Midmarket CIOs: Why We've Fired A Vendor

Joseph Tait, director of IT at NMS Labs, a Willow Grove, Pa.-based clinical toxicology and forensic testing company, said finding the right solution is often more art than science, and it's important to cut ties if a product is no longer helping you run your business.

But finding the right help is also a challenge, he said. Manufacturers have a subjective opinion on their own products and services and aligning with a VAR that can differentiate solutions is imperative. "I'm going to spend $250,000 on storage. IBM tells you they're the best. NetApp tells you they're the best. You need to manage that [finding a VAR] process tightly. The business needs should drive what you're looking for," Tait said.

Large enterprises, especially ones with long histories, have built a strong discipline around purchasing that extends to IT equipment, but midsize companies, and newer companies, often don't have that luxury, Tait said. For example, a previous employer was using dozens of vendors and spent $8 million annually on consulting services when Tait arrived. "It was a circus; there was no structure, he said.

Over time Tait was able to instill some discipline practices that helped save the company money. Now at NMS Labs, he faces the same challenge—figuring out a way to keep IT expenditures under control while making sure the needs of his technology users are met by the right vendors. It's a battle midsize companies face every day, he said.

CIOs need to have a complete understanding of their IT providers' capabilities for now and the future, and for products and services, Tait said. For example, Tait's previous employer started a toll-free number that customers could call to find a nearby dealer. The contract for that system went to a small company that promised to route calls to 1,800 stores around the country.

"When we first started, it was not a big deal, but then we had a national ad campaign and we realized this thing better do what it was supposed to do," Tait said.

Upon inspection, he found the call router was "literally in a guy's garage with a bank of racks. It was not AT&T," Tait said. In one fell swoop, the company had outgrown its IT infrastructure and needed a replacement, he said.

Tait agreed with Graham that it's difficult to find the right solution because too many vendors don't give midsize companies the attention they need.

"They take your business for granted," he said. "If you're not big enough on their radar, they don't care. That's a challenge for midsize companies. If I call IBM, I don't have a dedicated rep anymore. Midsize companies are often subject to the limitations of the person trying to help you."

Ultimately, CIOs need to make a decision that they are comfortable with, said Carfax's Lee. For example, when Carfax was upgrading its Web application strategy, it eliminated IBM's WebSphere, even though Lee acknowledges it's a great product.

He selected BEA instead, which has worked out well. "It's been a learning experience."