Download the authoritative guide: Cloud Computing 2019: Using the Cloud for Competitive AdvantageHow much do you spend with Microsoft, Oracle, IBM, SAP or Dell? How much? What do you get for all that money?
If youre completely happy with these vendors, youre misguided. Why? Because if youve been a loyal customer and spend more than a million bucks a year with these guys, you should get much, much more than the product or service you get in the normal transaction process. What if you spend $5 million a year with a vendor? How about $10 million as many large enterprises do?
What if you have mega-contracts for data center management or desktop/laptop support? What if you spend $25 million a year or more with IBM, EDS, CSC or Accenture as some of us do? What kind of special treatment should you expect?
If you spend serious money with a vendor, heres what you should expect:
Is it reasonable to expect IBM or Oracle to heavily subsidize the demonstration pilot project? Absolutely. In fact, the primary database vendor who has a huge financial vested interest in the outcome of the pilot should not only subsidize the project but pay for it entirely.
The quid pro quo, of course, is additional work for the incumbent vendor if the project is successful. Is this reasonable? Yes, if the size of the additional project is substantial. Some ratios to consider: if the new project is worth $100,000, then a fully subsidized $10,000 project is reasonable; for a million-dollar project, a $100,000 pilot seems right. And yes, for a $100 million project, $10 million is appropriate. 10:1 is about right if not a little light.
This capabilities gap provides leverage to buyers if they understand how to communicate their requirements to their primary vendors. For example, SAP needs to make its supply chain management (SCM) module as good as if not better than Manugistics application if it wants to keep clients from straying.
This means that your supply chain planning and management requirements are especially important or should be if communicated effectively to your ERP vendor which will listen carefully if they are doing their job. Fix it or else should be what your vendor hears when you suggest what requirements need to be addressed in the next version of their application. Large clients should have a seat at the requirements table as major vendors improve, redesign and re-engineer their applications.
Instead, a true partnership here involves your vendors sharing information about significant R&D investments theyre making and plan to make and the opportunity to overlay your anticipated requirements on to those R&D plans. One way to accomplish this objective is to encourage internships with your vendors where your key business technologists get to spend weeks if not months with your vendors R&D teams. If your vendors dont invite you in, invite yourself.
All of these ideas constituent advanced vendor management best practices. Remember, we buy all this stuff over a trillion dollars a year in hardware, software and services in the U.S. alone. Dont we deserve special treatment?