IT teams feel that those who are not as technologically savvy may not fully understand the product or services in order to successfully negotiate, therefore they then take over the purchasing. When this occurs, it not only ties up IT resources from completing their day to day activities, but also may not yield the expected savings and contractual language clauses that the company requires. Identifying a way to mitigate these perceptions between procurement and IT departments is critical in the success of a company. In order to get around these drawbacks, collaboration between the two teams is required to ensure all requirements are met. For example, the procurement team will bring their expertise in sourcing and by consulting with the IT team technical specifications are established. It is important to gain credibility with the IT department which can be achieved by understanding the organization's technology and insight to determine how specific technologies can benefit the organization. Sharing that insight with the IT department will often gain credibility and make them feel more comfortable in contacting the procurement team for assistance with negotiations. Additional benefits that can be gained by IT and procurement collaboration on large IT purchases may include:
- Consistency: Procurement professionals negotiate and review various types of contracts all day, they are able to apply their knowledge and expertise to streamline process and promote savings.
- Leverage: Throughout the RFx process, the procurement team is in direct communication with suppliers and is often able to leverage that relationship to provide benefit to the organization. Leverage can also be gained by procurements knowledge of what other departments within the organization are currently sourcing to ensure there are not duplicated efforts.
- Contract Management: With the amount of contracts IT departments typically execute, it gets difficult to manage all contract terms and payments. The procurement team ensures that all contracts are managed properly to mitigate any potential risks of contract breaches or unnecessary renewals.
- Right-size Contracts: When negotiating IT contracts for hardware or software, ensuring that all teams are on the same page in regards to sizing is very important to allow for the flexibility and scalability throughout the life of the agreement.
- Focus on Total Cost of Ownership: From an RFx process, a supplier can be evaluated more effectively and not selected solely on price. By considering other factors instead of price it will add to the value of service/product long term.