IFS Survey Pegs Cultural Alignment As Key to Vendor Fit

While innovation is important, companies are looking for digital transformation partners with a high degree of specialization, like-minded ethics, and the ability to establish clear objectives.

While innovation is important, companies are looking for digital transformation partners with a high degree of specialization, like-minded ethics, and the ability to establish clear objectives.

What do companies look for when shopping for key technology provider that’s going to play a central role in their digital transformation? As it turns out, gaining access to innovative products and technologies is important, but not the most important thing.

Burned by failed enterprise initiatives in the past, a growing number of companies are seeking partners based on those that are aligned with them culturally and ethically, according to a new survey by enterprise software provider IFS. As companies embark on new initiatives leveraging technologies like the Internet of Things (IoT) and artificial intelligence (AI), the IFS Digital Transformation Investment 2020 and Beyond survey found nearly a third (29%) of respondents were looking to collaborate with software vendors with like-minded ethics. Twenty-three percent were keen on finding a provider that was a cultural match, with specialized industry expertise (32%) and long-term solutions (30%) the most sought-after traits when evaluating potential vendors, the IFS survey found.

Despite all the business uncertainties due to COVID-19, companies are increasing their spending on digital transformation initiatives, an earlier IFS survey found, citing 70% of respondents, which had plans to up their budgets. As businesses increase technology investment to drive revenue during and after the pandemic, the cost of failure becomes a real issue, making it more important than ever to get vendor choices right, IFS officials said.

“The fact that a non-tangible such as ethics is ranked among the top three vendor traits is inextricably linked to the fact that poor advice from vendors was rated as the top reason for failure,” noted IFS Chief Customer Officer Michael Ouissi, in a press release. Based on their experiences with previous digital transformation projects, responding companies said budgets and timelines were two of the major pain points responsible for past failures. Many of the issues encountered can be directly traced to poor advice from vendors—a fact cited by 37% of respondents to the IFS Digital Transformation Investment 2020 and Beyond survey.

Many larger companies are being pressured by senior management to select well-known vendors, given the perception they are more stable choices. However, respondents found that many of those choices led to a poor technical fit, which in turn, derailed timelines and blew up budgets. In contrast, those survey respondents that focused on vendors relationships built around the ability to establish clear objectives (50%) were far more successful with their efforts compared to those that based selection criteria specifically on the right technological fit (44%).

In the end, the survey showed that a shared trust, shored up by cultural, ethical, and strategic objective alignment, were drivers for project success. The top three trust factors respondents sought were on-time delivery (44%), support before, during, and after project completion (41%), and delivering projects faster to achieve time to value (35%).

“A vendor with deep expertise in your business and industry not only understands what you need now, but can see where the industry is headed and what you will need six, 10, 12, or 36 months into the future,” noted Steve Treagust, IFS vice president, industries program management. “Partnering closely with a vendor with strong ethics means you have a confidant who can add value and who will not push something if it doesn’t add value.”

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Beth Stackpole's avatar
Beth Stackpole

Beth Stackpole is a contributing editor to Digital Engineering. Send e-mail about this article to [email protected].

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