. "As you get very important to these big suppliers then the CIOs push you to put more in the product. The big spenders can have a big impact, but equally important are the real innovators that might give us our next $100 million product," Ashe explained.
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