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Shifting role of IT in Procurement
By Marc Kermisch, VP and CIO, Red Wing Shoes
Information Technology departments used to be at the center of technology procurement. Gating access to technology for their companies, controlling systems used by employees, protecting architecture, validating scale and ensuring security. Over the past decade, IT has seen its ability to influence technology procurement dwindle. With the explosion of consumerized technology choices from smart phones to cloud services, technology users have more choice and ability to procure their own technology than ever before.
Type in "free software" into Google and thousands of results are returned. Talk with an employee at any company about how they use technology and they will most likely mention GMAIL, Dropbox, Sunrise, Google Docs, Zoho, Facebook, LinkedIN, Instagram, and What's App. Dig deeper and that same employee will share with you how their own IT organization is not providing them with the tools they need to do their job. So, they supplement those tools with readily available technology in the market. They don't think twice about implications to security, scale, or stability. Our consumers of technology are more apt to help themselves than rely on a centralized IT organization, turning to mobile device provider for hardware assistance, Google "Help", or other forums to find their answers.
Credit Card Software
While there are hundreds if not thousands of freemium software in the marketplace, a credit card can get you even further. $12 per month will get you a subscription to Zoho CRM, $29 per month will get you a full ecommerce site from Shopify, and $13 per month will get you a server on Microsoft Azure. None of these requires engagement of IT, a Legal Department, or Procurement. These services are month to month, will return your data upon canceling service and can scale to hundreds if not thousands of users.
Name your 'as-a-service' and it’s out there. IT is not necessary to stand up an ERP as software companies from SAP to NetSuite and WorkDay push further into the Cloud.
IT Procurement should be used as one tool to enable the business to realize the value of the technology they require
While there maybe requirements to integrate Cloud services into legacy applications, the traditional role that IT has played in selecting software for the enterprise, sizing environments and building out the user experience is shifting to either the software provider or their implementation partners. Marketing departments have been flocking to external services for decades. With the digital convergence, their Marketing Agencies are turning into outsourced IT service providers for them. Enabling analytics, media buys, eCommerce, Customer Engagement platforms, and social listening services. These software providers, Marketing Agencies, and other service providers aren't burdened by Legacy Systems or bureaucratic department processes. They enable our business partners to move quickly and realize value faster.
We have all felt the impacts of consumerization of technology in the workplace. The App Nation driven by the iPhone has forever changed how our users expect to use technology. IT does not play a role in procuring the App's that are on our employees phones. At best we can add to the curation of App's that are available to our organization to use. However, we continue to have to be prepared to support and potentially engage with new Apps every day.
Taking into consideration Freemium, Credit Card Software, Cloud/SAAS/ PAAS/IAAS and App Nation how can IT procurement practices be leveraged to manage costs, technology proliferation, and ensure your company is able to manage its risk. There are three areas where IT plays a role: Education, Enterprise Enablement, and Risk Mitigation. First, IT is in a unique position to educate our business on how to procure these services, what the pros and cons are of their software choice, and how to best negotiate terms, conditions and price. If the business wants to procure their technology, IT needs to help teach the business how to "fish" for themselves vs. trying to gate all technology use. Second, as IT educates the business we need to do a better job of helping the business determine when they need our support for Enterprise Enablement. Salesforce.com is a perfect example of a product that often if not always requires enterprise enablement. Enterprise enablement is when IT is required to connect a platform/system to legacy applications, configure or build out work flows and reports, or extract data for analytics. When extending a platform/system across an enterprise and ensuring stability and scalability, IT is an invaluable partner to the business. Participating upfront in the procurement of software requiring enterprise enablement accelerates the realization of business value. Third, IT can provide perspective on how to minimize risk be it financial, data protection, and/ or scalability, availability and support. The business rarely is positioned to think through these issues nor understand the complexities in negotiating through them.
IT's role is shifting from gating technology to enabling integration of technology, access to data, and empowering our ever increasing tech savvy users. IT Procurement should be used as one tool to enable the business to realize the value of the technology they require.