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CIOs Give Vendors Low Marks on Partnership

CIOs Give Vendors Low Marks on Partnership

A new metric called the Strategic Partner Index shows that CIOs see much room for improvement on the part of their most important IT vendors.

The CIO Executive Council, which is affiliated with CIO magazine, developed the index to help enterprise IT leaders evaluate their vendors based on a weighted list of 20 partnership actions. In a survey of 279 CIOs who provided 743 evaluations of vendors, less than half (46 percent) perceived their vendors as being truly strategic partners. The council defined a strategic partner as an "important vendor that has gone beyond effective delivery of systems and services to become a consistently transparent, responsive and trusted collaborator."

When CIOs rated their vendors, the average score was only 3.2 out of a possible 10. Vendor practices were weighted according to how important they were to CIOs. For example, honest and open communication was considered table stakes by CIOs and given a weighting of 1. Meanwhile, "joint ventures with shared risk and reward" was considered a complex and potentially valuable activity and was weighted a 4 (the highest).

Ken Piddington, CIO of Global Partners, says "most vendors only interact with CIOs when they are trying to sell something or when there is a problem." Council members say a strategic partner is a different kind of vendor, one that goes beyond being a mere transactional seller to become a trusted and agile collaborator. The benefits of such a partnership include better working relationships, improved service levels and cost management, and better collaboration and communication.

For Ken Grady, CIO at New England Biolabs, the purpose of a strategic partner is simple: "I want you to be profitable, and me to be profitable, and for you to be less cost-per-unit over time." To accomplish this, Grady relies on mutually understood metrics and a shared risk-and-reward model to help both sides focus on shared goals.

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Tags business issuesvendor managementIT Organizationstrategic partnerIT Organization | Strategy

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