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Is procurement rearing its ugly head in IT?

Tools
Tags
cost cutting
maverick spending
procurement
Economy

There was a time when IT professionals decided on the technology and the equipment to purchase, and then the procurement side of the company would come in and perhaps try to negotiate a better financial deal. Today, with budgets tight and the economy slowed, procurement is getting involved earlier, and with a louder voice, trying to put halt to so-called "maverick spending" and more aggressively clamping down on costs. There is no doubt procurement disciplines can save money. The question becomes whether IT will suffer.

For more on this tug-of-war:
- see this CIOupdate.com article

Comments

Procurement, like most Finance groups, is penny wise and dollar foolish. They fail to understand that changing vendors and models frequently drives up the cost of support and leads to lower user satisfaction and productivity.

IT continues to believe this it is unique in the corporate structure that the "complexity" of what is done is beyond the understanding of all other mortals. I find it interesting the procurement can purchase all other things (with business support), but not IT equipment, software or infrastructure. Even a position from IT that they are beyond the rules of standard corporate governance is frightening.

As a CxO, there is no better indication that IT needs to be hog-tied -- having procurement authority taken away -- than the thought that professional procurement agents are incapable of doing a better job than non-professionals.

This is especially true as IT continues to fail in outcome delivery. IT has over a 30% failure rate (industry measure) in delivery of promised business benefits from spending. No other element of the business would be tolerated with this type of poor performance. As such, the only clear choice from the CEO/CFO office is to find ways to control IT spending and provide much needed discipline.

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