Ways CIOs can set more realistic expectations with vendors

The supplier relationship can’t be underestimated. It’s an integral component to business, and experience teaches us how to build lasting and trusted partnerships. But things don’t always go as planned and some expectations fall short.

The first sore point is skills. CIOs want to find in their suppliers all the knowledge they don’t have in-house, but sometimes they come up against a different reality.

“The vendor often sends the most experienced sales manager to the sales phase, while at the project phase they send a less experienced person,” says Francesco Ciocia, head of IT and digital transformation at Italian veterinary services company Ca’ Zampa. “It’s a mistake vendors must avoid since they shouldn’t boast about skills they don’t possess. CIOs notice this immediately and they should demand experienced people in every interaction.”

Barbara Brunetti, group IT director at lighting fixture company 3F-Filippi, agrees with many of her CIO colleagues that it’s difficult to get valuable services because there’s a skills shortage, even among suppliers. Another source of disappointment is a lack of proactivity since the partner should suggest innovations and use cases. For example, many CIOs today expect vendors to guide them through the many possible applications of AI, but this need isn’t always met.

What CIOs expect from vendors

What makes a supplier stand out is their ability to anticipate customer needs, says Stefano Bombara, head of technical systems at Crédit Agricole Vita. “CIOs don’t want a partner who simply settles for a supply contract,” he says. “Instead, the vendor must constantly offer new solutions for technologies, use cases, and methodological approaches. It’s in these processes that we expect proactivity, especially from suppliers who have a long-standing relationship with the company and know us well.”

Another area CIOs would like to see more from the vendor is an ability to evolve in terms of technology and the organization itself.

“If the vendor doesn’t invest in development, this becomes a problem for the CIO,” Bombara adds. “For example, companies typically have core management systems, and the vendor must constantly encourage them to update. If this isn’t the case, the company risks finding itself with a huge technology gap that’ll take a long time to fill, significantly impacting operations.” 

IT leaders also ask vendors for flexibility in service delivery since many IT projects involve people first, and CIOs expect there to be room for dialogue and making changes as the project progresses.

“Companies must be able to explain to suppliers what they want and the results they expect, but then the supplier must be available and knowledgeable beyond what’s written in the contract,” says Diego Cilea, CIO of chemical company Surfaces Group.

A more unstable supplier market

Then there’s consolidation and M&A, features of the supplier market that have become an increased source of stress for CIOs. As a result, many suppliers fold or just disappear into other companies, and the CIO loses contact with trusted partners or is no longer able to tap into the expertise they need.

“You think you have a partner that on paper has all the skills, but in reality, the larger vendors are having organizational difficulties,” says Brunetti. “They change internal business units, lose people and skills, and the CIO’s relationship with the vendor becomes complicated. There’s less stability in the supplier market than 10 years ago, and today I’d have a hard time recommending to a young CIO a partner who can guarantee a long-term relationship without disruption. The CIO must draw on all their experience and personal knowledge to navigate the vendor’s instability.”

The peculiar difficulties of SMEs

Then there’s a specific difficulty for small businesses when interacting and negotiating with suppliers.

“We began as a startup, then embarked on a growth path thanks to several investment funds and, subsequently, by joining the Ca’ Zampa Group,” says Ciocia. “We know how crucial supplier relationships are in the early stages of development. When a company is still young, it often lacks the necessary internal expertise and focuses its resources on its core business, which, in our case, concerned the acquisition and development of veterinary clinics in Italy. In that context, we relied heavily on external partners to integrate expertise and operational capabilities, even though it’s not always easy to establish favorable conditions.”

The first critical aspect is finding the right-sized supplier. Small companies typically look for a similarly sized supplier, because they’re less expensive than a large one and more flexible. So as the group grows, Ca’ Zampa is now expanding its reach, evaluating larger suppliers to support the expansion of services throughout Italy. For Ciocia, however, two elements remain key in collaborating with vendors: flexibility and trust. From this point of view, the supplier issue is also critical for Brunetti.

“We’re a typical Italian manufacturing SME that’s almost a large company, but we don’t yet have the size or budget of companies with large IT teams,” she says. “I coordinate a team of four people, and we need to provide our services to the entire group ecosystem, including the factories and some overseas branches. We need suppliers who can support us with both infrastructure and second-level systems services and support. Our challenge is finding those who are the right fit.”

Emerging strong from supplier relationships

Cilea of Surfaces recommends being meticulous with contracts, and draft them to allow for a smooth relationship with the supplier and orderly exits. “Everything needs to be in writing, especially because technology evolves rapidly, contacts change, and there’s no guarantee you’ll stay the same,” he says. “Today, it’s difficult to develop five-year strategies, and the contractual part is essential.”

CIOs unanimously agree that contracts among cloud providers must also be carefully considered. SaaS service becomes a risk that can be mitigated by such arrangements, but this isn’t easy, as cloud vendors are typically hyperscalers that impose weighty T&Cs and offer no specific contacts in case of problems.

Another consideration is to avoid vendor lock-in by making them compete, which can be achieved by limiting tech adoption so it doesn’t become pervasive and the company ends up depending on just one vendor. Bringing in many solutions creates complexity, both from an IT and skills standpoint, so it’s essential to ease risks, and the CIO must work ahead to disengage if necessary.

“I once made the mistake of centralizing services with a single provider, and I won’t do it again,” says Brunetti. “I thought it would simplify IT management, but that’s never a good idea. Today, as a general rule, I try to have at least two different providers for each area.”

Ciocia also seeks to create a sense of equality among suppliers, demonstrated in day-to-day operations and not in sales promises. “From this perspective, transparency and clarity in communication are essential to avoid creating misleading expectations,” he says. “It’s important to be in good standing.”

Even when there are multiple vendors for the same product or solution, Ciocia adds, it’s crucial for the company’s IT representative to exercise solid leadership, bringing all parties together around the table. This avoids buck-passing and fosters effective collaboration. “I put everyone together in a war room, explain the problem, and start troubleshooting until we reach a concrete solution,” Ciocia says.

The key relationship with the CEO

The importance of the CIO reporting directly to the CEO and building a relationship of trust can’t be underestimated. This also applies to suppliers. Brunetti reports directly to her CEO and emphasizes how much this helps her in selecting contracts and, moreover, justifying higher spending for more adequate service.

“When there’s a relationship of trust with the CEO, the CIO is able to explain why a supplier and a project are valid, and even introduce changes compared to previous choices,” she says.