Business Issues -> Costs
Released: 24th September 2013
Over half of CIOs want to see their ICT partners demonstrate more business awareness, a new study has shown. Commissioned by TalkTalk Business, and conducted by Ovum, the Integrate Britain research surveyed CIOs and their Procurement counterparts in 200 large public and private sector organisations, to discover the true state of the enterprise’s relationship with the channel. The study unearths the enterprise’s desire for evolution – particularly around definitions of business outcomes and value.
Business, not just technology
57 per cent of CIOs surveyed cited low business awareness as one of their top three concerns regarding their channel partners; implying that some SIs and Value Added Resellers (VARs) may be getting too caught up in technical details, rather than seeing the big picture when it comes to their clients’ needs. In many cases, CIOs are getting more involved in ICT management, rather than relying on channel recommendations alone. Almost half (49 per cent) of CIOs surveyed wanted to be involved actively in selecting vendors for their projects, while nearly a third felt it was critical that they knew all suppliers involved.
“At TalkTalk Business, we work directly with a number of CIOs and feedback from our customers about the need for business understanding is universal. As cost management and project delivery pressures mount, CIOs are finding themselves in need of solutions that are simultaneously disruptive and innovative,” says Charles Bligh, Managing Director, TalkTalk Business, “The key to finding that balance lies first in identifying the reasons why customers ask for new technology – and then putting together a customised partner and product portfolio that can deliver accordingly.”
Flexibility has a key role to play too, with the majority of CIOs (58 per cent) believing that they are constrained by their channel partners’ vendor choices and two thirds (67 per cent) seeing an immediate need for more flexibility in existing product portfolios. Reassuringly for the channel, however, CIOs are realistic about the time it will take to deliver truly new vendor options and longer term portfolio evolution, with these on the agenda for the next 18 months, rather than immediately.
“CIOs can often be more reticent than they realise when it comes to sharing their business objectives,” says Bligh, “SIs and VARs who actively engage their customers in open discussions about underlying objectives – rather than just technical requirements – are in a better position to be viewed as a partner, not just a supplier.”
Value not price
CIOs are also rethinking how they define value in their ICT purchasing environment. Project cost management remains the highest priority but upfront price has less of a part to play than perhaps expected. Total cost of ownership over time (41 per cent) and getting the best business outcome (36 per cent) are considered primary indicators of success. Meanwhile, reliability of service and SLAs, which are often key factors in the channel’s offerings, come in significantly lower (3 per cent); lending credence to the idea that value is more broadly perceived and calculated than it once was.
“Defining returns on investment in purely technological terms is often easily done,” says Bligh, “Where SIs and VARs can showcase their input is by articulating those returns in terms of business objectives and outcomes achieved.”
Recognition of the need for change is not all one-way either; CIOs surveyed confessed that the enterprise has its own shortcomings, primarily around whether IT or Procurement agendas take precedence when purchasing decisions are made. Defining budget size and project scope is cited as the area most likely to cause dispute between the two departments during internal negotiations. Intriguingly, supplier track record is one of the least contentious areas of discussion; suggesting that in the modern ICT purchasing environment, suppliers must prove themselves repeatedly – even to audiences they may have believed they had already won over.
“CIOs are looking for channel partners in the literal sense of the term – SIs and VARs who understand the business challenges they’re facing, the terms by which they define success and the need to keep cost management top of mind at all time. SIs and VARs who acknowledge – and embrace – the need for evolution have a very real opportunity to build a strong foundation for future demands,” concludes Bligh.
Service Delivery Executive
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Published by: IT Analysis Communications Ltd.
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