Vendor Relations | Feature
Breaking the Ice
6 ideas to help vendors and IT leaders forge a more productive relationship.
Regina Kunkle calls it "getting the Heisman." But it's no award. The sales VP for NetApp is talking about the chilly on-campus reception she and other vendors sometimes get that reminds her of the stiff-arm pose of football's Heisman Trophy. While Kunkle believes in building long-term relationships to make universities more competitive, she says some CIOs simply aren't interested. "They say, 'That's not my area,' or, 'You can't do anything for me,'" she explains.
On the flip side of the coin, many administrators feel such coolness is warranted. Indeed, anyone who has attended a higher education IT conference can detect a palpable hostility among some college officials toward vendors. At the 2011 Educause conference in Philadelphia, for example, there was a lot of negative talk about vendors engaging in "open-washing." Derived from the term "greenwashing," which is applied to spurious claims for sustainability, open-washing refers to dubious vendor claims about openness.
So what has brought vendors and schools to this icy pass? For one thing, IT leaders have decried for years confusing or inflexible licensing arrangements and nondisclosure agreements regarding pricing. Joshua Kim, director of learning and technology in the Master of Health Care Delivery Science program at Dartmouth College (NH), explains that vendors often offer a private pricing sheet and special deals because the marginal value of software is so low--but universities can't share that information. "We are starting to see that we would all be better off if we started demanding public pricing," he says. "These individual deals have gotten in the way more than they've helped."
Distrust can also develop if vendors fail to abide by their contract terms, or if customers sense that companies aren't keeping pace with technological changes, says Patricia Summers, vice president of marketing for CollegeNet's online admissions and course-evaluation services. "It is very easy for a vendor to get stagnant," she adds. "You have to stay active in the industry to maintain credibility."
Of course, marketing hype and ROI claims also make CIOs skeptical, but is some of the blame for the distrust properly placed on the other side of the relationship? Klara Jelinkova, CIO of the University of Chicago (IL), thinks that, while universities collaborate well with each other, they don't work so well with vendors.
"When universities collaborate with each other, it is from a position of shared trust, but traditionally the information technology vendor is a different relationship," she explains, probably because money changes hands. "We spend so much time thinking about the contract terms and what might go wrong, when in actuality you very rarely take anyone to court," she continues. "It is up to us in IT and the providers to get to that point of shared trust."
So how can higher education IT leaders and the vendor community spend less time haggling over price and contract terms and find more meaningful ways to leverage each other's strengths? Here are six ideas to get those relationships back on track.
1. Competition Is Good
While it may seem counterintuitive, Jorge Mata, CIO of the Los Angeles Community College District (CA), has learned that vendor relationships actually improve when he injects more competition into the equation.
"We have worked to design RFPs to keep the competition alive longer," he says, explaining that it's a mistake for institutions to spend hundreds of hours preparing for a bid from just one vendor. "When a software vendor knows you've done that, it has all the leverage on its side," he notes. "You have essentially closed the competition."
In district RFPs, Mata makes it clear to vendors and his own board that the district can--and will--move on to vendor No. 2 and vendor No. 3 if the first negotiation doesn't pan out. "It tends to lead to better deals," he explains. Otherwise, the vendor might start to take the institution for granted, and the relationship will suffer.
It's a point emphasized by tech veteran Peter Kretzman on his "CTO/CIO Perspectives" blog. "Power in negotiation comes from not being wedded to a particular solution," he writes. "Once you've successfully established that viable short list, the power is all in your hands. Any facet of the deal should be open to scrutiny and discussion: cost, terms, rights to upgrade, service-level agreements, warranty, etc."
Not every vendor is happy with these competitions, Mata admits, but that is not his main concern. "My job is to put the organization in the best position possible. I don't want to offend anyone or have vendors think this is a negative place to do business, but if I am tough on them it is because it is going to happen anyway. We get a lot of media scrutiny about spending in the public sector here in Los Angeles. We have to protect the integrity of the process."
2. See the Bigger Picture
Too often, both vendors and IT departments suffer from tunnel vision, a condition that can lead to breakdowns in communication, unnecessary work, and, ultimately, antagonism. On the IT side, such narrow thinking is often reflected in demands for special product features unique to that institution; on the vendor side, an unhealthy fixation on sales quotas can impinge on more productive, long-term relationships.
