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Getting the Most Out of Your Procurement (Sourcing) Department
Sooner or later you will have to collaborate with your procurement or sourcing department to onboard your vendor, conduct an RFP, or negotiate the vendor’s renewal. Unless you are lucky enough to have a dedicated IT category sourcing professional, chances are your procurement department will not have the resources to understand technology or the ability to comprehend the nuances of IT vendors.Understanding what is essential to your procurement team will increase your operational efficiency and save time and money.
The perception of most procurement departments is that they only care about the price. This perception is a well-earned perception. However, there is a significant shift going on in procurement departments to be more strategic and more proactive in providing business solutions. Perhaps this isn’t too far from your IT strategy. Savings initiatives will continue to be the baseline of most procurement departments’ metrics.
To get the most out of your procurement department, look at the situation through their eyes. They are pressured to drive cost down for the organization through proven governance and processes. Most procurement departments, like IT, are vastly understaffed and lack budgets for training. Seek to understand what is important to them and how you can help them achieve their goals. Knowing Procurement’s goals and objectives, including their key performance metrics and integrating them into your project plan, will ensure your project doesn’t get bottlenecked in Procurement. Don’t just stop there; understand:
- How long Procurement’s process will take.
- How Procurement prioritizes projects.
- How Procurement calculates savings, cost avoidance, and value creation.
- How early Procurement wants to be involved to ensure your project doesn’t get caught in the Procurement log jam.
The end result is a collaborative vs. confrontational relationship with the procurement department. A collaborative relationship is achieved by avoiding the following statements or scenarios:
- “We already negotiated this deal, just get the signature.”
- “This is severity one; I need this by tomorrow.”
- “Can you get three quotes for this by next week?”
- “I have this in my budget; I can spend it how I wish.”
- “This is the only vendor who can provide these services.”
- “You’re the RFP expert, so you should have these requirements.”
The positive synergies achieved by collaborating with Procurement include increasing your negotiating leverage, potentially preserving budget dollars for other underfunded projects, and freeing up resources to manage operations while the procurement team handles the commercial aspects of the deal.
Procurement and IT departments are internal service providers who service the same internal business clients. Leverage this commonality by collaborating and working together to share information, strategies, and project results in a very synergistic collaborative relationship. A significant amount of synergistic success is achieved by holding bi-weekly or monthly business reviews where updates of project status and upcoming projects are reviewed and discussed. Leverage Procurement’s view of the entire organization to uncover shadow IT projects during these business reviews to get the most out of your procurement department.
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