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The Truth About Customer References

The Truth About Customer References

CIOs who accept favours in return for saying good things about vendors are putting themselves and their careers in jeopardy. And so are the CIOs who listen to them

What Is Your Word Worth

Of course, there's nothing inherently wrong with forming a strategic partnership with a trusted vendor. And there's not necessarily anything wrong with accepting something in return for providing a reference either. But companies had better be willing to talk about it, ethics experts say. "If a customer is unwilling to be transparent [about the rewards], then the conclusion that a disinterested party might draw is that the person has been bought," says Daryl Koehn, director of the Centre for Business Ethics at the University of St Thomas in Houston.

So what can CIOs ethically accept in return for serving as a reference? Ideally, nothing, says Koehn. "If the vendor's products are good, the customer should be willing to make a recommendation for that vendor free of charge, right?" she asks. "The question is: why does the customer feel entitled to demand some kind of recompense, or why does the vendor feel the need to offer some kind of recompense?"

If the reference process doesn't take much time, the reference shouldn't take anything in return, Koehn suggests. But "if you're talking about the company's employees being tied up for days, it's not necessarily inappropriate for the customer to get something in return, like a small discount" or free training that takes up roughly the same time as the site visit, she says.

Regardless, the CIO had better believe in the product without reservation. That's why some companies set strict parameters around referencing. For instance, The Hartford Financial Services Group has a policy forbidding its IT group from negotiating better prices or accepting free services in return for acting as a reference. "We pay for the technology and the services that we use in dollars, not in references, not in endorsements," says a spokesperson for the $US15 billion insurance company.

"If we've had a good experience with a vendor, we will occasionally share what the results were, but we try to make sure that nothing could get misinterpreted," says Hartford CIO David Annis. That means making sure that comments made during the reference process could not be interpreted as an endorsement.

The US federal government has barred its employees from endorsing vendors and accepting any gifts unless they go through an elaborate legal approval process. "A government employee who holds the decision-making authority cannot personally benefit from that authority," says Mark Forman, associate director for IT and e-government for the US Office of Management and Budget. What's more, he says, the department as a whole cannot benefit from that kind of arrangement either. "I would consider that inappropriate," says Forman, the federal government's de facto CIO.

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