Tim Flood, an independent technology consultant and former IT executive at Stanford University (CA), believes that IT leaders can benefit from taking a broader perspective. "If the university can think about representing higher education overall and voice a more general need, rather than thinking in terms of one-off modifications, it can be good for both sides," he says. For their part, vendors should see an opportunity to create value for an institution and then extend that value to other colleges and universities.
As an example, Flood cites the relationship between Stanford and CollegeNet, a provider of on-demand web-based technology for higher ed. At a user conference five years ago, a Stanford IT executive suggested developing online student evaluations of courses and faculty. "That was a totally new idea to us at the time," recalls CollegeNet's Summers.
The company worked with Stanford for 18 months on a prototype called What Do You Think? "We always had to work out whether an aspect was specific to Stanford or more general for higher education," Summers says, but the process was valuable for both sides. "Stanford got to have input and start using it right away. We now have 15 customers for it and others in the pipeline." Since then, the two organizations have worked together on another project: a module to automate the evaluation process for graduate school applications.
Flood argues that universities and vendors need to get into each other's skins. "If the university is successful, the vendor will be, too," he says. "Universities have to think beyond the university walls to the higher ed vertical as a whole."
3. Appoint a Relationship Manager
To improve their relationships with vendors, some IT organizations are redrawing their organizational chart. Stanford, for example, recently advertised for a manager of vendor management for IT services. The role includes assessing potential vendors, negotiating contracts, and managing ongoing vendor relationships.
"We will see a lot more of that in the future," says Gordon Wishon, CIO at Arizona State University. "Developing strategic relationships with vendors requires a different set of skills in terms of contract negotiations and contract management."
Flood is a big advocate for a "system facilitator" within IT to handle vendor relations, particularly as software as a service (SaaS) models become more prevalent. An effective facilitator, in his view, would be able to convince vendors to make needed changes, and would have a keen understanding of the marketplace. It would be the facilitator's job, for example, to invite vendors to come to campus to demo their products, and to share what solutions other institutions have put in place.
"Once you stop thinking that your job is about doing and realize that your job is to facilitate, it changes how you see your role," explains Flood. "When you facilitate what others do, you are mainly talking about coordinating vendors. It is a different skill set."
4. Move Beyond the Deal
If IT leaders can get past the fact that vendors are for-profit businesses, they will also realize that many companies share their own goals for higher education--and are often willing to help. "There are a dozen really large vendors working in the higher ed space, and they have lots of resources," says NetApp's Kunkle, whose company is worth $6 billion. "It is something universities should be leveraging. There are six or seven things we can do to help CIOs raise their profile." At the very least, she adds, vendors can establish strong internship and recruitment programs on campus.
As an example of vendor involvement, Kunkle cites the NetApp Academic Alliances Program, which provides colleges and universities with a portfolio of free teaching tools and resources to help them integrate storage systems and concepts into the classroom. Kunkle also has praise for California State University, Chico, which partnered with SAP America to create a University Alliance Program that provides faculty members throughout the world with access to SAP tools. (NetApp donates storage infrastructure to the project.) Chico State's College of Business now serves as a center of excellence and hosting site for more than 100 institutions in the program, and students handle the technical support.
"I see two types of CIOs," says Kunkle. "Savvy ones, such as Kamran Khan at Rice University (TX), talk to vendors a lot and think about making long-term investments involving the whole campus. The other type says, 'It doesn't matter to me what you might offer other areas of the university besides IT.' That is a real crime."
Chicago's Jelinkova agrees that, in some situations, it makes sense to extend the vendor relationship to the whole campus. "We have only a handful of companies that I would call partners," she cautions, explaining that it takes time to form the personal relationships and get a better understanding of where collaboration is worthwhile. "An important point is that this is not just about IT," she adds. "These relationships involve the whole university ecosystem."
Arizona State's strategic plan for IT actually includes a section devoted to developing more strategic partnerships. The university has a long history of engaging vendors to provision IT services, Wishon says, not just to attain economies of scale and take advantage of vendor expertise, but also to involve ASU's best IT people in projects of real value to the institution.
