The evolving IT service provider

IT service providers are evolving, and at quite a rapid pace. To take a case in point, I was invited to a gathering of more than 100 IT service providers and channel partners to talk to them about “How to sell to a CIO”. This is not the first time that I have spoken on this subject; earlier, it was to sales teams of large Indian and global IT companies, but it was different this time. The group comprised of mid and large sized companies who vie for business from the small and medium enterprise (SME), as well as large enterprises. This segment has to balance between different types of businesses — right from owner driven organizations with no formal IT organization as such, all the way to CIOs of large companies. And a lot of such service providers classify the SME business in terms of people, revenue and process.

It was interesting to observe that the audience comprising largely of CEOs and heads of sales (or service), listened with rapt attention. It was eerie in a way — there was absolutely no cross-talk, buzzing of mobile phones, or anyone getting up during the hour long talk (I am used to, and also guilty of, such behavior during conferences). The audience could associate with most references to vendor behavior — their wins and losses, joys and frustrations, ups and downs. It was as if their lives were being subject to scrutiny, at a scale never done before.

On the flip side, the participants had many questions on why CIOs ignore them, and at the same time want the CEOs to visit even for a small transaction. According to many, the CIO egos were a big put off. There were also many questions around the lack of transparency in decision making, the inordinate negotiation timeframes, and then expectations of how the services, goods or solutions should be delivered in super crunch time.

As I made an attempt to answer some of these concerns, it was evident that the CIO’s evolution is still an ongoing process. Not every CIO has evolved to a level of maturity where almost every business transaction is a win-win situation (or every interaction is looked forward to). There are no universal answers that can be applied to every situation, since the CEOs agreed that there is a serious need to impart skills within their teams in order to more easily manage the situation.

Governance applied to IT procurement was another heatedly debated aspect. While vendors like to work with the CIO towards long-term relationships, being the lowest price vendor is not the best criteria for selection in such a scenario. According to the vendors, value additions offered as proof of concept, training and education, post implementation handholding, and technology advisory should be given due weight while taking a decision on awarding the business. The channel partners also expect clear decision making cycles, so that they do not end up in the hands of “purchase departments” who measure only on the basis of savings over the initial offer or budget.

The relationship between IT service providers, channel partners, and the CIO is at best, symbiotic. We need each other to be successful, in our quest for achieving our objectives. A partnership built on shaky ground will not withstand the travails of time and pressure from internal as well as external forces. Trust has to be built upfront and sustained, for each others’ success. To quote my favorite management thinker (at least in 2010), “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself” – Peter Drucker.

As the IT service providers and channel partners evolve to understand their customers, the industry in which they work, the opportunities open to their customers, and work towards creating success for the CIO, it will be a challenge for some CIOs to now engage with them at a new plane of maturity and understanding. It the CIOs fail to achieve this, they may alienate themselves into a situation that will make success difficult.

Are CIOs up to the challenge? It still remains to be seen.