CIO Myron Hryck described supplier selection and management as “placing bets”, which as an analogy describes both the importance and the risk inherent in this critical part of the CIO role.
“As a CIO for a FTSE 100 organisation you don’t take wild bets. My definition of why they are bets is that these suppliers have to be safe in the long term, but also offer potential for future growth,” he told CIO UK in his first profile interview in 2010. Supplier management is a major responsibility for CIOs and never more so than at present with the increased focus on digital services and interactions with customers, which in turn is reinventing the supply chain via cloud and mobile technologies.
CIO UK has noticed through its CIO 100 how the supplier landscape has changed in recent years. Back in 2008, big one-stop-shop deals were pretty popular, in part because the economy was in terrible state following the financial crash and the CIO was looked upon to reduce costs. Today, CEOs want growth and innovation, and CIOs need a dynamic set of IT vendors which reflect the dynamic aspirations that the organisation is developing.
Today, CIOs talk of framework deals that incorporate a multitude of vendors from global giants to innovative start-ups.
This increases the pressure on CIOs and their team to be world class at vendor management.
Vendor management is challenging; a significant part of the vendor’s organisation is devoted to creating and selling contracts. That serried army of experts is, in most cases, significantly larger than your own team. Your team is measured on the outcomes that it delivers to customers and the organisation, and vendor management is a component of that responsibility. As a result, there is the potential for pitfalls to lie in wait for the CIO at every turn and, at all times, CIOs need strong advice and resources to ensure that they extract the most value from their suppliers and engaged in a meaningful relationship with the suppliers.
Alistair Maughan is a partner with one of the technology industry’s leading international law firms Morrison & Foerster and a regular writer on the legal complexities of CIO life. Members of CIO Plus are invited to meet Alistair and debate the intricacies of vendor management at an exclusive event on Thursday February 26.
Maughan has been a partner with Morrison & Foerster for over 10 years and practicing law since 1987. He leads the firm's European outsourcing team and is co-chair of the firm-wide Technology Transactions Group.
Maughan focuses on outsourcing and technology-based projects for major companies and public sector organisations. He has advised Her Majesty’s Revenue & Customs on Europe's largest "second generation" outsourcing; the UK police on its national fingerprint identification system and its project for the delivery and operation of the national UK emergency mobile radio network; the world's largest insurance broker on offshore outsourcing; and undertaken many other transactions on behalf of banks, global pharmaceutical companies and major professional services firms.
Maughan is a highly-regarded commercial lawyer with recommendations in Legal 500, Chambers Global and Chambers UK, leading independent guides to the legal profession. Chambers UK awards him the top ranking for both Outsourcing and Information Technology, commenting that he "brings common sense to the negotiating table".
Maughan has practised law on both sides of the Atlantic and is also admitted to the New York Bar.
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