Procurement and IT departments get a bad rap for many stereotypes: focusing too heavily on requirements bingo, always harping about cost reduction initiatives, being demanding towards their partners, slowing projects down, having suboptimal understanding of business needs, and holding rigidly on to their processes.
Both functions get a lot of objections for their strict rule-keeping. Their controlling and governing mindset leads to an obsession with processes, rules and regulations, and this obsession eventually causes tunnel vision. For other stakeholders, they can feel like IT and procurement always paint them as thieves or sloppy workers.
This makes it hard for the two to work with their stakeholders in an open, honest and collaborative way, let alone to work together.
Heavy Workloads, Frustrations
Procurement and IT are best known for their large workloads and long backlogs. Projects that should have been done yesterday often hit their desks too late. This means that often they are not able to do their best due to late involvement. The complexity of requirements and lack of proactivity in stakeholder collaboration increases cycle time, which in turn leads to higher amounts of stakeholder frustration.
More than 50% of line of business managers say they're frustrated with the speed of delivery of IT projects, while nearly 60% believe that IT is just “keeping the lights on,” so to speak, and not driving digital innovation. The same can be said for procurement, who have been guilty of being operational taskmasters.
It’s time for both IT and procurement to rise above these stereotypes. IT and procurement can begin an era of collaboration. Still, there are many old habits that must change. Rebranding the functions in the hopes of a fresh start will fall short if there is no real change in mindset and ways of working.
Here are nine essential tips for increasing the love between procurement and IT:
Establish common ground. Procurement and IT share a lot of common ground in their love of data, rhythms and ways of working. The key to a productive collaboration between the two functions is recognizing their fundamental relationships with data and bridging their data processes. The vast wealth of external data utilized by procurement needs to be integrated and connected with internal data (e.g. transaction data) to be insightful. Therefore, a valuable IT-procurement relationship must share efforts to integrate these different sets of data when building a procurement data ecosystem.
Align strategies and must-win battles. Aligning interests can reveal either synergies or misalignments. These findings should be discussed with the management and can act as a great conversation-opener for improving alignment and connectivity. As the designated heads of IT and procurement, the chief information officer (CIO) and chief procurement officer (CPO) both have the responsibility of assessing their department’s key objectives.
The No. 1 priority for CPOs in 2021 was "driving operational efficiency," closely followed by “reducing costs” and “digital transformation,” according to Deloitte. For CIOs, top priorities included digital transformation, operational efficiency and resilience, according to Gartner Inc. The CPO and CIO agenda share a lot of common ground, and both include digital transformation in the top spots. With all the possible applications of data and analytics, it’s exciting times for CIOs and CPOs to work together on digital transformation projects.
Align project pipelines. Identifying potential for joint projects can reduce the duplication of effort. Often, procurement and IT are working with the same vendors simultaneously. Working as a united front secures their interests and can lead to more satisfactory negotiation outcomes with vendors. Better project pipelines help others visualize their workload on the individual level making for happier and more productive teams.
Walk a day in their shoes. Choose to believe in the good intentions of the other party. Understand the other’s concerns and aspirations. This includes the question of prioritization. Where the two functions become misaligned is how they prioritize different business cases. For IT, they want an orderly and well controlled data architecture, while procurement wants the best fit tools for users, fast. What should be central to the issue is the industry specific challenges of the business domain.
Prove your value. If I scratch your back, you scratch mine. Like working with any other function for the first time, you need to prove your value and why it makes sense to involve you. IT could support procurement in the technical aspects of negotiations or in adopting agile project methodology. Procurement could support IT in better vendor management and ensure IT interests are covered in SLA negotiations.
Agree on mandatory requirements. Procurement and IT have their own sets of requirements and standard documents to introduce to vendors. If both parties have access to the latest versions of standard documents and requirements, hiccups can be avoided later on. As a result, the understanding of requirements across business functions will improve. Do what you can to make the other function’s life easier.
Agree on representation in leadership teams. To earn your seat in the leadership team, you need to prove your value with hard results and exciting insights. Share information frequently and represent each other where feasible (having one seat at a crowded table may be easier than two seats). Business leadership could be interested in frequent external data insights, vendor performance updates or key project status. Build each other up in the eyes of the stakeholders.
Share data and information proactively. Sharing your development roadmap and successes will help prove your value for the wider stakeholder audience as well. Visualizing your project pipeline and workload will help them understand why it may be difficult for you to deliver for the next day if you were not engaged early enough.
Learn to speak the same language. In order to shed some light on the occasional tension between IT and procurement people, I’ve compiled this (not so serious) translation guide for understanding one other.
Sammeli Sammalkorpi is co-founder and chief executive officer of Sievo.
Timely, incisive articles delivered directly to your inbox.