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Forget bargain-basement systems, say IT managers who deal with scores, if not hundreds, of technology suppliers and consultants. Rather than argue over prices, they prefer the vendor who makes 4 a.m. housecalls and, by the way, partnerships count,
computer systems are straightforward, right? Software, hardware. But what about choosing mainframe or desktop? LAN or WAN? NT or Unix? Clearly, managing technology is only getting harder. And vendor relationships are becoming at least as much a part of the equation as cables and wires.
A wealth of technology choices means that IT departments, from the smallest to the largest financial institutions, are being faced with a slew of decisions about exactly the right technology mix for the overall company. Then there are decisions to make about the optimal number of vendor relationships: Should a firm consolidate, strike a deal with existing vendors, open the process to competitive bids, or hire outside experts in certain areas, say telecom and market data, in lieu of training existing staff?
And who is going to spend their time managing these relationships? Some firms set up a central authority
to supervise technology vendors, while others delegate the job to the business units based on their expertise. But if the second path is taken, how does the technical staff retain the power to make the final decision?
Chief technology officers are called on not only to oversee infrastructure design, cost and enterprise-wide system performance, they are often the mediators between the vendors that provide hardware, software and an array of professional technical services. They also must weigh intangible variables, such as trust against price and service levels.
On average, a large financial institution deals with anywhere from 60 to 600 vendors. Whether a firm is a large U.S.based global custodian, a big global investment bank, a mammoth mutual fund company or a mid-sized asset manager, today's giants in financial services wrestle not only with picking the fight technologies, but they must also manage a growing legion of technology suppliers. And often, the ability to manage vendor relationships determines the success of the former.
"Across our hardware, software and applications platforms we utilize well over 100 vendors," says Bob Sauvageau, CIO at American Century, the Kansas City-based mutual fund giant. Vendors used...