Every organization struggles to find ways to stop internal head butting and promote alignment among the different IT relationships. Businesses strive for alignment because they know that huge amounts of time and resources are wasted when key relationships are dysfunctional. A good example of a counter-productive relationship can commonly be seen in the interactions between IT, sourcing, and the end-users.
If these three groups are not on the same page and lack procedures to guide them through new IT investments, money will be lost. Consider the following:
A large company announces that they will be making some large IT upgrades. Knowing this, vendors start contacting the business end-users with solutions they think they will like. Once the end-user is sold on a certain solution, they go to IT to start the purchasing process. Up until now, IT has been left out of the loop and probably doesn't know much about the technology or if it is even a viable solution with their current IT infrastructure. But, to meet the demands of the end-users, IT rushes into vendor negotiations without being able to benchmark pricing, causing them to lose precious leverage.
Because the three groups lacked common objectives, clear roles and set processes, IT buyers will be at a major disadvantage during negotiations. Without any leverage, the company will pay over market value and probably need additional services to correctly integrate the new solution.
But this all could have been avoided if IT, sourcing, and the business end-users had achieved alignment beforehand. Vendors will always take advantage of this type of dysfunctional relationship and use it to charge above fair market value for their products. Organizations need to understand that all three groups are equally important because they each offer their own knowledge and expertise necessary to making smart IT purchasing decisions. Once they are all able to collaborate and integrate their unique skills into a strong aligned strategy, overspending will be minimized and IT purchasing will be optimized.
If these three groups are not on the same page and lack procedures to guide them through new IT investments, money will be lost. Consider the following:
A large company announces that they will be making some large IT upgrades. Knowing this, vendors start contacting the business end-users with solutions they think they will like. Once the end-user is sold on a certain solution, they go to IT to start the purchasing process. Up until now, IT has been left out of the loop and probably doesn't know much about the technology or if it is even a viable solution with their current IT infrastructure. But, to meet the demands of the end-users, IT rushes into vendor negotiations without being able to benchmark pricing, causing them to lose precious leverage.
Because the three groups lacked common objectives, clear roles and set processes, IT buyers will be at a major disadvantage during negotiations. Without any leverage, the company will pay over market value and probably need additional services to correctly integrate the new solution.
But this all could have been avoided if IT, sourcing, and the business end-users had achieved alignment beforehand. Vendors will always take advantage of this type of dysfunctional relationship and use it to charge above fair market value for their products. Organizations need to understand that all three groups are equally important because they each offer their own knowledge and expertise necessary to making smart IT purchasing decisions. Once they are all able to collaborate and integrate their unique skills into a strong aligned strategy, overspending will be minimized and IT purchasing will be optimized.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI to learn more about IT cost reduction service consulting
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