IT is Becoming a Commodity; That is What We Are Being Told

Andy Percy, Director IT Business Planning and Operations, Freescale Semiconductor and Karen Rapp, VP & CIO, Freescale Semiconductor
881
1459
280
Andy Percy, Director IT Business Planning and Operations, Freescale Semiconductor

Andy Percy, Director IT Business Planning and Operations, Freescale Semiconductor

Well, if that is the case, CIOs don’t need to care much about procurement. Let the buyers do their job, drive costs down, get what you can for the budget and keep our cash in our pocket for as long as you can with extended payment terms. Sounds pretty good, sounds table stakes.

CIOs need more. CIOs do care about procurement, they care a lot.

The role of the CIO is to accelerate business value and provide a rich user experience through the use of technology. Changing the pace and way of doing business provides a competitive edge and that fundamentally means balancing and even biasing a focus towards unearthing the disruptors in the market. It’s the CIO’s job to find innovative partners with the ability to literally change the world.

IT land is saturated with buzz words such as, Big Data, cloud, CRM, ERP, virtualization, out of the box standardization, an app for everything, offshoring and saturated with vendors looking for IT’s business. This amplifies the need for procurement to teleport themselves; flux capacitors at warp factor 10, into what are likely unchartered waters for many of them. Every minute of hesitation is an opportunity to lose ground. We cannot have that, so how can we help each other?

Take the first step, talk. Understand what motivates each organization. Typically for procurement the goal is - savings percentage year on year and cost avoidance no longer cuts it. The IT focus is to continue to increase service levels, but for the same or less budget. A few unlucky souls may even have been teased with a start of year budget increase, and then had that trimmed as second half financial forecast session kicked in. Regardless, what is needed now is to go beyond these traditions and talking to each other facilitates the real possibility of getting a common excitement about the rewards that the right technology and vendor combination can bring to achieve the goals of each organization.

Sounds simple, and it can be if you choose to make it simple. Industry analyst reports are not thin on the ground. Technology centric magazine blogs are plentiful. IT is a well networked community (pun intended) and benchmarking is a staple for some. The answer is out there, the key is to know the question--what do you want and why?

This is a good time to come back to the buzz words.

The term buzz words suggest overuse and inherently a dilution to their value. On the contrary, the buzz words that we are talking about are the competitive trends for Enterprise IT and must be taken seriously. We all know every penny counts and, remember, every moment of hesitation is an opportunity to fall behind. If that is what we are trying to solve for, then the reverse engineered algebraic equation is Procurement + IT = competitive edge.

Anyone who doesn’t like having a competitive edge?

In the spirit of provocative thinking, which organization should lead? IT has the technical assessment bench strength. Procurement has the negotiation savvy. But how can you negotiate on “never been seen before” technology? Which organization has that skill? or both? This is business and everything has a cost and a value. It is business as usual and that should not be forgotten. Everyone wants to make money, get the best deal and feel like they won. Again, the key is to know the question-what do you want and why?

One may consider this as stereotyping each organization, but each team is employed based on core competencies and success may arguably depend on leveraging these competencies. IT wants the shiny new toy as it will, of course, fix all ills. Procurement, says you cannot afford it and it will put an unwanted dent in their savings metric. Perfect recipe, not for a stalemate but for that competitive edge.Karen Rapp, VP & CIO, Freescale Semiconductor

In the real world, a deal is done between people. As such, we all have our lines in the sand which we just cannot cross no matter how tempting. The art of negotiation is to come away with a deal. No deal means no one is happy and as people, we want to be happy. Build on this individual level desire and more often or not, a deal will be done. Simply put, find a way to know what the other person wants and find a way to give them it knowing that the most obvious way is not the only way. Ignore it, and, well, good luck. In the context, of what we are talking here, which is technology for accelerating business value and enriching user experience, we have to establish an ecosystem for success. Candidly, this sounds like the cost vs value agreement and we have been conditioned that cost will win. But let’s not give up the fight for value and that the algebraic equation inputs of Procurement + IT is poised, perhaps as the underdog in some quarters, but poised none the less to enter the arena.

Mostly, The choice is ours. It is not intended to sound naïve, to think value can consistently overcome cost, it is a matter of pace, not the intent. Be opportunistic.

CIOs need more. CIOs do care about procurement, they care a lot.

Who cares about CIOs? Who wants their email to work on Monday morning? Or should the question be, email, why do I need that, surely someone has something better that costs less?

Read Also

Trends in Technology Procurement: The Evolution of Retail and How It Applies to Self Service Procurement

Trends in Technology Procurement: The Evolution of Retail and How It Applies to Self Service Procurement

Anthony F. Porter, Head of Global Procurement & GSVS, Acxiom Corporation
Enterprise Agreements

Enterprise Agreements

Carol Spector Dingle, Vice President - Technical Services, On Assignment, Inc.
Proven Procurement Techniques with Sophisticated Purchasing Analyses

Proven Procurement Techniques with Sophisticated Purchasing Analyses

Charles Dominick, SPSM, SPSM2, SPSM3 Founder, Next Level Purchasing Association
How Your Procurement Team Can Help You Save Money on Telecom

How Your Procurement Team Can Help You Save Money on Telecom

Jennifer Shepherd, Director, Global Sourcing and Procurement, Russell Investments