Zen and the art of vendor management!

In today¡¦s highly competitive environment, a company that is not equipped to meet the challenges of the day will falter. While it is vital that information systems play an essential role in establishing strategy, policy and direction from a corporate standpoint, they must also result in an effective deployment of IT components throughout the business units, fully aligned to the enterprise¡¦s business needs.

Most professionals agree that re-engineering is an exciting but painful process.

But while the implementation of IT strategies as part of re-engineering an organization towards higher productivity and greater efficiency gains is essential, it needs to be done with a careful eye on the bottomline. This implies that for an IT strategy to be effective, the end result must be a business gain or competitive advantage.

Essentially there are four key investment areas in the development of an effective IT strategy plan for an organization.

These are:

Infrastructural IT investments cover the gamut of network file servers, connectivity and related equipment; desktops, laptops, application processors, backup systems, DRP strategies, security, and so on.

Transactional IT investments relate to building financial and bread-and-butter applications around a robust RDBMS like Oracle or DB2. Access via corporate wide area networks tie in disparate components throughout the enterprise.

Informational and strategic IT investments processes follow similar lines.

Organizations realize that the quality and caliber of people hired at this stage of organizational growth are expensive, in each of the four key investment areas highlighted above. However, this also results in a lean information systems team within the enterprise with a dependency on external vendors. That brings us to the need to complement a leaner IS function, or whatever sobriquet is used for the computerwallahs responsible for the four areas highlighted earlier.

The CIO must maintain cordial relations with vendors, as the vendor of yesterday becomes the partner of tomorrow.

Relationships with vendors of hardware, software, services, maintenance, FMS takes on a fresh connotation. The vendor is no longer someone confined to the outer reaches or periphery of the organization. Today, they occupy the preferred status of a technology partners. The reason one looks at them as a partner is because they are critical to the CIO in terms of delivery and fulfillment to his or her organization.

These vendor-partners help successfully manage the enterprise. Often, the hurdles and obstacles for successful implementation are awesome, and would alarm even the staunchest of professionals.

Therefore, choosing the right partner is similar to hiring a new employee. One hires for skills and also for attitude. It is incumbent on the intelligent CIO to maintain cordial relations with all potential vendors, because the vendor of yesterday becomes the partner of tomorrow.

So what are the general rules or guidelines for successful vendor management?

There are no hard and fast rules. Today, most vendors aspire to provide value addition to their would-be customers or prospects. At times the gulf between promise and delivery translates to a graveyard for the IT staff of an organization if the partner fails to deliver.

Finally, the responsibility for success lies with the CIO. Rather than take an adversary's role, it is incumbent on the CIO to foster good relations, manage the process, and also to choose wisely based on his personal knowledge and experience.

No CIO can make an omelette without breaking eggs, and aside from technical competence, good business sense and the ability to manage the vendor/partner relationship; the two vital ingredients that distinguish success from failure are vision and courage. Napoleon was fond of a quotation by Cicero which inspired him:

¡§An army of rabbits led by a lion will always overcome an army of lions led by a rabbit.¡¨

The author is Vikram R SriHari, Former Director (business systems), CIO, Coca Cola India and presently Vice President (Enterprise) Asia Pacific, Opelin Laboratories.