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The Dangers of Dysfunctional IT Purchasing Processes

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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.

It is crucial that these three groups operate out of the same “playbook” with regards to new IT projects. Without alignment, the cost risks are very high. Take the following example:

A large enterprise wants to make significant IT upgrades. Vendors may contact end-users directly to work with them on a solution that they may be interested in. Once the end-users decide that this is the solution that they want, they go to IT to let them know. IT probably knows very little about the solution or if it will even work with the company’s current IT infrastructure. But, because the end-user is adamant about this particular solution, IT must scramble to make it work without having the time to benchmark pricing or gain insight for 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.

This situation would never have happened if IT, sourcing and the end-users had reached internal alignment before any IT purchases were considered. It is crucial that the three groups discuss and agree upon buying procedures and that everyone understands their role throughout the entire process. Companies that combine each groups’ strengths and expertise to make smart purchasing decisions will be able to save money, decrease risk and optimize IT purchasing. On the other hand, companies that fail to realize that each of the three groups plays an equal part, will continue to overspend on IT investments.

Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He suggests that you visit http://www.npifinancial.com to learn more about telecom cost management

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