by Adam L Stanley | Aug 8, 2011 | Relationships, Technology, Vendors and Partners
Vendor Relationships Critical Partnership Element #4: Ability to invest / Low Cost Providor
I recently ran an informal poll on LinkedIn that asked a relatively simple question:
Today’s IT leaders depend on a plethora of new players to drive change. What should CXOs most look for in a partner?
Here are the results ….
My next several blog posts will focus on each of the possible answers and share my thoughts, along with those of my respondents (public and otherwise), on why each of them are in fact critical.
I start with the one that not surprisingly received NO VOTES from my vendor-heavy polling group, “Ability to invest / low cost provider†and I will call this blog post “Have you MET the CFO?â€
Why Cost Matters
- The IT department has become a crucial partner with the business units to achieve greater ROI (return on investment). With IT costs being a significant chunk of shared services costs for the typical corporation, there is tremendous visibility on effectively managing these costs.
- According to a 2010 survey from Gartner and the Financial Executives’ Research Foundation (FERF), The CFO is increasingly becoming the top technology investment decision maker in many organizations. The study concluded that “CIOs must understand the impact their CFOs have on technology decisions in their organizations and ensure that they are providing the CFO with the appropriate understanding of technology, as well as communicating the business value that can be achieved.â€
- Every CTO or CIO has had at least one conversation in the last 24 months where he or she was asked to “discuss our objective to reduce overall IT costs by X% while maintaining or improving service quality and supporting our business growth.â€
- While there are MANY CFOs out there that have significant experience in technology, all too often CFOs view IT as a cost-center only, a shared service that is ripe for chronic annual reductions with or without regard for quality of service or innovation.
- According to a 2011 Gartner/FEI study, only about a quarter of the CFOs surveyed had confidence that their own IT organization “has the organizational and technical flexibility to respond to changing business priorities,” or “is able to deliver against the enterprise/business unit strategy.”
- The survey showed that CFOs “are inclined to invest in technologies where competitive advantage can be demonstrated, analysis and decision-making is assisted, or efficiencies and cost reduction are achieved.†See more
The fact is, no matter how much you want to pick vendors that have the coolest tools and the most trustworthy teams, each technology investment MUST generate positive return for our company. And, while there are SEVERAL factors in ROI, cost remains one of the most visible, even if not the most impactful. To get the attention of your CFO and thus your top management overall, you must be prepared with a cost effective value driving solution. So, a vendor that wants to bring something new to the table will often be asked to invest in the relationship by significantly reducing cost of entry for the client.
Vendor Relationships Tips for CIO/CTO
Yes, cost is critical, and yes vendors must realize this and be prepared to make an investment in a new relationship. That said, here are my thoughts on how the CIO/CTO should work with vendors to create win-win relationships.
1. Think about the marathon. Is this vendor someone that you want to work with in the future? Remember that a buyer’s market will ALWAYS become a seller’s market.  Payback is a …. Bummer. The recession may give you the upper hand now but when markets rebound, memories are long and you may be on the other end of the negotiating table. Think about the relationship as long-term and act accordingly. Negotiate in good faith, with integrity, and with fairness.
2. Remember tradeoffs. As you’ve often told your CEO/CFO, cost and quality are inversely relational. Do you really want to negotiate so hard your vendor has no ability to make any profit, thus forcing them to cut corners, bring junior resources, or otherwise fail? We signed a deal recently that we estimated would save us “an insane amount†in a particular area of our infrastructure. We squeezed the vendor so hard that the project was, frankly, a nightmare. The disruption to the business, the rework and errors, and the added costs to bring in additional resources took away much of the savings. Neither our team nor the vendors were happy in the end.
Mark Church, who was my Account Manager at Cisco when we awarded them “Vendor of the Year 2010â€, said it best in his response to the poll:
“I think one must evaluate both sides of the equation: Is it better to be the lowest initial cost, or the solution with highest return? Whenever possible, partners must strive for both but should be rewarded for driving transformation through innovation.â€
Amen!