"We were among the first to fully outsource e-mail to Google five years ago," he explains. "We entered into that for more reasons than to offload the provisioning of a commodity. We worked with Google on new services and new models. We had their employees on site working with our employees on what eventually became a large part of Google Apps for Education."
Wishon is the first to admit that there have been swings and misses, typical of any entrepreneurial effort. Occasionally, the level of service doesn't meet expectations or partners are not invested at the strategic level. "Sometimes we have to fall back to a customer-supplier relationship," Wishon notes. "The lesson we learned is that we have to have an exit strategy."
5. Find Strength in Numbers
For a small institution, such as Maryland Institute College of Art in Baltimore, it's difficult to exert any influence over a software giant like Oracle. But the school has found that it can have a powerful voice when it bands together with other institutions. Ted Simpson, MICA's director of administrative systems, participates in the independent Higher Education Users Group (HEUG), whose more than 900 members work together to tackle everything from licensing policy to interoperability issues.
Started as a user group for PeopleSoft, HEUG expanded its scope to encompass other applications in the wake of Oracle's purchase of PeopleSoft. Although users expressed concerns about the merger, Oracle embraced HEUG, according to Simpson.
One area where HEUG has managed to have an impact is in training. Soon after the PeopleSoft acquisition, HEUG members felt that the Oracle training regime was wanting. "There were two students for each computer, obviously to save money, which is not ideal," recalls Simpson. HEUG members put together a white paper with a list of suggested improvements. Oracle responded by hiring a dedicated relationship manager, and 18 months later almost every recommendation had been implemented, according to Simpson. Today, Oracle markets its relationship with HEUG as a success story.
Simpson and Steve Hahn, HEUG's executive vice president for external relations, recently attended a conference of Oracle user groups that included a series of committees dealing with issues such as contracts, code-sharing among customers, and nondisclosure agreements. One question that came up: Is code developed under Oracle licenses the work product of Oracle or of universities?
"We would like to get clarity on issues like that," says Hahn, who doubles as assistant dean for admissions and academic services at the University of Wisconsin-Madison. "In general, there is a desire on the part of users for greater flexibility, so they could make changes around licensing without renegotiating the entire package."
For Oracle, the benefits of HEUG extend beyond relationship-building. HEUG sometimes brings problems and opportunities to Oracle that require the involvement of many different parts of the company. "Any organization that size is going to have challenges with internal communication," notes Simpson. "Often, we are the ones introducing people in different parts of the company to each other. We end up being the connective tissue, and we don't mind playing that role."
6. Crowdsource Vendor Meetings
While HEUG brings together institutions to work with a single vendor, a fledgling initiative is looking at ways to bring multiple vendors together with schools to exchange ideas and discuss issues. The goal is to change the dynamics of vendor meetings to make them more client-directed and more collaborative. It all started last year when Ed Garay, assistant director for academic computing and director of the instructional technology lab at the University of Illinois at Chicago, led an experimental virtual meeting around enhancement requests for Blackboard Mobile Learn. Open to all comers, the meeting was designed around client requests and requirements.
That first meeting was followed by another on lecture-capture software. "At the lecture-capture event, we had participating vendors that I had never even heard of," recalls Garay. "Many were eager to hear clients talk about integration with learning management systems. Many of the issues with lecture capture are the same, no matter which system you are using."
According to Garay, the meetings have been very positive; even when someone said something negative about a vendor, the vendor did not get defensive. "These are great as kickoff meetings," notes Garay, "but what we really need now is to take this asynchronous." Convening 100 people for an online meeting has turned out to be something of a challenge. Asynchronous conversations are happening now on an ad-hoc basis, but Garay would like to establish something more formalized.
Dartmouth's Kim sees crowdsourced virtual meetings as a step in the right direction for vendors and customers to share information in an open forum. "Companies are sometimes reluctant to share their road maps because they perceive it as a competitive advantage," he says. "But I think they would gain from being more open about long-term plans."
Both Garay and Kim say there is real value to companies in sitting at the table with partners and potential partners. At the very least, company officials can explain why they are not doing something that customers want. "They may feel painted into a financial corner," Kim says about vendors. "I think they should share that. We need them to make money and be successful, and I think they should talk about the bottom line with us."