IT suppliers: optimizing purchases, optimizing your budget

On January 23, 2019, CIO organized a conference on "IT Suppliers: Dangerous Liaisons - From Purchasing Strategy to Day-to-Day Management" at the Paris Trocadéro Business Center in partnership with Purestorage, Rimini Street, SDM Conseil, and SilverPeak.

Best practices in IT procurement are far from widespread, as the study results show. Are IT purchasing practices effective? conducted by CIO. This study was presented at the opening of the CIO conference "IT suppliers: dangerous liaisons - From purchasing strategy to day-to-day management." The conference was organized in partnership with Purestorage, Rimini Street, SDM Conseil, and SilverPeak at the Paris Trocadéro Business Center on January 23, 2019.


Philippe Chassaing, Vendor Management & Software Asset Management (SAM) at Veolia, explained how to effectively manage your application assets.

The first speaker of the morning, Philippe Chassaing, Vendor Management & Software Asset Management (SAM) at Veolia, is also co-author of the Cigref white paper "Software asset & cloud management." Veolia operates in water management, waste collection and recovery, and energy, generating €25 billion in revenue in 50 countries. Cigref, meanwhile, brings together the 150 largest French companies, mainly private but also public.
He began by reviewing best practices. "The first is to refuse to be intimidated by suppliers who have no qualms about resorting to bluffing," he argued. Of course, this requires a confident response and therefore a structured approach. And the arrival of the cloud, particularly SaaS, means that these services must be integrated into the managed scope.


"The right price for your software developments" was explained by Emmanuel Lalau, partner at SDM Conseil.

Of course, the primary benefit of having a healthy relationship with suppliers is paying the right price. Assessing software development work and determining the right price is precisely the role and expertise of SDM Conseil. Its second area of expertise concerns the value/cost ratio of recurring purchases such as TMA, for example, always in line with market practices. "30% of the projects we worked on had a significant price discrepancy and suppliers had to revise their quotes," said Emmanuel Lalau, partner at SDM Conseil. Simply defining a price is obviously not enough, and the firm also provides long-term management support.


"How a CIO can implement best practices in purchasing," said Philippe Rouaud, CIO of France Télévisions and president of the Cigref Supplier Relations Club.

Beyond price, IT purchasing must be effectively managed. Philippe Rouaud, CIO of France Télévisions (France Ô, France 2, France 3 and its regional channels, France 4, France 5, France Info, etc.), is also president of the Cigref Supplier Relations Club. He spoke in both capacities. Within Cigref, over the past two years, the various working groups dedicated to relations with specific suppliers have come together to form a Supplier Relations Club, as certain issues are cross-functional. In particular, Philippe Rouaud took offense at the fact that "international players make their offers very complex and difficult to understand," obviously in an attempt to artificially increase their turnover. SAP, Oracle, Microsoft... it is often necessary to be able to call on corporate management, hence the need to join forces and exert influence. The French management is in fact only a commercial interface with very limited or even no power.
Sometimes, there is genuine bad faith. " One security manager refused to understand a simple question, namely whether or not personal data was being uploaded in his software's crash reports, which raised GDPR compliance issues," sighed Philippe Rouaud. This kind of reaction has become rare, but there can also be frank and unpleasant responses: this is marketing and pricing policy, and it is non-negotiable.


Gabriel Ferreira, Chief Technology Officer at Pure Storage, advocated for "Breaking the purchasing cycle by reinventing how IT is consumed."

Sometimes suppliers change their approach. Pure Storage has democratized flash storage in businesses by changing its marketing methods. "We offer a different consumption model, which is ultimately similar to that of the cloud," observed Gabriel Ferreira, Chief Technology Officer at Pure Storage. Instead of buying complete servers every x years, rather than discarding old components, it is better to replace them as needed: change CPUs every two or three years, memory chips at other intervals, but keep forever and ever metal frames. To this end, the supplier retains responsibility for the equipment in order to replace the right component at the right time. Technical innovation and commercial innovation are thus combined in the Evergreen offering.


Catherine Savaete, Senior Account Executive at Rimini Street, explained "How to break free from the grip of publishers and lower your maintenance costs."

Another significant item in the IT budget, maintenance is at the heart of Rimini Street's business. With 90% of the IT budget already spent on maintaining existing systems and only 10% on new projects, Catherine Savaete, Senior Account Executive at Rimini Street, lamented: "The trend is toward less building because the costs of running continue to increase." Added to this is the end of support for on-premises, with publishers heavily promoting either migration to the cloud or upgrades that have no functional justification but come with considerable costs. Compared to official maintenance costing €1 million, plus hidden internal costs that double the price, Rimini Street is offering a comprehensive contract for €500,000.


Stéphane Rousseau, CIO of the Eiffage Group and leader of the Cigref working group on open source as an alternative to major suppliers, was the keynote speaker for the morning session.

The keynote speaker for the morning was Stéphane Rousseau, CIO of Eiffage. With 65,000 employees and €15 billion in revenue, Eiffage is a major construction and public works group (infrastructure, office and residential real estate, etc.) and related sectors such as motorway concessions and public facilities, operating in some 30 countries. He spoke regularly to offer commentary or critical analysis. Above all, he brought his dual experience as CIO of a major group and leader of the Cigref working group on open source as an alternative to large suppliers, which resulted in a white paper.
This latest work follows on from numerous previous reports and studies by Cigref over the past decade on the subject of open source. This time, the idea was to identify the obstacles and motivations for migration. Open source is a source of innovation that allows companies to escape the constraints imposed by certain service providers. One of the difficulties, however, is the certification of tools by proprietary software publishers, such as a database like PostgreSQL for storing ERP data. "Certifying an open-source database will be a competitive advantage for publishers," said Stéphane Rousseau. In the back office, open source is essential in many areas but remains difficult in the front office, whether for office automation or basic business software such as accounting.


Pierre Langlois, Country Manager at Silver Peak, defended "SD-WAN: an agile network tailored to your digital transformation."

Software, storage infrastructure... The only thing missing from this cost breakdown was the network. "We need to restore the prestige of network and telecom teams, which are too often reduced to managing contracts," argued Pierre Langlois, Country Manager at Silver Peak. High-availability offerings for businesses are much more expensive than consumer offerings, but by virtualizing networks through SD-WAN, we can aggregate a variety of technologies that are more flexible and less expensive. QoS is thus guaranteed through this combination rather than through an SLA. In countries with low telecom prices, such as France, the resulting agility can constitute the true ROI.


The round table discussion "What is the purpose of user clubs?" brought together, from left to right: Patrick Geai (USF), José Munoz (AUFO), and Didier Artus (Dynsclub).

Finally, the round table concluding the morning brought together José Munoz (Administrator of AUFO, Association of French-speaking Oracle Users), Didier Artus (President of Dynsclub, Microsoft Dynamics France Users Club) and Patrick Geai (Administrator and former President of USF, Association of French-speaking SAP Users). They explained the benefits of belonging to a user club. On the one hand, it is a way for users to exchange ideas and share best practices and tips. On the other hand, getting together allows them to exert more influence on the publisher, whether to change commercial policies or influence the product roadmap.