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The six million dollar vendor

14.07.2011
Between 2005 and 2010, Gartner estimated IT managers and executive decision makers have gone from dealing with an average of 3.7 vendors to 10. The onset of Cloud computing as well as the revival of service outsourcing in wake of the economic downturn have only exacerbated this as companies increasingly look to multi-source their services to obtain the functionality they need at a cost they can afford.

If Gartner is right, CIOs are in for a hell of a ride.

But it is an area that Gilbert + Tobin partners, Sheila McGregor and Bernadette Jew, believe CIOs are yet to get a handle on.

"You often hear the vendor blamed but there are a lot of things the customers can do themselves," Jew says.

Both partners of the law firm hold US and Europebased telcos and financial institutions in a high light in this regard; executives are unlikely to soon forget the effects of the economic downturn.

For organisations in other verticals, however, and particularly those in Australia, the problem remains. Despite the gradual recognition of the importance of managing vendor relationships properly, McGregor warns companies are yet to understand the management involved in vendor contracts.