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Conclusion: The blending of different corporate cultures can be a huge risk factor that can significantly impact the success or failure of an acquisition. Maintaining multiple corporate cultures is extremely difficult to do, and the chances of failure are high. Cultures usually have upsides and downsides. When trying to keep cultures separate, employees tend to only see the “upsides” of what their peers have, and downside issues undermine employee morale due to feelings that they are not being treated fairly or equally.

It is IBRS’s view that ultimately efforts to have two conflicting corporate cultures coexist after an acquisition are likely to fail over time. The most dominant culture will ultimately be the culture of the organisation and employees who did not sign up for that culture will look for exit opportunities.

Conclusion: Organisations develop unique cultures. It may be a deliberate and conscious effort of the executive team to define and put in place a culture which will influence the way the organisation works, its priorities and its attitudes. Or it may just be something that has evolved over time as an organisation has grown, added more employees, expanded its business, or entered new markets or geographies.

Acquisitions often occur based on external opportunities, such as growing market share, improving product offerings or gaining a competitive advantage. But it can be the internal issues of how similar or dissimilar the two corporate cultures are that can really impact the potential success of the acquisition.

If the corporate cultures are very different, care needs to be taken to understand this, and develop specific action and change management plans to support the merging of the cultures. This is significant as the impact of a culture change may hurt the acquired organisation which could reduce the capability of the acquired organisation, and perhaps the morale of the employees, resulting in high employee turnover.

Conclusion: Given the frequency of acquisitions within the information technology (IT) sector, it is prudent that clients of the organisations involved spend time to consider the possible outcomes or consequences of the acquisition, and in particular if the outcomes are likely to be good or bad news for them.

Acquisitions are likely to always involve changes in staff. The staff most at risk of being made redundant are usually in non-client-touching administration roles, such as finance, supply or HR. What clients do need to think about are possible changes to key technical or product development teams, as well as key staff that they deal with on a regular basis.

The other area where impacts may be felt is in the future direction of ongoing product development, with outcomes that can again be positive or negative for clients.

Related Articles:

"Acquisitions Part 1: Determining the goals" IBRS, 2018-12-03 09:49:50

"Mergers, Acquisitions and Divestitures: What does it mean to your business?" IBRS, 2017-01-01 10:35:33

"Running IT-as-a-Service Part 28: IT-as-a-Service Procurement Maturity Model" IBRS, 2017-03-04 16:52:54

"Running IT-as-a-Service Part 46: Mergers and acquisitions impact on service contracts" IBRS, 2018-09-04 13:46:42

Conclusion: Acquisitions are a frequent occurrence amongst information and communication technology (ICT) vendors and solution providers. The outcomes of an acquisition or merger will impact clients as well as the employees of the organisations.

Clients and employees should invest in thinking about the announced acquisitions, what the stated goals are for the acquisition, and what exactly might be the reasons and likely outcomes of the acquisition. Whilst clients and employees are unlikely to be able to influence an acquisition being completed, it may be in their interest to take steps to help secure their own position, to either capitalise on the opportunities or reduce the risk of any possible negative outcomes.

Related Articles:

"Running IT-as-a-Service Part 28: IT-as-a-Service Procurement Maturity Model" IBRS, 2017-03-04 16:52:54

"Running IT-as-a-Service Part 46: Mergers and acquisitions impact on service contracts" IBRS, 2018-09-04 13:46:42

Conclusion: When scanning the market to find new solutions or vendors, it is usual to consider who else uses the solutions, the size of the organisation and their customer base. Vendors often publish examples of clients that use their solutions, and particularly like highlighting those clients that represent well-known global or local brands.

Whilst being nice to know, the details provided are usually very shallow, and should never be relied on in terms of influencing a buying decision. It will take a significant effort to get any details that may actually help a project team, and in many cases, the detail will simply not be available.

Related Articles:

"Don’t let poor research cloud your thinking" IBRS, 2015-12-02 19:54:39

"Embedding research and advisory into an organisation" IBRS, 2016-07-02 04:20:00

Conclusion: When multiple application software vendors claim they have the solution to an organisation’s requirements, challenge them to prove it by demonstrating their product’s differentiators and ability to process use cases.

To make the right buying decision, clients must insist the demonstration stretch the software’s functionality and the vendor’s grasp of its nuances. If this is not done, the likelihood of a wrong buying decision looms.

Vendors that do not know their software’s capabilities intimately, or are ill prepared to demonstrate them, should be rated accordingly and, unless there are mitigating circumstances, omitted from the final round in the procurement process. Vendors that are comfortable in demonstrating the software’s functionality and its ability to meet an organisation’s requirements should be seriously considered for inclusion in the final round of the procurement exercise.

Conclusion: All organisations have technology partners. Some will have long standing partners and some technology partners will play the role of innovation lead or be responsible for introducing new technologies to their customers. However, relying on these traditional technology partners may prevent organisations from achieving digital transformation goals and may even be detrimental to innovation objectives. Organisations that are successful in the digital era will use innovation as a strategic, systemic and technological lever for establishing and supporting agile innovation cultures, new accountable business management practices and processes, and establish or participate in global industry eco-systems. This means being a capable and proactive organisation and knowing how to utilise technology partners without being led by them.

Conclusion: Vendors use sales incentives, such as bonuses or rewards, as levers to focus the behaviour or outcomes of their sellers or channel partners. Many vendors work on quarterly results for their sellers, and set sales incentives for these periods. Vendors view sales bonuses and incentives as levers that they can put in place to try to drive a specific focus, or specific sales results.

Being aware of the existence of these incentives can help an organisation understand that incentives may be driving the negotiations approach that a vendor may be prepared to take, and on what solutions are being offered.

Conclusion: Organisations that by law must issue open tenders for systems solutions know they will be inundated with multiple responses and spend scarce work days assessing them. Staff involved in the process also know that many solutions proposed are not practical and, even if they are, often doubt the vendor has the capacity and capability locally to implement them.

The alternative, if not required to issue an open tender, is to conduct a market scan and qualify vendors with a viable solution and the ability to implement it. Having qualified them, they can send them a tender knowing they can probably meet its requirements. If this approach is adopted, there is the risk a potential vendor might have been overlooked.

As outlined in “Human Capital Management Solutions: Why your ICT Group needs to get involved with HR right now” (IBRS, 2017) vendors are increasingly offering capabilities right along the spectrum of human capital management (HCM), starting with recruitment, through learning and performance management, to succession planning. This infographic provides a snapshot of vendors key strengths within the HCM. This Infographic is a useful starting point for conversations with HR professionals as to the HCM areas that may be worth considering in the short, mid and longer term, and links this discussion to product selection.

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