Global corruption watchdog Transparency International defines corruption as
the misuse of entrusted power for private gain
You might think corruption is mainly an issue in places like sub-Saharan Africa or Myanmar, but unfortunately I’ve been exposed to several cases of this inside the online industry. Below some recent examples as reported by members in our Community of Practice. Judge for yourself, whether you feel this qualifies as corruption; perhaps even a corporate crime, such as corruption, or whether you think it is morally justifiable:
- A member signed up for a US web conference and the employer naturally paid the USD 1695 conference pass as well as flight and hotel costs. In return the member received an iPod Touch (retail value from USD 229) at the conference.
- One of our conference speakers was invited to speak at IBM Lotusphere, a 5-day conference with almost 10,000 delegates in Orlando, Florida. IBM picked up the flight and accommodation as well as a complimentary conference pass (retail value >USD 1000). A case of IBM inviting the speaker because of qualifications – or possibly one of pleasing a decision maker and good customer?
- As a surprise gift one of our members received a very nice star telescope (retail value >EUR 1000) from their existing system integrator. Incidentally, the member was in the process of selecting a new CMS, which could potentially have led to the appointment of a new system integrator.
- A proclaimed vendor-neutral consultant spoke at a vendor conference, where the vendor paid the “vendor-neutral” consultant a significant fee
- Another vendor paid a significant fee and travel costs to get a newly hired analyst from an “independent research company” to keynote their annual user conference.
Transparency International has the following to say on the costs of corruption:
The effect of corruption on the social fabric of society is the most damaging of all. It undermines people’s trust in the political system, in its institutions and its leadership. Frustration and general apathy among a disillusioned public result in a weak civil society
I’ve seen many examples of contracts being signed with a vendor that was not actually the best fit for the project. As my old mentor always used to say: “The best product never wins”. Perhaps he was referring to the fact that many buyers are corrupt. Many countries have laws or guidelines in place that puts limits on the monetary value of gifts that government employees can receive. Regardless of whether you work in the private or the public sector, I strongly feel that the above examples are, to say the least, morally wrong.
Do you agree that corruption remains an issue in this young and immature market? Do you have some examples to share? What can we do about it?
In the interest of full disclosure – J. Boye revenue from vendors is about 21 % of our annual turnover, which primarily is sponsorship money to our conferences, vendors attending as conference delegates and report sales. We do not consult for vendors (including system integrators) and they cannot join our community of practice. We also never speak at vendor events, nor do we accept freebies from vendors such as hotels or flight tickets.
Travis Wissink April 10th, 2009 13:03
Janus,
Interesting post. However, I have a different perspective on your first point. You know if the iPod touch thing is clearly listed on the homepage of the conference site and is part of the transaction in a very transparent it may not be a corrupt thing. Some employers may use that as a way of motivating employees, not only does the employee go to the conference to learn and bring back knowledge but because the employee was away from their family or home base they get a toy. I may disagree with motivating employees through toys but it is a tactic.
Similarly as selfish as the third point, I don’t like the software sales fees i.e. kickbacks that company’s can get from vendors. Company’s like system integrators and consultants could get a kickback from software vendors when they work through the sales cycle between a vendor and a customer. I think these kickbacks are on balance sheets as influencer fees, agent fee, referral fee, introduction commissions, etc… I do not accept these fees and I let people I work with that I do not like these types of fees discussed or transacted. If SI’s, consultants, or whoever wants to sell software they can do it the transparent way of becoming a VAR for the vendor.
Cheers!
-Travis
Janus Boye April 10th, 2009 13:03
Travis,
Yes, if the iPod Touch is clearly listed on the conference homepage and if the decision maker is aware of this, then yes, it may not be corruption. In the case of my member, the conference delegate and budget approver was not the same person and my concern is that not all managers are told that they are subsidizing a toy for their employees. I’m wondering if it is possible to attend such conferences at a substantial discount if you do not want the iPod?
Perhaps corruption qualifies as another inconvenient truth?
Graham Oakes April 11th, 2009 13:03
Hi Janus,
Of course corruption exists. One of the reasons governments and large corporations have complex procurement processes and rules is to try to combat corruption. This then creates an escalating arms race as people try to find ways around the rules. And the consequences of this arms race is that a lot of good options get excluded. So corruption ultimately creates costs for all of us.
As your examples show, corruption can be a complex issue and drawing the boundaries is often fuzzy. At the heart of it, all people are biased — we seldom (if ever) make decisions on purely rational grounds. Lots of things influence our preceptions of vendors and hence what we buy. This is why organisations invest in branding, advertising, salespeople, etc. Most of this investment is fine; some of it crosses the boundary; all of it creates biases. What we need to do is to try to find some way to make “fair” decisions in amongst all the different biases amongst the decision makes and influencers.
For me, the crux here is transparency. If I know that the speaker at a conference is being paid by a vendor, then I can take that into account when assessing what they say. If my client knows that I’ve worked on projects to implement Plone and Interwoven but not on Mediasurface, then they can assess my advice accordingly. (Of course, the bias goes both ways — having worked with them, I know more about their weaknesses as well as their strengths.) And if I’m offered a “discount” by a vendor, I always pass it on to the client (as you’ll have seen with people I’ve recommended to your conferences and CoPs).
