Fellow INN contributor Ellen Carney, a senior analyst with Forrester, posted an interesting opinion piece here on the dynamics between enterprise software buyers and vendors. She points out, vendor representatives often don’t take the “opportunity to build a deep and trusted relationship with an insurer,” which includes playing a partnership role.
Ellen’s Forrester colleague, Ray Wang, recently stirred up quite a fuss with his blog post entitled “Stop Pushing Products That Clients Don’t Need!” Wang says that lately, vendors have been far too aggressive in pushing products to make their numbers, versus acting more as solution partners. Vendors need to focus more on “solution selling and not meeting total account values… Strong relationships are crucial for success, particularly in a difficult economy.”
Relationship building is a good thing, but as is the case with any kind of relationship, vendor-enterprise relationships are a two-way street. A little while back, I spoke with some leading experts about getting along with vendors, especially in turbulent environments—not only in distressed economies, but good times as well, where vendors often are merged or swallowed up by other software companies.
For all situations, IT executives need to master the art of negotiation. The most effective way to survive and thrive through software vendor turbulence is being prepared beforehand, and asking the right questions. This requires an informed grasp of existing contracts with current vendors, and doing homework on the financial situations and technology roadmaps of potential or renewing vendors. In addition, close communications is the best tool.
Ultimately, the best leverage companies can have is to be as independent as possible from proprietary solutions. A trend that has gained considerable momentum in recent years is the adoption of open standards in software products. With the increasing prevalence of standards such as XML Web services, companies can more easily move parts of their operations onto other applications and platforms.
I spoke with The Hartford’s Ben Moreland, who talked about the leverage open standards-based systems provides enterprises. Business functions are no longer tied to a vendor's proprietary applications and interfaces, he says. "With standards, we can recover from mistakes much easier than in the past. Twenty years ago, making a bad enterprise decision was like playing with a grenade. If you made the wrong move, you blew up your career. Ten years ago, with the advent of standards, it was like playing with a shotgun. You might blow your foot off, but could take time off and recover, and resurrect your career. Today, it's more like playing with a pistol. I could shoot myself in the foot, but it's not going to stop me from continuing to move forward. Standards are maturing to the point where it's more like dropping a notebook on my foot. I might wince, but it's not going to be disastrous."
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology. He can be reached atjoe@mckendrickresearch.com.
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