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.

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Know the industry, know the vendors

UC Riverside's Lee is onboard with that assessment. "The new purchasing pros had better know not only the hardware and software that their organizations might be using, but also how to explain the terms and conditions of a contract in plain English to IT and then analyzing the end result for them," says Lee. "At the same time, they have to know the industry. Who are the players and what are they doing? What is going to affect the delivery of my order?"

Lee sees vendor management as a key aspect of the job. "It's about having and keeping the right vendors for the job in your pocket who will respond to your needs," he says. "Do they have the connections to get the hard-to-get items when you need them? Do you have to worry about their pricing, or can you trust them to treat you fairly every time?"

Lee, a veteran purchasing professional who oversees two subordinates, serves the entire UC Riverside campus, including its Computing & Communications Department. Some managers in the field have limited buying authority and can purchase PCs, printers and similar items, although his group provides them with policy, procedure and guidance on those purchases.

Lee works with senior IT managers who report up to the CIO. Recently, a group worked together to purchase a point-of-sale system to support the campus's dining and retail operations. IT asked for direct support for this acquisition, opting to use a formal bid process rather than a sole-source request that was first considered, Lee explains.

By working together and going with the bid process, Lee says, the campus not only ended up with the supplier that IT had originally wanted, but also scored $89,000 in cost reductions and tighter network security measures.

Partnering on the big purchases

Hank Zupnick, CIO at GE Capital Real Estate in Norwalk, Conn., and an active member of the Society for Information Management (SIM), works with his company's sourcing division to make IT purchases, typically relying on the four sourcing staffers who are dedicated to IT, which comprises some 300 staffers and contractors.

Those sourcing professionals know how to research vendors, negotiate contracts and determine values in deals, he says. IT knows what it needs from a piece of equipment or from a service provider and will set parameters for sourcing to follow.

That said, there is flexibility to the partnership, Zupnick explains. Because the requirements on some items, such as laptops or printers, are clear-cut and information on vendors is plentiful, sourcing can work more independently on those purchases. IT plays a larger role for technology that's less commoditized, such as customized software or equipment made by small vendors that don't garner a lot of reviews.

IT and procurement recently worked together on contracting for a new property management system, a key business process for the company. The team developed a vendor shortlist together; procurement vetted the vendors from financial and operational risk perspectives. Once the vendor was selected, procurement took the lead in negotiating the financial component of the licensing and customization agreement.

Zupnick advises that organizations also involve their legal departments, too, to make sure contracts accurately reflect whatever deals are negotiated and protect both parties' interests. As he sums up: "A good negotiation is when everybody is happy with it."

IT still knows best?

For all the enthusiasm from IT pros like Zupnick and procurement specialists like Lee, not everybody is onboard with such partnerships. Cynthia Farren, a Walnut Creek, Calif., consultant who specializes in software asset management, says some organizations are indeed moving toward this team approach for IT procurement, but most companies still handle IT procurement either entirely in IT or entirely in a corporate procurement office.

"There are very few who have had the maturity to see that they need both sides," she says.

And then there are IT leaders like Brian D. Kelley, CIO of Ohio's Portage County, who is somewhat skeptical of the idea of a separate procurement expert -- at least when it comes to departments as small as his.

With an eight-member IT team, Kelley obviously does not have a separate procurement person; IT purchasing decisions fall to him and two others within his department, which commands a $1 million annual budget and serves 1,300 employees.

Although he acknowledges that some purchases, such as printers or desktop computers, could be handled outside of IT, Kelley says he wants his IT department involved in buying IT equipment and services so it can ensure two things: That the selected vendors can deliver on all requirements; and that contracts address the various scenarios that can affect delivery.

"I think that IT departments have to have in-house the skills and expertise to be able to manage vendors, manage contracts and manage the procurement process," says Kelley, also an active SIM member. "We can't rely solely on others outside our department to manage that because technology is so unique."

That doesn't mean that he's not open to collaboration when it's appropriate. One recent project involved connecting HVAC control systems to the IT network. IT and purchasing worked closely to coordinate implementation phases and connectivity requirements, Kelley says.

In general, Kelley sees IT's job in joint purchasing projects as "maintaining an active role, giving input when necessary and steering the process when there are many different variables" -- all roles that most IT managers would agree with, procurement partner or no.

This article, IT purchasing: Who decides what tech to buy?, was originally published at Computerworld.com.

Copyright © 2013 IDG Communications, Inc.

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