CIO-Vendor relationship: COVID-19 helps CIOs thresh out and identify excellent and average vendors

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In one of the previous stories from the same author, many CIOs have pointed towards renegotiating vendor contracts as a principal source of bringing down their IT costs. While this holds true, it’s important to note that many vendors and partners have provided exceptional support to their clients too, inspite of all odds.

The hammer of COVID-19 has been hit hard on CIOs, which prompts for urgent action to support them to continue business operations. Certain vendors have been, firstly proactive in supporting the necessary infrastructure to their clients and secondly, also coming up with innovative solutions to operate as workarounds.

Identifying the best from the rest
Vendor’s at times have gone out of the call of their duty to support their clients, “An IT vendor supported an organization by delivering and configuring a new laptop to an employee directly in the hotel where he was quarantined. Some IT vendors have made changes in the processes on their side to accommodate customers impacted by the lockdown. Moving materials quicker than in usual times and allowing customers to pick up from the warehouse directly if needed, which is normally not allowed in normal times,” informed Dilip Dusija, Partner, Deloitte India.

Fidelity International, which manages about half a billion dollar of assets globally also faced severe challenges with respect to IT infrastructure, which is managed majorly, from India. “COVID-19 has accelerated digital transformation at Fidelity International. What might have taken years has been done in weeks. Multiple HR practices have been taken online,” says, Babu Thiagarajan, Country General Manager and Head of Technology – India, Fidelity International.

There are specific partners working with Fidelity International, who haven’t been able to perceive COVID-19 in the right manner and the challenges that ensued, “The partners who have understood the challenge of COVID-19 for us have been useful to us, whereas partners who have just seen the partnership as a contractual agreement haven’t been successful in engaging with us,” says Babu.

What separates the better from the rest is the use of emerging technology and approach, “Partners who have been able to step-up with the required skill sets, to respond to our requirements in building trust for our customers through emerging technology such as better data virtualisation, visualisation, information security and cloud tech, have gained our confidence. The partners who are still operating in an old school method of delivering digital services haven’t benefited from us,” finds Babu.

The same applies to KreditBee, an internet platform that provides easy credit. A step further, the company has been able to kickoff novel practices, unexplored earlier. “This situation has typically helped us identify the great vendors from the good ones. We have seen a lot of them proactively offering support, and the human element of the relationship has gotten highlighted as a part of the overall scenario. This has also led us to understand & explore a lot of innovative practices together to support the virtual work environment, something we didn’t focus on earlier,” says Madhusudan Ekambaram, CEO, KreditBee.

KreditBee was able to identify many interesting & disruptive practices to track, monitor and report the work of the operations workforce, which is a key innovation being planned to carry forward in the times to come.

Support extended by vendors in the wake of COVID-19
The COVID-19 crisis has thrown requirements, which are unprecedented and without the cooperation of all stakeholders, its difficult for the CIO’s office to turn it around and keep the lights on. Technology vendors are an important stakeholder and some have raised to the occasion and proved their value. “Most of the vendors have reached out to us extending the credit period. Interestingly, we found that the small & medium sized vendors were more proactive and direct in their approach, considering that the decision chain is bigger for the larger vendors, and hence it is a much elaborate process to get the decisions done. Also, many vendors have reached out offering reduced rates as a part of the Business Continuity Plan, which is a welcome measure from our trusted partners,” says Ekambaram.

CIOs, across sectors, have requested IT vendors for discounting and deferred payments on whatever may be possible from their side. The vendors have responded differently to the request. “Vendors providing low end IT services on rental basis are providing up to 50% discounts on annualized billings; or free extension of contracts by 2 months for annual contracts; a few telco providers for phone lines are giving discounts up to 25% for no usage in the month. Major Technology giants providing collaboration tools are providing add on products for existing customers,” says Dusija. 

IT/Technology vendors are providing additional discounts on new services to existing customers; and to secure new customers as well. This could be availed by organisations for getting bargain opex rates at the moment.

In an interesting anecdote shared by Dusija, “Where required, organizations have also resorted to helping out the IT vendors with early payment thereby making sure the client and IT vendor relationship is intact for a longer run,”!

Bank of Baroda, India’s third largest state owned bank, has amalgamated Dena Bank and Vijaya Bank as a part of the PSU bank consolidation process. “In the aftermath of COVID-19, the nature of the relationship with the vendor/partners, hasn’t changed, but the working methodology has changed,” says Sharad Saxena, Chief Technology Officer, Bank of Baroda. The bank has provided secured tools to the managed services provider, who run the critical daily operations for the bank. Wherever possible, the timelines have been shifted; projects have been restructured; the employees working for the managed services company, who are stuck due to various reasons can visit the nearest branch and work from there. These employees have also been given access to the nearest bank quarters. Using these various workarounds, the bank has been able to migrate over 280 branches in the lockdown period.

Uncooperative attitude
There is a section of the vendor community that is not ready to ease any conditions and support their clients, “Vendors providing essential IT services like cloud based emails, cloud computing and internet providers are mostly not providing any discounts,” Dusija informs.

Vendors are not ready to extend the credit facility to the clients. “The consultants working with the technology vendors are not travelling. They have reduced costs, which should be passed on to the clients. Certain vendors are not giving any discounts on the AMC payments nor are they ready to extend the credit period. Whereas there is also a section of vendors, who have been kind enough in extending the credit period,” says a veteran CIO, on the condition of anonymity.

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