Interesting take on bad CIOs, and some of the things they do …

/. linked to this story on cio.com. I read it, and there are some gems. Things I have seen corporate IT leadership folks do.

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”.

Uh huh.

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.

Hmmmmm……

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3 thoughts on “Interesting take on bad CIOs, and some of the things they do …

  1. “Nobody ever got fired for buying IBM”

    It maybe a cliche but if your small company who has the better price goes out of business 6 months into the products life who is going to provide support ? Its piece of mind people are paying the extra money for.

  2. @anon:

    That argument may have worked 20 years ago, but it falls over flat in the face of realities today. Large companies are just as likely to go under and stop product support, be acquired and force a transition to a new product, whether or not the customer asked for it. Oracle is the primary example of this latter behavior, and there are lots of examples of the former. Large companies do not provide “peace of mind” in that rapidly changing business conditions will often result in critical to some-business’ product going away, without support.

    Moreover, in a world where all chips are effectively Intel or AMD, all hard disks are effectively the same, all boxes (you know, from the big vendors) are actually built by 3 contract manufacturers … it is hard to make a reasonable argument that there is larger risk in adopting better technology, than there is in adopting “branded” technology.

    The cheaper portion isn’t the only or primary aspect. But it is important in the mix. Our solutions represent less risk as they are open, and based upon open technologies, so if we go under, others can support them. Try that with our competitors proprietary boxes.

    At the end of the day, any closed/proprietary solution represents a risk and business dependency danger in the face of un-forseen business changes on the part of the supplier. Suppose Sun is successful in getting a world wide shipping injunction against NetApp. How happy will the proprietary NetApp customers be, when business conditions forbid them from getting support/service?

    At the end of the day our solutions offer lower overall risk and lower overall cost, as well as higher performance. The argument that “peace of mind” occurs with the other vendors is weak. We have support programs we have designed to address the fact that we don’t have a world-wide support organization. How do you solve the problem of fixing a remote machine in the event of an issue? Turns out the solution is quite easy, and lower cost to set up and operate than the 24x7x4 type solutions. Our customers seem to like it better, as the time to solution is measured in minutes in most cases, not in hours for first callback, and days for actual solution.

    So with all due respect, I disagree with your premise.

  3. Having been one of those ‘champions’ in a past job, I can attest to the basic claims — small vendors often have (significantly) better prices for as-good or better equipment. But as a small vendor, you should know not to respond to an emotional issue with logic — if a customer wants peace of mind, they are not asking a rational argument.

    Joe’s last paragraph started to answer this in, I think, a better manner — many small vendors end up contracting with big vendors to provide end-user support (Unisys, Xerox, etc.). Why not make this more apparent in your dealings with customers that have an “approved vendor list”? You could pose it as the best of both worlds — cheap up-front prices, and a big company to support you longer term.

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