CIO Summit 2012: Partnership models the key to success
- 19 July, 2012 15:55
Calibre Global’s CIO has told the CIO Summit that a partnership model trumps traditional client supplier models because it shares the risk - and reward - between the vendor and client.
Jason Cowie, CIO at Calibre, which designs and delivers mine, rail and port materials handling projects, said traditional client supplier models can work and are valid models, but they are typically one-sided.
“[As the client, you might get] what you want out of the deal, but the other side feels quite cheated and frustrated,” he said.
On the other hand, if the client is not happy with a solution or price a vendor proposes, “you’re going to look at other solutions and you’re going to look at other technology, which means you’re going to rip out the technology that you’ve just bought,” he said.
However, Cowie said a partnership model, which he has implemented at three companies now, is based on a win/win approach which is formalised by a memorandum of understanding.
“The whole document is written around a philosophy of one team working together. It’s [also] an open book, so everyone has to show their prices,” Cowie said.
Cowie believes the four key steps to implementing a successful partnership model should include planning, buying, working together and rewards.
The planning step should include a sound IT strategy which can be presented to a vendor, even if the strategy is conceptual. This allows vendors to help develop solutions based around its products, according to Cowie.
He also said vendors need to be encouraged to take part in the project as something new – this will mean they will commit to the project and ensure both sides are on the same page.
The working relationship also needs to be 50/50, Cowie said, with the focus on ‘one’ team working together - Cowie said clients who think they can have everything in their favour are not entering a true partnership model.
“I’ve got a friend of mine who is a CIO and he says ‘I love partnering – I get everything that I want’, and I say ‘well, do you really think that’s a partnership? I’d probably tend to disagree’.”
Finally, rewards need to be agreed upfront, Cowie said, which allows “a big, nice juicy carrot at the end [and] everyone stays focused right until the end of the project”.
Cowie also advises CIOs should document how the partnering model should work. For example, ask what the client’s role is, what the vendor’s role is and what the joint role is.
“When you ask a vendor ‘what do you want out of us?’ that will surprise some of them,” Cowie said.
“If you do that and they document what they want then they’re going to be committed to it. If you try and shove the benefit down their throat … then it’s not really a partnering model.”
However, there can be several challenges to implementing a partnership model. For example, Cowie said one of the biggest challenges is getting the executive team to adopt it – it is essential to have the executive team, and in particular the CFO, on board.
“If your CFO isn’t on board, you’re probably going to struggle and constantly be arguing with the CFO,” Cowie said.
He advised CIOs receive CFO approval prior to speaking to vendors, “because if you get the vendors excited and the CEO or CFO won’t sign off on it, you’re going to look a bit silly”.
The IT strategy also needs to be sold to local account and state managers. For CIOs who run into roadblocks with account managers who aren’t on board with the idea, Cowie recommended talking to the state manager and requesting a new account manager.
“The first question the state manager will have is ‘why do you want someone else?’ and then you can explain the vision and what you want to do and hopefully they will choose the right account manager for you,” he said.
“…we have an exclusive right to veto account manager selection and we hire our account manager by personality, not by how good they are with contractual teams.”
Cowie also recommended using vendor knowledge and experience to help develop projects together.
“You don’t have to do everything yourself and you don’t have to do everything internally. Your infrastructure administrators, I’m sure, would disagree. Your engineers would disagree, [but] I believe in using the vendor resources as much as you can,” he said.
Ultimately, Cowie said if clients can get vendors excited enough about projects, they may be more willing to go beyond a standard approach to winning a contract.
For example, Cowie said the board of a company once told him they liked his IT vision but the funds weren’t available to back it.
“We had one vendor give us $2.5 million of software for free for two years and one vendor who agreed to fund all hardware for a year to get the pilot up and running, and if it was successful we had to pay a portion of that money back,” he said.
“If you get the right vendor and the right excitement, you can get them to put money in and resources in.”
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