How To Deal Effectively With Mega-Vendors

Endless mergers mean buying business IT increasingly requires dealing with a handful of mega-vendors: HP, IBM, Microsoft, Cisco, Dell and Oracle. Your best bet to score a bargain from these firms? Make sure you're not outnumbered by salespeople.

Megaphone picture from Shutterstock

Gartner analyst Michele C. Caminos offered that advice in a session on "mega-vendor management" at the recent Gartner Symposium in Queensland. While 80 per cent of IT budgets is typically spent with external providers, that scale isn't always matched with management resources at the business level.

"Who is managing that process? Typically one to three people," she said. "We need to make some investment here. One of the biggest challenge is having a formalised and strategic vendor management program."

Caminos suggests the following strategies.

  • Appoint a relationship manager. "Most organisations do have contract management and performance management. but who is doing the relationship management? If you're not doing proper relationship management, you're subcontracting that to the vendor, and they're all too happy to push their own agendas through."
  • "Put the most effort into strategic vendors. These are the vendors where for you to switch it's eye-wateringly high costs."
  • Don't fall for being told you're a "strategic partner". "The only time you're a strategic partner with a vendor is if you're sharing IP and you have a revenue-generating business model," Caminos said.
  • Match the scale of the vendor's sales team. "Hold a mirror to the vendor account management team. If there's 10 of them and one of you, it's clearly one-sided. We know it's costly, we know it's hard work, but the alternative is you continue to be a junior partner in this relationship."

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