Procurement and IT band together as digital initiatives grow

Governance Home IT Contract Management Management

by | November 7, 2018

Dive Brief:
– Procurement and IT are increasingly working together to source new technology, according to a survey of 150 executives conducted by ProcureCon IT and Insights World Business Research.
– Asked which department is responsible for IT sourcing, 57% of respondents said it is a joint responsibility. When asked who should be responsible for the task, 67% said it should be a joint responsibility, rather than one handled independently by either IT or Procurement.
– However, the path to collaboration is still being paved for many organizations: 36% of respondents said the two teams’ goals were only somewhat or barely aligned; while the frequency of coordination varied greatly.  The first step to more alignment, 46% said, was increasing the “frequency of consultation.”

Dive Insight:
As companies hedge their bets on digital shifts, the role of both IT and Procurement is changing from within.

Challenges as diverse as global interoperability and supply chain cybersecurity mean sourcing new software must follow both the procurement imperative to optimize value on each spend category, but also meet complex technical specifications and be continually managed.

“IT spending is often one of the largest single categories of indirect expense within a business,” the report reads, “and it takes involvement from both IT and Procurement leadership to ensure that criteria for performance and value are both respected and actively managed.”

Executives in both teams recognize procuring the right solution is a tough task, without the technical know-how of IT departments, or the contract management expertise of procurement teams. The best alliances, the report found, take place when sourcing and IT teams partner on a strategic level, and as early as the RFP stage.

But establishing an effective partnership is far from a simple task, as the chart above shows.

Survey respondents said the most effective strategy to improve alignment was increasing the frequency of meetings. However, they also named five other strategies that could help a CIO-CPO partnership.


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