What can IT learn from Purchasing

More than they might think.

I am often struck by the similarities between Purchasing and IT functions:

  • Both are often considered back-office support functions by “The Business”
  • Both are of extremely variable quality – there are some very able and … not so able …. individuals in each. Meaning some of these live down to their stereotype, but many are unfairly hamstrung by the stereotype
  • Both spend a lot of energy arguing that they should be represented on the board
  • Both often suffer from a lack of professional prestige in their professions (compared to, say, finance people)
  • Both often get brought into projects too late to be able to add any real value, so they are left to pick up the pieces, thereby confirming the business’s stereotype that they are purely a back-office support function (see above).

Judging by this the two departments seem to be natural allies. Yet somehow the prevailing mood between the two functions is often one of mutual mistrust.

A large part of the IT budget is spent on suppliers (hardware, services, etc) but the CIO has a couple of concerns:
(a) doesn’t want to lose control of this spend.
(b) is not even sure what value the purchasing guys could add, anyway. After all, how can you buy computers if you don’t know the first thing about them?

Of course, this kind of weak reasoning is exactly the same that “The Business” often applies to the IT department: “What value is IT going to give me in putting together the requirements for this new system we need – they have no idea of the processes we use.” This argument completeley misses the point. The IT department knows how to use technology to solve a whole range of business issues and is best used as an equal partner in the development process for new systems.

A dose of Do unto others seems to be called for here.

The job of the purchasing department is to negotiate with suppliers and secure supply of goods and services. Purchasing knows a thing or two about how to do this well.

Some thoughts:

  1. However good a deal you think you have got from your suppliers, the purchasing guys will be able to get you a better one (i.e. more for the same money, or the same for less money).
  2. Yes, they will get you a better deal. They won’t take control of the IT hardware themselves. And they will only go out and source what you tell them you want.
  3. It isn’t a bad idea to have someone around who can play bad cop to your good cop when it comes to supplier negotiations.
  4. Less effort for you if you get someone else involved to do a lot of the legwork in sizing up potential suppliers.

Next time you are thinking of (re-)negotiating a contract for supply of IT goods and services, do yourself a favour and pick up the phone to Purchasing. Who knows, you might be able to save some money to spend instead on all those interesting projects that you haven’t got the budget for right now?



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