Teamwork building News BlockAs competitive threats and new business models continue to emerge, it’s imperative for CIOs to develop a technology roadmap that is agile enough to address the enterprise’s business needs three, five, or even ten years down the road.

As part of these efforts, and as IT infrastructures and technology requirements have become more complex, it has also become mandatory for CIOs to establish and nurture partnerships with technology companies which expand beyond historical contractual boundaries. Thanks to their industry and technical knowledge along with the needed resources they bring to the table, technology partners today are widely looked upon as trusted collaborators that can offer immense value to the enterprise.

Because of the value-add that they offer to technology and services buyers, trusted technology partners have become essential to the success of enterprise companies. Failure to connect with the right technology and services providers can cause enterprise companies to miss new business opportunities as they arise. In addition, lack of access to the right technologies, services, and personnel can cause companies to fail to meet strategic deadlines and objectives on time.

The high-stakes needs among businesses helps to explain why reliance upon strategic partners has ramped up for most enterprise companies in recent years. According to a study of 121 IT leaders conducted by The CIO Executive Council and IDC, 71% of IT leaders say they spend up to half of their total budgets on external IT and service providers.

Certainly one of the benefits that savvy CIOs see in forging the right partnerships is how a technology/business partner can serve as a trusted advisor based on their experience working with companies of different sizes, with varying requirements, and across a range of vertical industries. Partners that are actively engaged with a client can help to identify process, technology, or skill gaps and can offer guidance for addressing issues quickly and effectively.

One of the more effective ways that shrewd CIOs and trusted technology partners are crafting win-win relationships is by constructing shared risk/reward deals. Under these contracts, both clients and the technology companies they partner with reap the financial benefits of additional revenues that may be accrued as the result of a partnership or from the cost savings that generate from their collaboration together. As part of these agreements, and as enterprise companies have grown to expect more value out of their technology partners and IT service providers, incentive-based contracts are now also laden with shared risk components to help increase control over IT costs and to motivate both partners to achieve performance goals and desired outcomes.

The CIO can further strengthen each partnership by demonstrating courageous leadership. This includes asking tough questions when they need to be posed and by nurturing trusting relationships where partners offer candid assessments as to what’s working and what isn’t.

As we point out in an HMG Strategy Transformational CIO blog post, CIOs and IT vendors have good economic incentives for taking the long view and resisting the urge to settle for quick victories that might look good on paper but don’t contribute meaningfully to the bottom line.  

Key Takeaways:

  • Thanks to their industry and technical knowledge along with the needed resources they bring to the table, technology partners today are widely looked upon as trusted collaborators that can offer immense value to the enterprise.
  • Trusted partners that are actively engaged with a client can help to identify process, technology, or skill gaps and can offer guidance for addressing issues quickly and effectively.
  • CIOs and IT vendors have good economic incentives for taking the long view and resisting the urge to settle for quick victories that might look good on paper but don’t contribute meaningfully to the bottom line.