3. Be authentic and honest. If you have trust in this vendor (and given this was in the top two responses in my survey I’m guessing you agree this is important), you should openly discuss cost challenges and ways the vendor may help your business. For years, I have had a practice of writing my annual cost reduction target in large numbers at the top of my office white board. Every vendor partner that meets with me can see the target. Vendors that are part of my strategic partner circle actively and regularly come prepared with ideas for helping me achieve the target.
I am proud of the relationships I have built with my vendors over the years and very much appreciative of the investments they have made to help me drive value for our clients. Most importantly, I hope they would all work with me again in the future based on the relationship we have built. While no one voted for “Ability to invest / low cost providerâ€, I would argue that perhaps that is because this more than the others could be considered “table stakesâ€. If you are so expensive I could not even begin to bring your technology to our executives – especially the CFOs of the world – trust, execution skills, and business knowledge just will not matter.
Which is Most Important?
Founder and CEO of New Relic Lew Cirne (twitter @sweetlew), said he was torn in making a selection. “Great list of options, nearly all are critically important,†he wrote in his comments after voting. I agree completely! All five of the characteristics are important. Frankly, the perfect vendor should have all, but in the era where there is a new technology, a new tool, some new social media outlet popping up every day, which would YOU put FIRST?
I would love to hear from you!
Be well. Lead on.
Adam
Vendor Relationship Series
“Trust – Guest blog by John Vincent of Broadgate Consultantsâ€Â | “Have you MET the CFO? | “Experts or Frauds?”
Resources:
- How To Squeeze Top Value From Your Technology Vendors – Investors.com – http://bit.ly/rjXNDM
- Vendor Negotiation: Squeeze Now, Pay Later CIO.com – http://t.co/KpMfCen (horrible, short-term strategy that was popular in early 2000s after the first tech bust)
- Forrester: How to squeeze your vendors | ITworld – http://bit.ly/nZRuBn (more balanced approach in worst days of recession – late 2008)
- CFOs Lack Faith in CIOs and IT Teams, Survey Shows CIO.com – http://bit.ly/ovklhQ
- The role of the CFO in cost reduction – http://bit.ly/oPrZsl
Adam Stanley
Adam L. Stanley Connections Blog
Technology. Leadership. Food. Life.
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by Adam L Stanley | Jul 7, 2011 | Technology
My dad recently began following me on Twitter. Of all of my followers (modest number but proud of all the new connections), this one is most exciting to me. I hope to have lots of baby boomers out there following me. Because I have a theory. For years, we have said that the Gen Y or Millenials should drive how we design applications and create experiences using technology. Thus, tech companies create the most complex apps and tools, adapting to the ever-changing whims of a rather fickle population. I would ask whether instead we should try designing for grandparents. “But they barely use technology? Gram still uses email for goodness sake!!” So why would we design for grandparents?
Look at the iPhone and iPad. When you compare it to Blackberry devices, Androids, and other devices it does not actually have as many options, is locked down, heavily restricts applications to Apple approved ones, and until recently did next to nothing in the cloud. Yet, look at it’s success.
My dad has over the years purchased dozens of phones, switch providers at least once every other year since I was 15, and tried Palms, BlackBerry devices, private label PDAs, and more. The most recent BlackBerry he purchased was the well-hyped Torch, RIM’s solution for the boredom resulting from most of their devices. Â He says that he bought BlackBerry devices “because they seemed to be the professional choice.” However, what frustrated him is they all operated in a different, more confusing way and still did not excite him. After several weeks of trying to learn the Torch, Dad sold it (on Craig’s list no less) and purchased an iPhone 4. Within hours, he said, he was proficient with the iPhone.
“Everything was intuitive, the apps were a delight and installed easily, and I understand the iPhone hysteria. I have used the droids, but they are merely poor copies of the iPhone, likewise the Android pads. Although Android technology is catching up, it still is ‘catching’ up, while Apples continues to evolve.”
