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IT purchasing: Who decides what tech to buy?

When it comes to purchasing hardware, software and services, IT knows best. Right? Maybe not, say today's specialized procurement pros.

October 2, 2013 06:00 AM ET
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Computerworld - Lowe's knows a thing or two about buying and selling, so it means something that the Mooresville, N.C., home improvement retailer established a procurement department to help its various divisions make better deals.

Now Tom Nimblett, director of procurement for IT, HR, finance and Lowe's dot-com divisions, reaches out to IT managers at all levels, including the CIO as needed, to consult on tech purchases -- which are not inconsiderable given the company's 1,000-person IT staff and annual IT budget of $1 billion-plus.

An expert in procurement, Nimblett, who reports to the CFO, leads a 12-member team that knows how to negotiate contracts that protect corporate information, mitigate risk, ensure consistency and save money -- even on complex products like hardware, software licenses and cloud services.

IT procurement: Key skills

The task of buying IT equipment and services requires a professional to have a number of key skills, experts agree.

People skills. To Brian D. Kelley, CIO of Ohio's Portage County, that means someone who can work through problems and bring parties to consensus and agreement.

Good communicators are able to cultivate relationships with the IT department as well as vendors, elaborates Patrick Campbell, a senior consultant and instructor with International Computer Negotiations, which provides consultant and education services related to IT procurement. Of high importance is the ability to identify and bring together stakeholders and facilitate cooperation and action among them, he says.

Experience in structuring contracts. Buyers need to be able to construct deals that include incentives and penalties, payments tied to milestones, nondisclosure agreements and other pertinent requirements and then work with lawyers to fine-tune terms and conditions.

An understanding of the organization's technology as well as insight into how that technology meets the organization's objectives. "There has to be credibility. An IT director or an IT officer or a CIO isn't going to feel comfortable handing over a [purchasing] negotiation to someone who doesn't know IT," says Campbell.

Nimblett is well aware that Lowe's process differs from many other organizations, where CIOs and the IT department take charge of buying technology and still retain tight control over it.

"The theories from the past, and a lot of organizations still have those, say that because it's an IT product, no one else is intelligent enough to know about it or is intelligent enough to negotiate for it, and therefore it's held within IT," says Nimblett, who worked in IT at other Fortune 500 companies before moving into procurement at Lowe's.

But when purchasing is siloed in that way, not only do you tie up talented IT people doing a job that's not their core competency, you often end up with deals that favor vendors and not the company, say both IT and procurement experts.

The emerging best practice for IT procurement mitigates those drawbacks by bringing procurement professionals and technologists together.

Nimblett's team recently handled a new contract with a vendor to provide IT services in the field. The procurement group contributed its expertise on sourcing, while IT brought its expertise on specifications and technical designs. Together they were able to review with confidence information provided by vendors.

"The partnership allowed emotion and opinion to be tabled while a common solution was found," Nimblett says. "The end result created a well-defined service model for our stores at a cost-effective price."

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