CIOs forge vendor collectives to extract business benefits

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Getting the best from your IT suppliers takes more than sharp contract negotiations.

Top-tier CIOs are forming vendor collectives wherein rivals such as Oracle and SAP, Cisco and AT&T, Hewlett-Packard and IBM tamp down their competitive instincts to work together on business problems both fundamental and futuristic. Traditional methods of managing IT suppliers-mainly playing rival vendors off each other and negotiating ever-tighter contract terms-stymie creativity and ultimately limit the business benefits both sides get from the relationship, says Alan Matula, CIO of Royal Dutch Shell.

In a bid to uncover game-changing IT, Matula and other CIOs are getting vendors to abide by new rules for their behavior when delivering technology, collaborating on business problems and, as the collective gels, opening up research and development work.

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