Achieving true alignment between the various IT relationships within an organization can be extremely difficult. But businesses need to keep alignment as a constant objective if they want to put an end to wasteful spending in the IT budget. A common dysfunctional relationship that plagues many businesses is the one between IT, sourcing and business end users during the IT purchasing process.
If these three groups are not on the same page and lack procedures to guide them through new IT investments, money will be lost. Consider the following:
An organization decides that it is time to make some large IT upgrades or additions. IT is possible that vendors contact the end-users first to market a particular solution. If the end-users like the solution, they then bring it to IT to tell them that this is the one they want. At this point, IT have been left in the dark and likely doesn't know much about the technology including if it is even compatible with the current systems in place. But, the end-users have already decided that this is what they want, so IT is forced to rush the purchasing process. As a result, they (most likely) won't have time to benchmark pricing or properly equip themselves with the right insight for vendor negotiations.
Because the three groups lacked common objectives, clear roles and set processes, IT buyers will be at a major disadvantage during negotiations. Without any leverage, the company will pay over market value and probably need additional services to correctly integrate the new solution.
Fortunately, there is a way to steer clear of these money-wasting scenarios, but the change must start at the top. Before any large IT investments are made, management needs to acknowledge that IT, sourcing and the business end-users all have roles of equal importance in regards to IT purchasing. The each bring a different knowledge and expertise that, when integrated correctly, allow organizations to make the best purchasing decisions. Vendors can and will take advantage of companies that fail to encourage this type of collaboration, so the time for alignment is now.
If these three groups are not on the same page and lack procedures to guide them through new IT investments, money will be lost. Consider the following:
An organization decides that it is time to make some large IT upgrades or additions. IT is possible that vendors contact the end-users first to market a particular solution. If the end-users like the solution, they then bring it to IT to tell them that this is the one they want. At this point, IT have been left in the dark and likely doesn't know much about the technology including if it is even compatible with the current systems in place. But, the end-users have already decided that this is what they want, so IT is forced to rush the purchasing process. As a result, they (most likely) won't have time to benchmark pricing or properly equip themselves with the right insight for vendor negotiations.
Because the three groups lacked common objectives, clear roles and set processes, IT buyers will be at a major disadvantage during negotiations. Without any leverage, the company will pay over market value and probably need additional services to correctly integrate the new solution.
Fortunately, there is a way to steer clear of these money-wasting scenarios, but the change must start at the top. Before any large IT investments are made, management needs to acknowledge that IT, sourcing and the business end-users all have roles of equal importance in regards to IT purchasing. The each bring a different knowledge and expertise that, when integrated correctly, allow organizations to make the best purchasing decisions. Vendors can and will take advantage of companies that fail to encourage this type of collaboration, so the time for alignment is now.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI to learn more about IT cost reduction consulting
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