How to Improve Collaboration Between Procurement and IT
By Hugo Britt | August 23, 2022
There’s an iconic scene in the 1951 sci-fi classic The Day The Earth Stood Still when the killer robot, Gort, first steps out of its spacecraft. The assembled politicians, journalists, and soldiers quickly realize that Gort is so unreadable, so alien, that there is little hope of understanding, communication, or peace.
For sourcing professionals, attempting to collaborate with another function can feel a bit like trying to establish contact with an alien species. You don’t speak the same technical language, you appear to have a different set of goals and targets, and you have no idea how to even begin to create a productive relationship.
The consequences of poor collaboration can be very expensive, particularly in the realm of IT. Salesforce found that 86% of employees and executives cite lack of collaboration or ineffective communication for workplace failures.
How to improve collaboration between the procurement and IT functions
In episode 56 of the Sourcing Hero podcast, Kelly Barner spoke with Barry Rogers, Senior Manager of Strategic Sourcing and Procurement at New Relic, Inc., to gather some tips about how procurement can collaborate with IT.
1. Understand business goals and priorities
Even when two functions appear to have very different sets of priorities, common ground can be found by looking at the organization’s overall goals and targets. This can help establish a common language and provide the starting point for effective collaboration between two teams.
“[One skill that is essential for procurement] is being able to understand everything that’s happening in the business,” says Barry.
“If you understand where you’re spending your money, you kind of understand where the business is going as well. Even in today’s world where you’re totally remote and you’re not walking around and getting a sense of things that are happening in an office, procurement folks should – if they have their eyes and ears open – be able to get a great sense of where the business is going and how you can fit into that based on where people are spending money and the different types of things that they’re buying.”
2. Understand how the product will be used
“It’s critical that [procurement has] a pretty deep understanding of how the IT product is intended to be used,” recommends Barry.
Failing to attempt to understand the product usage will limit the ways in which procurement can add value to the project. “You have to be able to really ‘get’ what your customer, stakeholder or requester who’s looking to buy the tool really wants, and ask ‘What exactly are you trying to do here?’,” says Barry.
A lot of the time, the people requesting an IT tool may not be particularly familiar with IT, which means procurement must have enough technical knowledge to ask the right questions.
3. Speak the language of IT
IT managers’ eyes will soon glaze over if you attempt to talk to them using procurement lingo. They don’t want to hear about RFQs, reverse auctions, or supplier scorecards. At the same time, you may find yourself unable to follow IT terms such as Business Intelligence, Big Data, Adaptive Technology, and Integration.
Hire or train members of your procurement team to gain a base understanding of IT language, along with the function’s challenges, priorities, and ways of working. For example, most IT teams have adopted Agile development, which means procurement should understand how this works even if they don’t practice Agile themselves.
4. Focus on the data
There are a lot of factors to consider when purchasing IT ranging from supplier reputation and cost to support, reliability, fit-for purpose, and more. But there’s one factor that Barry believes procurement should focus upon above all others: data.
“Data is a major priority,” says Barry. “In fact, data protection is the number-one priority for us as a vendor management office, followed closely by security, [then] by pricing, budget, and spend. The data protection side of things is a top priority for our executive team. We’re a data-driven company so it’s something that we take very, very seriously.
“We [talk about data] as a heavy part of our roadshow. It’s part of our slide deck – how it all comes together. But it’s actually all managed within our intake tool. We have different teams that have input in there. We have our privacy team who look at the GDPR or CCPA type of requirements and make sure we’re compliant from that standpoint.”
5. Be a conduit between different teams
It can be tempting to think of an IT purchasing request as a two-way conversation between procurement and the stakeholder, but the reality is that several other parties are involved. Procurement can leverage its understanding of how the product will be used to act as the focal point of this multi-party discussion.
“Something from the sourcing and procurement side that I think is really important is we’re the ones that generally are the conduit between the different teams,” says Barry. “We’re the focal point. We’re the ones talking to Infosec, talking to Privacy, talking to Legal, talking to Finance, and talking to the requester or the stakeholder who is essentially your customer and trying to put those pieces together.”
6. Establish expectations as early as possible
“Ultimately, it’s about having clear expectations with the business partner and with the business as early as possible and getting out there ahead of time and showing them what you can do,” advises Barry.
“Get in and be part of their planning cycles such as a monthly or quarterly stand-up or a meeting with Finance, or dial into project meetings so you know what’s going on. Then you can ping that person afterwards and say, ‘Hey, if you’re thinking about this, let me know. I’ll help you get a head start on the process.’”
7. Be alert for IT duplication
Large businesses in particular need to watch out for IT duplication, where a new tool is requested despite existing tools already having a similar capability. This can lead to higher costs and the risks associated with shadow IT.
“We have our Infosec team who are heavily involved in the review of any new tools,” says Barry. “We have a tools governance board internally when we get new tool requests that come in. That’s a fairly new endeavor which is great because a lot of the [existing] tools may do something similar.”
“If you can get 80 percent of the way there with something you already have approved, then maybe that’s something you have to push back on. You don’t want to impede productivity by any means but, at the same time, you have to be efficient in some ways. We monitor that very closely for new vendor requests that come in.”
Interested in learning more about how procurement and IT can work together to better the organization? Listen to the full podcast episode featuring Barry Rogers here:
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