Why You Cannnot Rely On Vendors For Your IT Strategy

By Dan Woods

Stefan Dietrich is a Technology Strategy Consultant who has held senior positions at several large IT organizations and has consulted to startups and mid-market companies. Stefan recently joined CITOResearch.com as a contributor. This guest post is his inaugural story.

In an era of consumerized IT and packaged software solutions, increasingly delivered as a service from the cloud, it is tempting to think that vendors can be a good source for your IT strategy, relegating the CTO role to a sideshow. Resist this temptation.

To set technology and policy strategy, companies rely on their CIO/CTOs who in turn often employ dedicated "Technology Strategists". At some companies, these are valuable roles and work extremely well. At others, they don't, and when the cost pressure mounts, the growing impression becomes: technology strategy itself, just like engineering, is something that can be purchased as (or with) a product. This is false.

The role of technology strategy is not to select products from a menu of vendor options. The role of technology strategy is to examine the core business function that a company wants to pursue, and to determine how the path of the business will align with technology developments going forward and the business opportunities the company may take. The strategist must also consider which opportunities will fail, are uncertain, or as yet unknownâ¿¿in addition to considering the aspects of the business that work well with technology today, but may or may not thrive into the future.

Because virtually every business today is an IT business, technology strategy and business strategy are tightly bound, if not synonymous. The role of the technology strategist is therefore as essential as that of the head of the business division that is using the technology.

The vendor's natural inclination is to adopt their technology to your business as it is today, because the vendor is not championing your businessâ¿¿they are championing their own business. The vendor will never tell you to simplify your security policy, in fact, they love complex security rules and winding implementation projects. They might tell you your security rules don't fit with their product. But they will never tell you they've seen the writing on the wall of your industry's future, and it would be best if you threw out an investment in policy or technology that will become outmoded â¿¿ unless of course their offering is a direct replacement for that technology. Even then, the vendor will often make more money adapting their offering to an existing infrastructure than proposing a wholesale replacement, because of the long time scales and the amount of consulting involved. It's simply not in their interest to be "disruptive," because that could mean disrupting their sale or sullying their reputation.

If you let a vendor run your technology strategy, it's the same as saying, "Everything we have works, and they'll make sure their technology works with everything we have," when that might not be the best option.

This isn't to say vendors aren't useful. Vendors are excellent at squeezing value from well-oiled commodity technologies. They're extremely efficient at this, because it's what they do all day long. This has great potential to free up your internal resources to conduct more strategic tasks at the company. And if your company has determined that's what you needâ¿¿on your ownâ¿¿then you should select that vendor.

Most vendors simply can't separate their "vision" from their product. If a vendor is allowed into your organization to recommend a technology strategy, then it's very important that the vendor does so independent of the product the vendor is selling, and that vendor is free to choose whatever product they like. The risk of being sold the "standard solution" remains however, because vendors usually know their own product best and they know the disadvantages of the competing products. Therefore, they will typically see the disadvantages of the competing solution against the benefits of their own offering, and instead of concluding, "perhaps we should recommend another strategy," they will simply wonder, "Why doesn't it work in this case as well as it would somewhere else?"

The effect is pervasive: Many internal personnel, exposed to vendor solutions for so long, may have highly risk-averse frames of reference, and will continue to recommend the same vendor solutions. "We know this solution well and it works for us".

The solution? If you truly want to get technology strategy advice from a vendor, don't ask for it from the architects and implementation teams. You must go straight to the office of the corporate CTO, because that office guides that vendor's vision. It is his frame of reference you must align with your own.

As an example of the kind of variations between strategies offered by vendors, take three well-known companies whose CTOs have articulated their vision: Citrix, VMWare and Google. All have vastly different views of the desktop. On the one hand, Citrix optimizes the user experience and virtual application delivery, a well known immediate short-term solution, and partners with Microsoft to augment their solution. VMware focuses on the virtualization they know from their data center background with a vision to bring cloud, virtual desktop and application delivery together under one product. Google is about breaking new ground and maximizing productivity with minimal computing resources at the possible disadvantage of requiring completely new tools and methods.

If you do not have a strategic brain in-house, then oftentimes, it seems that the right path forward is to choose between the varying strategies offered by the vendors you already know and trust, strategies that were crafted to serve their needs, not yours. Picking the wrong strategy can be immensely costly. Choosing the right strategy may feel uncomfortable. It also may be an illusion that only one strategy applies. Different technology strategies may make sense for different divisions of your company. The bottom line is that chances of getting the right strategy drop dramatically if you have outsourced your technology strategy to a vendor or integrator.

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Dan Woods is CTO and editor of CITO Research, a publication that helps CIOs and CTOs optimize the present and build the future. He consults for many of the companies he writes about. For more stories like this one visit www.CITOResearch.com.

Since 1917, Forbes has stood, unwavering, for one overriding principle: the unshakable belief in the power of free enterprise. Our mission has also been clear and unchanging: to provide insights and information that ensure the success of those who tap into Forbes.

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