Poor buying decisions cost your company more than money. The size of your IT supplier portfolio demands that buying decisions be made as part of a disciplined enterprise-wide process, guided by your IT architecture. Without that, countless uncoordinated buying decisions will create an infrastructure that’s overly complex and too complicated to function effectively.
In addition, infrastructure complexity requires many wrappers and black boxes to enable communication among the various systems and databases.
One new CIO, for instance, found 56 general ledgers in 14 data centers on 24 mainframe/midrange platforms. Another IT executive at the company described what had happened this way: “We built this one good decision at a time.” While each buying decision was good in isolation, the overall result was a disaster.
For most companies, the architectures the IT staff designed to meet strategic imperatives are not the architectures their procurement processes are buying. Uncontrolled buying decisions sabotage the best efforts to deliver a specified architecture for the following reasons:
— There’s no defined process to coordinate thousands of buying decisions across the enterprise.
— The architecture and associated standards are rarely detailed enough to guide buying decisions. They don’t identify a specific product to be acquired or describe the trade-offs of using alternatives.
— Underscrutinized products are frequently acquired for high-priority projects in order to meet non-negotiable deadlines.
— Maverick buyers in IT and the rest of the business may contend that a weak process gives them the freedom to circumvent architectural guidelines and acquire technology from a favored vendor.
The buying process requires structure and discipline, much as development efforts require a systems development methodology. A buying-decision process establishes a framework to coordinate acquisitions across the enterprise. It relies on explicit architectural guidelines and requires that all buying decisions be checked against them. It defines consistent deliverables (such as standard contract terms and conditions) and requires stakeholder participation.
This process unifies the IT architecture and its underlying infrastructure and provides the only effective screen to block products and services that don’t adhere to your architecture.
To make your buying-decision process successful, you’ll need to do the following:
— Sell the importance of buying well to the organization. IT and the rest of the business often focus on creating the next application. You must remind executives that most of the applications will be purchased rather than developed in-house. Buying decisions have become a significant part of the development process.
— Get support from all CXOs. A buying-decision process can be successful only if enforced consistently across the enterprise.
— Get the CIO to control the process. Nobody is better positioned to view the IT architecture and its impact on the business. The CIO has ultimate responsibility for ensuring that buying decisions support the architecture.
— Create a centralized team to manage the buying process and assist those making decisions. This team, typically made up of IT staff, may include representatives from other divisions, such as purchasing or legal.
— Provide economic incentives. Most buyers will help if there’s something in it for them, such as cost savings. For example, buyers purchasing a desktop office suite in a separate business unit will care far more about conforming to the corporate architecture if it enables them to buy that suite at a lower cost per seat.
Your infrastructure is the direct result of your buying decisions.
Without a consistent buying process, these decisions will be made without the necessary architectural guidance. You’ll acquire applications, technologies and services that you never intended and some that you really shouldn’t own.
If you consistently buy well, you’ll have a chance to realize the architecture you designed. Buy unconsciously, and you’ll get the architecture you deserve. w Bart Perkins, formerly CIO at Tricon Global Restaurants Inc. and Dole Food Co., is managing partner at Louisville, Ky.-based Leverage Partners Inc., which helps CIOs manage their IT suppliers. Contact him at BartPerkins@LeveragePartners.com.