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Go Your Own Way

Go Your Own Way

There is a polarization among Australia's CIOs between the wills and the will nots when it comes to accepting or seeking vendor hospitality. They are happy to press the flesh at the opera or in a box at the Bledisloe, and while they understand there is no such thing as a free lunch, they feel that their principles are not being compromised

Computer vendors still squire CIOs to the opera, to island conferences or fact- finding missions overseas. And, yes, the wife can come too if you'll give up the business seat for two in economy. But what are the risks of such rewards?

"I avoid them like the plague," says one CIO when asked about his reaction to offers of vendor-sponsored trips to visit international users. "I just can't see the value in them.

"We are here sitting in Australia, remote from the US and what they have there in terms of vendor support. It's chalk and cheese. Perhaps it's good to see the R&D, but if you can't get the information locally and a clear view of the road map then that's a concern to me. The big tour to me doesn't have much value."

Some of the offers I receive are unbelievable. I don't understand how any CIO can ethically accept some of the junkets that we are offered

Will Weider - CIO, Affinity Health (US)

There is a polarization among Australia's CIOs between the wills and the will nots when it comes to accepting or seeking vendor hospitality. For every CIO who steers clear of corporate hospitality there is another CIO happy to court international vendors, knowing that a speaking job at an international conference also means a trip for the spouse, and accommodation in five star hotels. They are happy to press the flesh at the opera or in a box at the Bledisloe, and while they understand there is no such thing as a free lunch, they feel that their principles are not being compromised.

There are some, however, who argue that any form of vendor seduction is dangerous. Certainly Australia's medical practitioners have recently felt the blowtorch of criticism over some of the lavish entertainment heaped on them by drug companies keen to gain their support and interest.

Professor Steve Salbu is the dean of the College of Management at the Georgia Institute of Technology and visiting fellow in business ethics at Melbourne Business School, and he worries that any activity that can generate a perceived conflict of interest ought to be avoided. He believes that while a CIO may or may not be compromised by accepting an all expenses paid trip to see a vendor's testimonial clients or attend a conference, such a trip "creates the appearance of potential impropriety" because it creates a conflict of interest.

"While a steadfast CIO might be able to make purchasing decisions entirely on the basis of price, quality and other appropriate criteria, conflicts of interest should be avoided," Salbu says. Any offer that could be construed as a temptation should be avoided, he says, arguing that "temptation can lead us to make inappropriate decisions; given this fact the most prudent thing is to avoid tempting conflict of interest scenarios in the first place".

This he believes is also the case for vendors, with enterprises of all stripes increasingly the subject of probity checks. "Both sides, the vendors and the CIOs, need to be very careful. Increasingly stringent anti-corruption laws around the world suggest that both buyers and sellers trade in personal gifts and lavish entertainment at their peril," Salbu warns.

Vendors are certainly recognizing this as a potential problem. When Microsoft held its US Enterprise CIO briefing in May this year in Bellevue, Washington, it was headlined as a two-day event featuring 15 presentations by Microsoft personnel culminating in an address from CEO Steve Ballmer. But there was an important caveat regarding the implied largesse. Attendees were told from the outset that, "If your company states that you, as an employee, are not allowed to accept gratuitous items including, but not limited to, product discounts, complimentary transport or thank-you gifts", then it was important to inform Microsoft up front.

The market for junkets is a lot tighter these days than it was even four or five years ago. "They are not as generous or extravagant as they used to be," says one CIO who used to experience more freebies, extra activities, lavish entertainment and gala dinners at computer industry conferences. "It's eased off a bit and that's understandable," he says. Even in the more lavish era, however, he says he never felt pressured by vendors to make a purchase. "I don't know if I'm thick-skinned or what."

The CIO does occasionally make a trip to a vendor site or international conference. "They are useful; you get to see the leading edge technology and to talk to the source rather than the channel here. My views were reinforced when I met the main people."

Although the vendors may organize and invite delegates, this CIO at least always ensures that his employer covers all expenses. But he does not go to many in the first place. "I knock back lots," he says, although occasionally he will ask one of his team to go overseas. "One colleague is just back from a week in the US to see a piece of software that we are going to implement in November. It is a big international vendor and it's very comforting to talk to people at the coalface."

Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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