During the holidays, many consumers create product wish lists at Amazon.com. There may be no Amazon equivalent for CTOs, but high-level executives still whip up mental wish lists detailing what they want from software and hardware vendors.
With the makings of an economic recovery on the horizon, IT budgets are beginning to grow again after a three-year slump. As a result, IT departments — and the CTOs that head them — finally may have room to maneuver when dealing with vendors. In other words, those mental wish lists could translate into tangible purchases.
However, the lessons of the downturn are still fresh in most people’s minds, and CTOs likely will keep a tight rein on IT spending, buying only those products and services that truly meet their needs.
So, what do CTOs want from vendors in 2004?
1. Focus on Versatility
With multiple projects keeping IT staff busy, the need for versatility and flexibility is pressing. Vendors that can customize their offerings have always been popular, but this ability may be even more important as companies move forward into the new year.
This shift toward adaptability can be seen most abundantly in the technology learning industry, which has had to reconfigure its products and services to accommodate corporations’ dwindling budgets. Now that IT dollars might be returning, industry executives are seeing even more desire for versatile training options, rather than a return of demand for traditional forms of instruction.
“It is highly unlikely that a ‘butts in seats’ model for mass computer training will ever thrive again,” William Vanderbilt, director of CompTIA’s Technology Learning Group, told the E-Commerce Times. “Not only has e-learning embedded itself in the learning process, but now everyone requires a blended solution.”
Of course, training companies are only one of many types of businesses that have learned in the past year that standard services may not fly anymore with CTOs. As Vanderbilt said, “The key for survival is to move toward a variable cost model that emphasizes customer productivity, instead of simply offering off-the-shelf training solutions.”
2. Try Before You Buy
Another shift that could rear its head in 2004 is the rise of the subscription, or hosted, model. After all, although IT budgets seem to be plumping up, they are not yet at the Golden Goose level. A subscription model allows customers to avoid many of the infrastructure costs that would accompany an outright purchase of enterprise software. Therefore, it seems logical that CTOs would demand it.
“In 2004, subscriptions will increase in popularity,” Gina Poole, vice president of developer marketing and Web communities at IBM, confirmed. “They will allow businesses to predictably manage software costs and provide developers with the full spectrum of tools and middleware they need in one package.”
Unsurprisingly, companies that can offer such software will be in a good position to reap revenue rewards. In fact, this trend has already started, with hosted-service vendors becoming major players in the CRM marketplace.
3. Bring It Together
Vendors also would do well to keep in mind that, like any department head, CTOs have a real need to integrate the IT department’s various hardware and software components, as well as make sure that new implementations match the overall technology strategy.
To make CTOs happy, vendors will have to learn the art of blending products and their management interfaces into a more cohesive whole. After all, no product exists in a vacuum.
In the coming year, this need for cohesion should show up most in the security arena. Symantec vice president and CTO Rob Clyde told the E-Commerce Times that security products working in isolation will not solve the problems companies currently face.
“Going forward,” he said, “organizations will have to employ a more holistic strategy, one that clearly incorporates and addresses the core objectives of a comprehensive security environment.”
4. IT, Meet the Company
As technology strategy meets business planning, vendors also will need to show CTOs that they can serve a whole company, not just the technology department. One of the most important trends in recent years is the integration of the IT department — previously viewed as an island apart from the rest of a company — with other departments within the enterprise.
John Challenger, CEO of outplacement firm Challenger, Gray & Christmas, confirmed that IT employees are striving to integrate their department with other parts of the business. “One of the keys to IT growth will be its integration into the mainstream at companies,” he said.
To respond successfully to this development, vendors will have to be savvy about how their hardware and software impacts the entire company. Fortunately, this goal already has been identified by many vendors, and they have changed direction accordingly.
5. Cash on the Barrelhead
Still, despite recent economic and organizational upheaval, the most important item on any CTO wish list may be the same one that appears every year: value for the dollar. Technology projects are notorious for spiraling out of control.
“It’s like remodeling a house,” Ted Doyle, senior partner at business technology and management firm GMD Resources, told the E-Commerce Times. “It never costs what they say it’s going to cost. The trick is just to know how much above the quote … they’re going to go.”
Doyle noted that ballooning costs may not always be a vendor flaw. “There will always be things that pop up during a job,” he said. “It could be that the project manager didn’t know that a certain process would take so long, for example.”
Vendors that can anticipate problems and keep costs in line by sticking close to a quote can make any CTO’s year a happy and bright one. After a string of dismal years in the technology sector, that would be quite an accomplishment.
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