BTW this is also why consumer protection law is so much stronger than for corporates. Consumers don’t have the resources and expertise to fully assess the biases in the messages they receive, so the law protects them. Corporate bodies are expected to exercise judgement for themselves. Corruption exists not just because some people break they rules — it also exists because some buyers fail to exercise appropriate judgement. We’re all accountable for eliminating corruption.
Graham
Rahel B April 11th, 2009 13:03
You forgot the type of corruption that is built into a business model but not necessarily disclosed to customers – that is, the firm of analysts whose job is to recommend “the best” vendors, but you know that they are actually choosing the best from their list of vendor-clients only. Because their vendor-clients have to pay significant fees, they tend to have the larger vendors as clients – the “warship” size software suites of the industry. When their consulting-customers (people who pay to get consultations) need a recommendation, they get a recommendation for the best “warship” but if they need a speedboat instead, they will never know that because there are no “speedboat” size vendor-clients on the roster. I wrote about a particular experience I had (http://intentionaldesign.ca/2008/02/26/caveat-emptor-cautions-when-choosing-a-cms/) and gather that the industry hasn’t changed much. When I see that there is still much confusion about the difference between a Web CMS and a Component CMS, I wonder how much progress we’ve made in the last few years.
CMS selection practices need maturation | Intentional Design Inc. April 11th, 2009 13:03
[...] Boye, a content management analyst whose skills I have long admired, recently posted an article Is Corruption [in the CM industry] an Issue? In it, he discusses some of the ways that vendors inadvertently, or purposefully, incent buyers to [...]
Jon Marks April 13th, 2009 13:03
Interesting post. It made me start to think about a few of the things we do. I started writing a comment but it started to turn into a long, incoherent babble. So I turned it into this blog entry instead:
“Which Comes First: the Crew or the CMS?”
http://jonontech.com/2009/04/12/which-comes-first-the-crew-or-the-cms/
The main thought is whether it is ethical for an SI / Agency ever to help with a CMS Vendor Selection exercise. Or can only truly impartial non-implementers (such as J. Boye or CMS Watch) do this fairly.
Janus Boye April 13th, 2009 13:03
From a customer perspective, it might make sense to work with an SI / agency to help with a CMS evaluation exercise, as long as the customer know if any commission is paid to SI / agency based on their decision and as long as the customer “exercises appropriate judgment” as Graham Oakes said.
John May 1st, 2009 13:03
Yes,I believe the practices you describe ‘corrupt’ or taint the decision making process. Few see it though, particularly when confronted with the choice of accepting or returning the iPod Touch. I have heard many, in varying workplace arenas, worry about the impact these things have on others’ decisions. However, when put in the same situation, they accept the ‘gift’ and dismiss its influence. “How dare you suggest that my integrity could be bought for so little,” they say.
Scott Abel May 14th, 2009 13:03
I agree that there are a variety of ways that CMS purchase decisions can be influenced and that vendor-neutral consultants should work to avoid potentially negative situations. However, I think the article would have been clearer if you did not include the iPod touch example.
The reason I say this is that because the iPod touch was (I believe) provided to people who paid full registration price to attend a conference — which is not the same thing as purchasing a CMS. The “gift” was not actually a gift as there is a lower ticket price that does not include the iPod. When you pay the higher price for admission, you get the iPod. But, let’s be clear, you’re not getting a gift; you’re buying an iPod…and a conference ticket.
That said, I agree that many organizations have policies against receiving gifts that should be respected in these situations. If your employer pays for the ticket and the iPod and doesn’t know they are paying for the iPod, that makes the conference attendee (the employee) corrupt.
The definition of the word corrupt means guilty of dishonest practices. It’s not dishonest to accept a free hotel room or airfare assistance or speaking fee when a vendor asks you to travel thousands of miles and take up several days of billable time to speak at a conference. That’s called compensation. Everyone deserves to be compensated. But not everyone chooses to accept the compensation. Nor should they be forced to. It’s a personal choice.
For me, I will not recommend any vendor when it’s not a good fit for the client, regardless of whether they treat me special, provide me with free software, or pay me to travel to an event. I am happy to be compensated for my time, regardless of the duty I am performing. Of course, I’m not easily dazzled by the shiny prizes vendors use to hypnotize potential customers and influencers like myself. Some others, however, may be able to be influenced.
The bigger scandal has nothing to do with freebies or compensation. The biggest challenge I see is vendor neutral consultants that fail to speak up and tell CMS vendors that it’s not acceptable that they don’t practice what they preach. It’s high time that we stop pretending that it doesn’t matter when CMS vendors don’t use their own tools in the way they tell their clients to. It’s ridiculous for anyone who calls themselves a CMS professional to allow vendors to get away with not practicing the same techniques that our clients will have to use in order to make their CMS do what it was designed to do.
Thanks for starting this discussion. It’s meaningful and thought provoking. And, of course, there are many viewpoints.
J. Boye » Blog Archive » Don’t buy licenses from your system integrator May 20th, 2009 13:03
[...] from my usual concerns about corruption, here’s why you should buy your software licenses directly from the [...]