Today’s guest post is from Torey Guingrich, a Project Manager at Source One Management Services, LLC who focuses on helping global companies drive greater value from their indirect expenditures, such as IT and Telecommunications investments.
In our last post we noted that even some of the most mature Strategic Sourcing departments tend to struggle with IT because IT spend is off limits or out of reach for traditional sourcing and procurement efforts. We then examined the three most common excuses, or hurdles, and provided some guidance on how to overcome them. Once you convince IT to give Procurement a chance, the next step is to …
DELIVER THE VALUE
Once you have overcome these hurdles with IT stakeholders, it is critical to follow through with the value that Procurement has promised in the sourcing and contracting process. Looking at a need identified by IT through a sourcing lens will likely lead to better defined requirements and a better relationship between the IT department and the supplier with whom they ultimately work.
- Sourcing: Competitive bids and the RFx process can, and should, be used for IT and telecommunications initiatives. Because IT departments tend to partner more closely with their supply base as compared to other indirect categories, it can be easy to accept a proposal or pricing from a supplier who knows the company’s systems and basic requirements quite well. While this may be a faster route, Procurement needs to help IT ensure that the supplier’s proposal is the best fit for the organization’s needs and is competitive in the market. Work with IT to develop an RFP that allows suppliers who may not be as intimately connected with the department to propose innovative solutions and competitive pricing.
- Scope and Deliverables: Once Procurement and IT have worked together to award an initiative to a supplier, Procurement’s value will be further demonstrated while going through the contracting process. Press your IT stakeholders to clearly define their expectations, the scope of the project, and the deliverables that the supplier will provide. Many business owners tend to think in “end state” deliverables, but be sure to inquire whether there are processes or defined stages that the supplier is expected to go through to get that end state, e.g., system, integration, and/or user acceptance testing. While there may be assumed expectations, work with IT to ensure those assumptions and expectations are defined.
- Timelines and Acceptance: While working with IT to define the agreement deliverables, tie in timelines and dates for the company’s acceptance of mid-stream deliverables. Ensure there are key checkpoints prior to the final acceptance testing window to minimize rework or changes that need to be made. Also, be sure to use a critical eye when defining acceptance procedure and timing; often suppliers will insert language that assumes acceptance if no formal communication is received by a certain number of days. While this is intended to keep projects moving forward, you can change this language to require an affirmative acceptance by the company or at the very least, ensure the timing for default acceptance is ample enough to allow for any internal reviews that may take place.
While IT systems, products, and services may not be second nature, treat your business owners in a way that lets them know you are there to help ensure their requirements are met and their budget is maximized. IT — more than any other area — seems to consistently have budget on the chopping block, have projects pushed out year after year, and be asked to do “more with less”; by becoming a solid partner and delivering value to this group, you can not only help them make better buying decisions, but actually achieve their departmental goals.