A recent article on CPO Agenda that asked if there is a hole in your synergy strategy bucket made some very good points about how Procurement can often help to identify the right IT strategy and synergies to make a merger or acquisition a success.
However, what it failed to mention is that in addition to contract analysis and risk assessment, market research, negotiation management, and should-cost analysis, procurement can also serve as the mediator who helps the organization identify the IT needs and the most appropriate strategies. Furthermore, until the desired go-forward strategies are identified, contract analysis and negotiation management are irrelevant — who cares about license rights, location of use, competitive intelligence, or contract consolidation if you’re no longer going to use the system.
Furthermore, trying to determine the right IT solutions to keep based on license agreement analysis is worse than putting the cart before the horse. If you can get the horse angry enough, maybe he’ll kick at the cart until it moves forward. But if you keep the wrong IT solution, your employees won’t even kick at it … they’ll find every means possible to go around and bypass it completely.
Procurement can play a crucial role here as well. As the one unit that has to continually negotiate with all organizational units with respect to purchases, it can lead the analysis team that reaches out to every organizational unit to understand not only what software they are currently using, but what their needs actually are and work with IT to come up with a strategy that addresses the anticipated needs of the merged organization. Furthermore, as the central mediator and (hopefully) technology-savvy market analysts (who should be using modern e-Sourcing and e-Procurement systems) who talk to both IT departments and external entities, they have a better chance of figuring out when an objection is due to platform limitations (hardware, software, etc.) or simply a resource limitation (the support techs don’t know the software or don’t think it’s the right solution). In the end, the biggest negotiation will likely be with the organizational units that want to merge, and not the vendors, who will probably be more responsive to demands in exchange for a bigger customer and more dollars in their pocket in the long run.