Breaking Down The Walls Of Technology Vendor Mistrust

Cindy Jaudon, Regional President, Americas, IFS.

From the work-from-home shifts that occurred across multiple industries to recent surges in ransomware cyberattacks, millions of businesses — regardless of industry and company size — have undergone a period of mass disruption. Dealing with this volatile environment has put companies in a business dilemma. We found that most organizations are “looking to increase their spending on digital transformation,” but their increasing reliance on vendors has made vendor relationship management a growing, board-level concern driven by an undercurrent of heightened vendor skepticism among customers. This is an issue that tech vendors must address now.

Time For Tech Vendors To Step Up To The Plate

It’s time for technology vendors to step up, but getting it right means many things have to come together at once.

Tech vendors must expand and evolve their offerings to meet these new customer expectations. This means they must adopt new business models that instill trust at each stage of the customer journey and help deliver key moments of service to their customers time after time.

1. The customer is always right — flexibility is a tech vendor prerequisite. Consumer expectations are sky-high right now, but market conditions are challenging — think about the global skills shortage, pervading supply chain issues and rising materials costs. As a result, organizations across almost every industry are having to redesign their business models and critically support IT infrastructure to introduce flexibility and agility on a scale never seen before. Tech vendors are going to have to follow suit to best help their customers achieve this.

Gone are the days of monolithic technology offerings and solutions. Customers simply don’t have the time, resources or inclination to heavily customize software. They need to be able to select the applications they need and use them at their own pace, not get locked into huge implementations full of functionalities they don’t need right now.

Tech purchasing and implementation should now build in more choices for customers than ever before. Vendors need to provide a choice of solution, deployment model and ongoing support to meet the needs of customers now and into the future. This means offering a sales and delivery model that gives customers more choice over what they need to best support their business and deliver key moments of service to highly expectant consumers.

2. A customer’s not just a one-off sale — it should be a relationship for life. Today, many customers expect a purchased service to offer the promise of long-term performance. For technology vendors, this means shifting from the transactional process of selling products to delivering outcomes that deepen customer relationships and create lifetime customer value. A combination of servitization and digitalization is essential for this process.

According to a report by the Boston Consulting Group (BCG), digital technologies can help vendors “learn more about how customers are using their products and services” and then apply this information to create “new offerings that meet customers’ current and prospective needs.” The results speak for themselves. BCG found that “software as a service (SaaS) companies generate 25 times more value over the lifetime of a customer than in the first year they acquired it.”

Take a deeper delve, and we can see that industry figures find that enterprise software systems typically last between seven and 10 years. Rather than simply implementing and forgetting, tech vendors that offer ongoing consultancy and managed services to customers can not only increase revenue but become a vital component in their customers’ futures. Remember, tech solutions often need scaling alongside business changes, so what might now be a smaller customer or a single department of a multinational organization has the potential to grow into a key customer in 10 years’ time.

3. It’s time to be upfront and transparent on issues that count — we’re all in this together. Measurability is a key component in the customer-technology vendor dynamic. If a customer wants more inventory turns, for example, the vendor must be able to show that its application is the key driver of that outcome. When vendors can quantify the precise customer outcome, they have a better understanding of the value the customer has gained from the service, and the vendor-customer relationship will flourish.

This same logic applies to aligning to strategic business goals and aims, particularly around sustainability. According to the Environmental Defense Fund, 93% of CEOs “believe consumers are likely to hold businesses accountable for their environmental impact.” As the technology sector is responsible for around 2% to 3% of the world’s greenhouse gas emissions, it stands to reason that technology vendors must now be able to demonstrate that their sustainability efforts go beyond simply “greenwashing.”

Leading tech vendors will be those that accelerate the creation of digital innovations that can track and mitigate the effects of climate change and practice what they preach. For tech vendors, this comes in two ways. First, by assessing their own environmental and sustainability policies, they can ensure that, as an organization, they are taking action to align their C-level vision, culture and strategy with the worldwide push for sustainable business. Second, tech vendors possess a huge amount of technical IP, knowledge and skillsets to design solutions and products that can help their customers make their operations more sustainable.

Fortune Will Favor The Trusted

The current widespread business disruption provides an opportune moment for technology vendors to step up and help their customers thrive. With new business models supported by evolving digital technologies, technology vendors have all of the tools at their disposal to instill trust throughout the entire customer journey. By delivering at their moment of service, tech vendors can ultimately create stronger relationships with their customers for many years to come.

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?