Businesses Ask Channel Partners For Greater Transparency

Channel News

Analyst research points to a relationship breakdown between customer and supplier

CIOs think they are being held back by their channel partners’ choice in vendor and would like greater transparency about whom they deal with, according to research carried out by Ovum.

The study of CIOs and their procurement counterparts from 200 large public and private organisations in the UK found that systems integrators and resellers may have a trust-rebuilding exercise in front of them.

Choosing partners

The Integrate Britain Survey survey found that 49 percent of information officers surveyed wanted to be involved actively in selecting vendors for their projects, while nearly a third felt it was critical they knew all suppliers involved. This showed that CIOs are getting more involved in ICT management, rather than relying on reseller recommendations.

The research also shows that CIOs often have firm ideas about which suppliers they want when it comes to priority areas such as cost management (54%), and security or risk applications (52%); all of which suggests that the era of preferred supplier arrangements could be on its way out.

The study, commissioned by TalkTalk Business, found flexibility to be important too. Nearly six in ten (58%) of CIOs believe they are constrained by their channel partners’ vendor choices with 67 percent seeing an immediate need for more flexibility in existing product portfolios.

One bright spot for the channel is that the CIOs reported they were realistic about the time it would take to deliver truly new vendor options and longer term portfolio evolution, with these on the agenda for the next 18 months rather than immediately.

“As customers increasingly demand choice and flexibility, differentiation and competitiveness in the channel will be defined by the ability to provide the right mix of vendors to deliver the right solution to meet business challenges,” said Charles Bligh, managing director of Talk Talk Business. “For many SIs and VARs, this is the time to look at whether their current portfolio can deliver the flexibility and customisation that CIOs crave and, if not, identify who the right partners will be, both large and small, to fill those gaps.”

The survey found that 68 percent of CIOs were currently content with traditional pay-by-user models but 62 percent expect to see options for moving to cloud-based “pay as you go” models in the future, which would provision ICT on a utility consumption basis.

CIOs are also rethinking how they define value in purchasing systems. Project cost management remained the greatest priority while upfront price had less of a part to play. Total cost of ownership over time (41%) and getting the best business outcome (36%) were considered the best indicators of success. Reliability of service and SLAs, which are often key factors in the channel’s offering, proved significantly lower at only three percent.

“Shifts in expectations of commercial arrangements signal that there are opportunities for VARs and SIs to radically broaden their range of revenue options and capture market share,” said Bligh. “Once again, the key is in providing the breadth of choice customers are looking for in order to deliver value, as they now define it, and secure the relationship.”

“CIOs are looking for channel partners in the literal sense of the term – SIs and VARs who understand the business challenges they’re facing, the terms by which they define success and the need to keep cost management top of mind at all time. SIs and VARs who acknowledge, and embrace, the need for evolution have a very real opportunity to build a strong foundation for future demands,” he added.

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