Lessen the risk of buying IT

Colin Beveridge, director of the interim managers association Premit, warns of some of the pitfalls in corporate IT procurement

Colin Beveridge, director of the interim managers association Premit, warns of some of the pitfalls in corporate IT procurement

Colin Beveridge

Opinion

Even for the experienced customer, buying IT can still be a fraught exercise, especially when sourcing key business solutions. Sadly, many of the problems are often our own fault rather than a consequence of any sharp practice on the part of our suppliers.

Why? Because we don't always organise ourselves properly before and during the buying process that's why. Some suppliers may say that we don't organise ourselves properly after the sale either but I couldn't possibly comment.

Perhaps you may think that this is an extreme view but believe me, I have seen a number of cases where the procurement outcome has been seriously compromised by some rather questionable buying tactics, particularly when technicians are involved. I am regularly surprised to observe how some IT managers set about spending the corporate millions in their charge. I wonder if their approach would be different if it was their own money at stake?

Let's look first at the commercial aspect of a new IT deal. If we want to buy a genuine business solution, rather than a commodity, we will generally expect potential suppliers to sign non-disclosure agreements in return for providing them with sufficient commercially sensitive information about our business to make their bid. By and large this is a necessary commercial risk and clearly respected as such on both sides.

But how often do we find that our negotiations are compromised by our own staff making unplanned disclosures during the buying process and weakening our position for getting the best deal? This type of damage usually arises from a misplaced, albeit well-intentioned, desire to help the seller to sell their wares to us. Such enthusiasm is understandable, especially when technicians see the prospect of an exciting new technology almost within their grasp.

They will naturally want to smooth the deal to make sure they get the prize as quickly as possible, at any cost.

So much for corporate incontinence. We must always remember though that this unnecessary leakage of intellectual property can do more long-term harm to a business than merely to compromise the price of your new IT solution.

However, when we look at the technical evaluation aspect of a new IT deal, there is another, generally less innocent, form of internally inflicted procurement damage. This is the technical manipulation that can occur when someone from your own side tries to steer the buying decision towards their own personal preference, or technical agenda, usually at a cost to their employer, either financially, or in the form of a future island of technology.

We've all seen the results of poorly informed, or poorly directed, IT procurement and we know that we can end up with yet another liability rather than an asset. And no, it's not always caused when the tail tries to wag the dog, but it happens often enough to worry about.

So, given these two problems, I would strongly recommend two preliminary precautions for every corporate IT buyer:

  • ensure that all your own staff are formally briefed and understand the negotiating process before they are exposed to the sales professionals

  • completely separate the technical evaluation and commercial negotiation processes. This will help to keep the focus clearly on achieving what you really need to buy, rather than something that some of your staff might prefer to have because it suits them.

    No doubt, some businesses already follow this approach. But then again, from my own experience working with many blue-chip clients, I know that many companies do not.

    You should remind yourself regularly that openness, like everything else in this life, comes with a price tag attached and that the cost is rarely in favour of the buyer.

    Caveat emptor? Yes, and beware especially of the self-inflicted hazards.

    Colin Beveridge is director of Premit, the interim managers' association

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