Now, how is that for an endorsement. Perhaps Apple’s new ads should feature retirees and grandparents standing next to the PC guy instead of the cool young guy. Apple is looking to expand their market through pay-as-you go phones with no contracts. I think perhaps they should look to a different market segment, retiring baby boomers that can use their iPhones to skype (or Facebook videochat) with their grandkids, call the doctor, track their meds, etc. Â Meanwhile, perhaps Microsoft, Google, and others should try designing with these endusers in mind. I’m willing to bet that you design it right for them, and you’ll get the rest just fine.
Another interesting note from my Dad (sorry Microsoft):
“The Windows phones are an answer to a problem that didn’t really exist. Now you can buy a premium phone that will freeze just like your windows computer will. What a joy!”
Now that is a classic quote!
Thanks for your connection.
Best,
Adam
Which phone would grandma want?
Side Note: My dad is a hip, young, technically proficient and suave gentlemen (who reads my blogs) and certainly NOT an old man!
by Adam L Stanley | Jun 20, 2011 | Food
L20 Food Review
Summary: Recommended with reservations despite a very bad night.
L20
2300 N Lincoln Park W
Chicago, IL 60614
SHORT VERSION:
After a few rather disappointing meals at this and other 2011 Michelin rated spots, first I must say that a restaurant may get great reviews by critics but the best way to truly judge a place is to go for yourself. Alas, Michelin thus far has proven itself unreliable in my book. Â Under no stretch of the imagination could I see L2O deserving all three of the stars it received. MAYBE two stars. It merits a return visit but ONLY because there is no way service could consistently be as bad as what we experienced.
LONG VERSION:
Continuing on my Michelin star restaurant quest and admitting up front that this review is biased based on comparison to the other Michelin star restaurants at which I have dined. Â See all reviews of the list here
http://www.yelp.com/list…
Most relevant comparisons: Alinea (cost, presentation, length of meal), Ria (Chef from L2O plus staff from Ria would be a PHENOMENAL restaurant), Spiaggia (personality of the staff), Naha (decor)
Food: 4.5
– Bread was awesome, especially the milk bread and bacon filled yumminess they served (Note: bread is better at Girl and the Goat)
– Food was really amazing. Every course of the 8 course tasting menu was fantastic, well prepared and presented. Good looking plating but not so much emphasis on appearance that the food is crappy or cold. The chef rocks (but the house staff fails)
– Wine pairings ok but definitely not stellar. Better wine pairings for less at Ria and sadly, we never even saw the sommollier. Further, our server not only did not know how to pronounce the wine but she really did not have a clue why the wine worked well with each course.
Service: 2
Abysmal. Amateur. SOMEONE IMPORTANT was off that night. Honestly, there is no way this place could be this amateur on a regular basis. The four of us have been to dozens of the world’s best restaurants … Le Bernadin, Le Bec Fin, Ria, Everest, etc … so we know good service. And this was not good service. Out of 8 courses, only one was clearly explained. We sometimes waited ages for water refills and replacement linen napkins. For desert, one of my friends had cheese while the rest of us had the souffle from the tasting menu. Her cheese arrived with our desert wine. We waited and waited and drank the wine and shared the cheese. Then the souffles came out. It was the TASTING MENU. Were they surprised we were having the dessert on the tasting menu?
Sommelier was absent and server could not begin to describe wines
And NONE of the staff seemed to have a personality. There was nothing friendly about any of them. (Actually, the two women at the host station were very friendly but besides pointing me to the restrooms, that did not do much for me.)
Decor: 3
Felt like I was in a hotel lobby restaurant. Boring with a few hanging things to spice it up and give semi-privacy. Clean and elegant, but boring.
