Vendor Partnering: A true win-win relationship Presented By: Jason Cowie CIO Calibre Global CIO Summit 2012 - Perth
About Calibre Global A leading diversified engineering and project delivery company Design and delivery of mine, rail and infrastructure projects to the resources and industrial sectors 2,100+ people $50Bn+ estimated capex projects (study, design or deliver) Designed and built some of Australia s largest iron ore mines Designed and built some of Australia s longest heavy haul rail lines Enabled Remote Operations Communications for major iron ore miner Offices in Perth, Melbourne, Brisbane, London and Mongolia. 2
To outline a Partnering With Vendors model and show it s benefits against the traditional client-supplier relationship
Models Today In the IT market today we typically see the following types of engagements: Client Supplier Tell me what you want, I will give you a price One Sided Negotiations One party gets more than the other Both models will work, but include flaws for the long term in today s IT market. 4
Models Today - Issues Client Supplier Client gets price needed but nothing else Vendor/Supplier provides market competitive pricing only (hopefully) Neither side commits to the project /solution May do business again but only if for financial gain One Sided Negotiations One party get more out of the deal / Other side feels cheated Likely to leave a bitter taste with the other side Vendor likely to make money in other ways Client likely to look for alternative solutions In both models if the project / solution hits a failure point the client will be on its own. 5
A New Approach At Calibre (and in my last few roles) we have used a different approach that works: A Vendor Partnering Model Based On A Win Win Approach Formalised By An MOU Both Sides Become One Team / Work Together Open Book Philosophy Both Sides Prepared To Give A Little Share The Risks & Share The Rewards Executive & Long Term Commitment Note: don t say you want a partnership, but want everything in your favour (this is not partnering) 6
Partnering - The Foundations 7
Partnering Building It Plan Reward Buy In Together Document in detail the IT project you want to achieve Make sure you link it to business benefits Ensure the strategy is current, fresh & new Document how you want the partnering model to work - Your Role - The Vendor Role - Joint Role - Due Diligence Blanket - Proposed Benefits Investigate the vendors you will need 8
Partnering Building It Plan Reward Buy In Together Sell the strategy to your executive (CEO / CFO) & business Sell the partnering model to your executive (CEO / CFO) Sell the strategy to your local vendor account manager If account manager not excited request a new one Sell the strategy to the vendors state manager Push the strategy up to the vendor executive (if possible) Once the vendor is excited sell the partnering model Negotiate all parties benefits and document in the partnering model 9
Partnering Building It Plan Reward Buy In Together Create an open book policy on pricing Both sides commit funding Both sides commit the resources Design the project together Aim for quick wins or a pilot system Source the items required and begin building the strategy Provide both executives regular updates on the quick wins Demonstrate the solution together to your executive Demonstrate the solution together to the vendor executive 10
Partnering Building It Plan Reward Buy In Together Create rewards for the team resources during the project (lunch, drinks, dinners) Once the project is live both sides provide the benefits agreed in the partnering model Ensure you honour your commitments agreed 11
Partnering The Benefits Benefits Your Company Receives C V Access to the vendors best and brightest staff Vendor support when the project hits an issue Vision / IT Strategy is achieved / Business benefits realised Long term partnership is created for future projects Benefits The Vendor Receives The benefits you agreed in the partnering model Long term / loyal client Revenue growth as your company and strategy grows A CIO that will partner with them again in a new company 12
Partnering - Issues You Will Face 1. Getting your Executive to agree to adopt true partnering 2. Developing a strategy that excites the vendors 3. Being able to sell it to the vendors 4. Ensuring your business provides the agreed benefits 13
Companies I ve Partnered With Below are companies I am partnering with today and I have partnered with successfully in the past: 14
Any Questions?