Supplier satisfaction: Confusion surrounds innovation in IT services

A new survey from Pierre Audoin Consultants, polling IT services buyers, finds innovation the key factor in their choice of supplier.
By Manufacturing Business Technology Staff September 23, 2008

CIOs and IT managers are more often looking for IT services suppliers to deliver innovation, but many are unsure as to how they can encourage and measure innovative behaviour.
London-based Pierre Audoin Consultants (PAC) undertook a survey of senior IT decision makers at UK businesses and public sector agencies on the question of innovation. Of the respondents, 80 percent declared themselves to be satisfied by the level of innovation provided by their IT services partner, which is a very positive result for the supplier community.
However, there were conflicting views as to what “innovation” in IT services actually constitutes. For the majority, it simply means implementing new technology to drive business change, while others see it as delivering value beyond the terms set out in ink on the contract.
In a highly competitive environment, suppliers are looking for ways in which they can differentiate themselves from the opposition, and being seen as the most innovative vendor can be a big plus. Two-thirds of respondents to PAC’s survey said innovation was a key factor in their selection of current IT services partners, and most customers believe that the more expensive their supplier is, the more innovative they should be.
According to Nick Mayes, senior consultant, PAC UK, “What was particularly interesting was that just 4 percent of survey respondents offered financial incentives for their supplier to deliver innovation, and less than half said they actively measure the level of innovation their supplier provides. Unless the supplier is given sufficient encouragement to be innovative, and the two sides are able to quantify the value of the work that is delivered, innovation will remain a tricky area to pin down within a commercial relationship.”