CXO

Turn the power of the purchasing department in your favor

Patrick Gray notes that there are often adversarial relationships between IT and purchasing, but this doesn't have to be the case. Here are his tips for building the best relationship possible with this key partner.

Like many other internal departments, HR and IT included, expectations for purchasing are often low. At its worst, the purchasing department presents yet another internal bureaucracy to be navigated and managed and a source of "make work" steps that can be particularly harmful to a department like IT that needs to react quickly to a changing environment. This need not be the case, however, and several forward-thinking organizations have competently staffed purchasing departments that can be a huge aid to CIOs, a resource that may be untapped in your organization. Even if your purchasing department is currently filled with clerks who relish nothing more than e-mailing a 100-page form, working with purchasing management to change the status quo can be beneficial to IT in several areas.

Look for purchasing staff who know your business

The best purchasing departments I have seen have staff dedicated to a functional area, in many cases people who actually worked in that area. For example the IT purchasing manager may have spent several years in a mid-level IT role, and while she may not be totally current with the latest technologies, she can speak your language, understand your concerns, and tailor the purchasing process to meet your needs. While these types of people certainly cost more, they allow the purchasing department to actually become a trusted partner in seeking a new supplier, rather than paper pushers to be ignored or fought as they obstruct the process. If your purchasing department is lacking in IT skills, you may want to consider assigning a liaison who dedicates a portion of his or her day to working with purchasing.

Leverage purchasing's strengths

Despite all the grumbling about a bad purchasing department, there is usually one function that any purchasing group does a passable job of, and that is comparative vendor selections. This can be unnecessary for some products (you can count large-scale ERP and virtualization vendors on one hand); for commodity functions like hosting providers or "body shop" consulting firms, purchasing can be a great tool for getting a list of competitors and drumming up a comparative analysis. The better purchasing departments might have suggestions you have not considered; perhaps you think Gartner would be perfect for doing some analysis before starting a new project, when purchasing has a frequently used boutique that provides significantly higher service at a lower cost.

Purchasing departments are generally also good at hammering concessions out of vendors, allowing you to provide direction and the ultimate decision in the selection process, but stepping aside for the sometimes unsavory work of extracting those last few dollars out of the contract. Use your judgment here, however; while you are obviously under no obligation to let a vendor pad their pockets with your company's hard-earned cash, a relationship that starts by beating a vendor to a pulp on costs may result in their nickel and diming you on each and every cost that could be construed as outside the contract.

In the worst case, "blow up" purchasing

More than most other corporate functions, IT is very process-oriented. This often works to our advantage when designing a new business system or doing analysis on current processes. However, it sometimes makes us slaves to processes that add little value to an activity, and we "work the process" for the process's sake.

I am aware of no legal or statutory obligation for a company to produce three-inch thick RFPs or waste months doing ineffective vendor comparisons with an inflexible purchasing department, so should there be a viable business case for avoiding purchasing altogether, take this route and don't lose any sleep over it. The key to avoiding purchasing is to make it a rational business decision, not a turf war or referendum on another group's competence. If you have a six-week purchasing process that requires fifty hours of meetings and analysis from IT, it should be a no-brainer to develop a compelling case for bypassing purchasing for a $20K consulting engagement rather than spending weeks and thousands of dollars for the sake of the process.

Like many things in life, purchasing can be a diamond in the corporate rough if it is competently staffed and willing to partner with other internal business units, rather than serve as gatekeeper and paper pusher. Rather than regarding purchasing as a necessary evil, speak with your company's purchasing management and express your concerns and suggestions, and you just may end up with a trusted partner who makes finding a new supplier a joy rather than a long and difficult slog.

About Patrick Gray

Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent ...

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