What CIOs want

There is no doubt times are tough in the ICT marketplace. There have been troughs before, but not as prolonged as this one. The ICT industry stands at a crossroads in many ways.

Today, business priorities dictate that the CIO must spend less money but provide better service. The latest research from Gartner shows IT that budgets will not increase in 2003.

ICT companies need to carefully review the value proposition of their products and services, especially consulting firms, which are smarting from a spate of brand-damaging publicity. Past performance, according to Gartner, is proving to be a dampener on IT spending. Those companies that can bring real solutions to the customer, not just the opportunistic selling of product, will do comparatively very well in this market.

Under such adverse market conditions, ICT companies should also carefully review the modus operandi of their interaction with the customer and give more attention to the pivotal role of the account or relationship manager in the process.

Now is the time to invest in building the customer relationship and a demonstrable, solid understanding of the customer's business. Maintaining a proactive account relationship, even when the customer is not spending, is the key to success in the longer term.

To understand the current thinking of the CIO community in Australia, I surveyed 25 CIOs and three strategic sourcing directors in multiple industries ranging from primary production to gaming. The results were surprisingly consistent and reaffirmed the importance of price/performance and relationship management in a highly competitive, financially constrained marketplace.

1. CIOs want vendors to demonstrate an understanding of their business and present solutions, not products.

CIOs are being called upon by their leadership teams to deliver far more value to the business while reducing the total cost of operations. CIOs are playing a broader change management role in most organisations and are constantly looking for innovative solutions to achieve this. However, judging from the responses I got, the CIOs appear sceptical that the vendors understand this:

'Most account managers are good at box drops but poor at providing an overall solution including a service.'

'I wish they would stop trying to sell me anything unless they know it will benefit me - it's about meeting my needs not selling their product. I just turn off now when they assert "This is going to give you a productivity gain" without knowing my business in any depth.'

'I'm sick of the "over-promise and under-deliver" behaviours. Making big claims about how they can transform my business and follow it up with vague misleading material. Sadly there is still a lot of that.'

2. CIOs want to deal with someone who is reliable and follows through.

The power of fulfilling promises and building commercial trust seems to have been lost in the ICT industry gold rush. It was all too easy to fill the order book, harvest the account, then move on. But the 'wombat mentality' of the suppliers has not gone unnoticed and customers are now demanding much more. Reliability appeared often in the responses.

There is a strong dislike about not getting back to the customer by an agreed date and time, not returning phone calls or emails, not keeping promises, and not being responsive. A common thread emerged in the survey about account managers who only visit you when there is a sale to be had:

'I recognise that the role of the account manager is a real challenge at times but I really need him to represent me back into his organisation and get issues resolved in a timely manner.'

'I cannot over-emphasise the importance of delivering on the task at hand and not trying to up-sell when the task or project at hand hasn't been delivered.'

'I want to build a relationship based on trust and understanding even if this initially involves many months of work with no sales.'

3. They want realistic procurement terms.

Uncompetitive terms and conditions are readily apparent in this marketplace. It is important to structure deals that are appropriate for the particular business and industry.
Complex pricing models are difficult to explain as well as understand, especially if they are not based on local conditions. Northern hemisphere inflexibility in pricing and contract terms is still a major issue for most CIOs:

'The companies that go the extra yard get my discretionary spend. I don't want to hear what their company policy is when I have a problem, just find me a solution. Their company policy is their problem, not mine.'

'I really dislike account managers who are unable to control the interactions of their organisation with ours - so you get multiple communications going on across the business and significant disparities in pricing for the same offering.'

'It really bugs me when he's asked for a price and I reject it, and he then says "I can do better".'

4. They want continuity in the service relationship.

CIOs want effective communication on a continual basis. They are sick of the revolving door syndrome of account management by major ICT vendors. CIOs and strategic sourcing executives invest considerable time and effort into developing the account manager's knowledge of their business and its decision-making culture. Unfortunately it appears this investment by the customer seldom pays off, with the average tenure being around 18 months:

'No sooner than we've developed a relationship with someone who is making a difference then they are moved onto another account!'

Examples were given of account managers leaving the account for whatever reason without the customer being informed at all until they asked. This situation is often followed by the appearance of a new, keen account manager professing to want to develop a long and productive relationship but who then asks what the customer's key business drivers are!

'I will say that over the past 12 months we have seen two types of behaviour. Firstly, the account managers who have virtually disappeared as they have not seen us spending money, and secondly the others who have stayed in touch and appeared quite hungry for business and have worked really hard at finding compelling value propositions for us to consider. As you would expect, it is the ones who are still here that are getting the business, modest as it is at the moment.'

If ICT industry companies invest in their customers in these ways, the account climate changes. Commercially sensitive information gets shared and account plans get jointly developed. Customer service improves, resulting in higher customer satisfaction, leading to more predictability and more opportunities in the sales pipeline.

Jack McElwee is group IT director of PBL.