While reading it, I was thinking “gee, wouldn’t it be funny if the problem of vendor favoritism showed up?”. That is, when specific vendors are chosen above others, not because of technological reasons, or valid business reasons, but because the CIO or IT leader wants to do business with people they know. We see this in the form of “approved vendor lists”. Which, as a small vendor with a better product than the competitors (better, cheaper, faster), is a high mountain to climb. We have to find and cultivate champions and “risk takers”. People who want to do right by their organization, its mission, and its share/stake holders.
And, there waiting for me, midway through the article, was what I was looking for.
They play favorites with vendors.
Bojonny has also seen CIOs allocate generous contracts to prized vendors.
Other signs readers at CIO.com’s Advice and Opinion section have noted: Be skeptical if a CIO has previously worked for the vendor they recommend. And watch out if an IT executive asks his managers to perform detailed evaluations of expensive hardware and software repeatedly until the managers choose the vendors that the CIO wants.
You know, an approved vendor list. Keep “support costs down” by buying more expensive stuff from fewer vendors. Never mind that we need things not on our list, and make it harder to buy what we need, so we can keep buying from “the approved vendors”.
Every time we run into an “approved vendor list”, we have to bang heads with an IT or purchasing manager type who is absolutely convinced that they are getting better pricing on what they consider “the same” gear. When we demonstrate that they are not (all a vendor approved list does is lock out competitors, while locking in margin for a vendor on the list … it does *not* in any way shape or form, guarantee competitive pricing, and by its very nature, results in non-competitive and over-pricing), some new reason to deal with the over-priced under-performing “approved” vendor invariably comes up.
So, let me get this straight … reducing competition for business, guaranteeing fixed/higher margins for vendors, does exactly what for your business? Costs you more? Yes. Prevents you from seeing/buying faster better technology? Yes.
Yet, many of the large name vendors have absolutely locked up the large IT buying companies. We deal with some locally that have had fixed contracts to purchase all IT from (some large random 2, 3, or 4 letter company). In order for them to buy our (better, cheaper, faster) products, we have to get the people inside to fight a political battle for it. Yeah, we have to find someone to champion doing the right thing for the organization, within the organization.
That should give you pause.
One recent purchase, a customer had to write new sole-source memos to buy from us, even though they had an approved vendor, who didn’t have a competitive product, and would have charged them 2x or more to construct something with roughly equivalent functionality.
Another recent interaction has indicated that this company only works with tier-1 vendors. They purposely limit their interactions. They are convinced they are getting good pricing, though the information we have suggests, rather strongly, that they are being fed a line.
This isn’t their fault per se, it is the fault of the organization that sets IT policy. Which is the raison d’etre for CIOs in the first place. Fighting political battles to do the right thing can cost them if they lose. Career-wise, compensation wise, etc.
Sad really. Doing the right thing can cost you, because it goes against bad IT policy, set by people that CIO mag and others suggest you not hire.
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