The Tatami room concept was ODD. At around 10pm, after we had been there for about 3 hours, we started seeing women in kimonos. They were greeting people at the host station and taking them to tables right near us. And occasionally they were taking them to a side room. We finally asked and they explained this was a private dining experience in the Japanese style. I don’t get that AT ALL as there is no link to the restaurant.
Value: 3
Same price range as Alinea but overall package nowhere near as memorable. For 4 people, our bill including tip was $1300+.
Overall : 3
I suspect that this was a very off night for L2O and the food alone would make it worth you trying it out. It merits a return visit because there is no way service could consistently be as bad as what we experienced. However, it is too expensive for what you get and there are at least five other restaurants I would go to first before returning to L2O. And under no stretch of the imagination could I see L20 deserving all three of the stars it received.
In relationship with #foodies,
Adam
Adam L. Stanley Connections Blog
Technology. Leadership. Food. Life.
AdamLStanley.com
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L’Anima (London) Food Review | Grace Food Review | Other Food Reviews
by Adam L Stanley | May 20, 2011 | Food
Blackbird Food Review
Summary: Recommended for great food.
Blackbird
619 W Randolph St
Chicago, IL 60661
I went here again last night to see whether the recent successes and awards had changed Blackbird. Specifically, I wanted to see if they too had gone down the path of appearance over quality.
I am happy to say that they have not. In fact, I find it interesting that the James beard award and the Michelin plague are nowhere to be seen, or perhaps in the hallway leading to the bathroom.
The service, food, and decor remain pretty much the same quality as they were 10 years ago when I first began to dine at this restaurant and long before our French friends came here to judge Chicago restaurants.
I do believe this place merits the Michelin star, and think 1 star was appropriate. It is better than many of it’s peers in the 1 star category. I would dine here again many times before heading back to the purees and foam of Alinea, lukewarm food and dated decor of Boka, stuffy pretentiousness of Spiaggia or overpriced snobbery of Sixteen (and, frankly, I will support nothing Trump related, but that’s another story …)
Here goes:
FOOD: 5
EVERYTHING is fattening, artery clogging, buttery goodness. Food looks good on the plate but emphasis is still on taste. Flavorful, savory food with interesting twists but not so much about the show that the food gets lost. This visit, I had as my appetizer the confit of suckling pig with fried ipswich clams. YUM!! Dinner was aged pekin duck breast with golden beets, chestnut soubise and munich malt. My guest (from UK) had the skate wing appetizer and the lamb. Both of us cleaned our plates and enjoyed dinner.
Portions are large enough to fill you up but still leave room for dessert, which we both had. Not a fan of the desserts, but mainly because in this category I am a “Joe Sixpack”. I want an apple pie or brownie with icecream and am unimpressed by fancy schmancy nondescript deserts.
DECOR: 4
Has not changed. Could get old, but it’s clean, crsip, minimalist. Uncomfortable seats to some extent but nothing that woudl keep me away. Slightly loud, but nowehere near Publican or Girl and the Goat levels of noise.
SERVICE: 4
Prompt service, attentive but not overwhelming. And many of the people there have been there for years. Small things like having my coat ready for me when I was done with my meal, the tasty amuse bouche at the beginning of the meal, excellent wine selection, and general friendliness (without being giddy) of the staff were added plusses.
VALUE: 4
Excluding our relatively expensive but great bottle of wine, we paid about $200 for the two of us to have full meal with appetizer, main, and dessert plus coffee. This included the tip. I would say this places Blackbird in the same value tier as Crofton or graham elliott.
OVERALL: 4
Most dinners I have had here: Amazing food and nothing healthy on the menu. No attitude amongst the staff or clientele and no need to wear suits and ties. Love it. Bring on the butter and bacon baby!
In relationship with #foodies,
Adam
Adam L. Stanley Connections Blog
Technology. Leadership. Food. Life.
AdamLStanley.com
Follow me on Twitter | Connect with me on Linked In | “Like†me on Facebook | Other Food Reviews
