The Hackett Group report recommendations on IT & Procurement collaboration and how it can benefit your organization in the time of Covid-19 and beyond.
The coronavirus pandemic continues to impact every area of our lives and our businesses in ways that were unimaginable just a few months ago. Whether you are returning to the office or remote working, we are all continuing to assess how we have coped, how we have changed and what we have learned. Everyone is looking for ways to work better, for the benefit of our organizations and the perseverance of our livelihoods. We want things to get back to normal, but recognize that there needs to be a new normal, a better normal if we are to survive and thrive.
Procurement has been uniquely placed on the business front line of this crisis in helping to pivot supply chains from producing make-up to face masks and to finding thousands of items of remote working equipment overnight, or from manufacturing parts for car engines to ventilators. We all know these stories. They gave us hope throughout this crisis.
The Hackett Group study, “Strengthening the Procurement-IT Partnership Elevating performance and accelerating value”, July 2020 is one of a series of great reports which seek to provide guidance on what Procurement teams are doing well and on how they can improve. This study includes input from a range of industries via interviews conducted with pairs of IT and Procurement leaders. Interviews covered past and current relationships, hurdles, improvement efforts and practices and outcomes from the IT-Procurement partnership. Industries included food and beverage, packing, non-profit, medical devices, financials services, chemicals, insurance etc
What is clear from the Strengthening the Procurement-IT Partnership report, is that some organizations have fared better. Amongst the top performers 53% cited a strong partnership between Procurement and IT as one of the reasons they coped. Below I have outlined the main reasons which bubbled up in interviews with both stakeholders:
4 ways a strong IT-Procurement partnership will benefit your organization’s performance in times of crisis.
IT and procurement came together to achieve enterprise goals
Companies hardest hit by COVID were 4 x more likely to blame a reliance on on-premise technologies. The top performers were more likely to have already moved to a place where both IT and Procurement had a shared view on what was good for the company. For the top performers where these relationships were already strong they were quickly able to get over hurdles and focus on what was important, in the moment, for the business. This has never been more important than in the time of Covid-19. Many organizations urgently needed IT equipment literally overnight and quickly being able to get on the same page was vital. IT leaders interviewed for the report offer this piece of advice to Procurement – be open minded and receptive to alternatives from IT. Procurement needs to be mindful of the project stakeholders and what they want to achieve, but also be open to alternative suggestions from IT. It is hard to get to this place at speed in a crisis, such as the one we are experiencing.
Blending of IT and procurement teams
Top performers are used to a blurring of established silos. In these organizations teams are sitting together and are completely embedded in each other’s teams – in fact they are playing for the opposite team and in many cases, taking direction from both heads of department. These are long term established relationships where the IT folks really know what good Procurement systems, tools and best practices look like and where the Procurement professionals are in the habit of consulting with IT and have taken the time to be more strategic and more proactive.
Agreement on the table stakes, non-negotiable
ROI or TCO, security of the solutions, and ability to be integrated with existing systems, and interdependent infrastructure. These are not the sexiest things to talk about, and so sometimes they are ignored and become the fly in the ointment but without both IT and Procurement having a common understanding and agreement on these requirements it is very difficult to progress on innovative opportunities. Top performers have moved beyond the basics and reached this level of strategic agreement.
Early mutual engagement
One of the case studies cited in the Hackett Group report on IT-Procurement partnerships is a Chemical manufacturer. This organization wanted to modernize and replace its legacy on-premise procure-to-pay solution with a cloud solution. Procurement led the project, but the team was a joint procurement-IT team. Procurement brought the procurement process knowledge and both teams worked jointly for months on identifying needs all the time keeping in consideration IT’s compliance requirements. The steering committee consisted of both the CPO and vice president of IT, and together they built the business case and requested capital. In working together from the start they were also able to prioritize what was good for the organization and focus on emphasizing how the Procurement software modernization would benefit the organization in reducing costs. We know that many implementations also run into difficulty because the right teams are not engaged. In this case there was a smooth transition, once a cloud-based procurement solution was selected and a full-time team of 15 IT and procurement staff was assembled to carry out the implementation.
Nobody knows when the Covid-19 crisis will end. So many lives have been lost, and continue to be lost. Many, many businesses have been impacted and redundancies announced. Individually, if we have been lucky enough to come out unscathed we are all looking for ways to ensure the future resilience of our organizations, and to learn from the top performers on what advantages may be gained to mitigate against further waves and the economic backlash. For Procurement and IT, further collaboration presents an opportunity to ensure stability and position themselves as influencers and strategic authors of the future success and survival of their businesses. The Hackett Group report presents great insight into the advantages of this collaboration and the benefits to both teams and to the organizations they serve.
You can read The Hackett Group report here: “Strengthening the Procurement-IT Partnership Elevating performance and accelerating value”, July 2020 or you may want to watch the webinar replay.
Senior Global Digital Marketing Manager
Bernadette has worked for 20 years in various Marketing Roles in the Technology Industry. She started her career at Oracle where she managed Public Sector Marketing for the UK & Ireland and EMEA Marketing for Healthcare. From Oracle she moved to Ariba and lead Field Marketing for Northern Europe. She was part of the team that transitioned to SAP Ariba and then to SAP. She joined Ivalua in November 2017 to lead Ivalua’s Global Digital Initiatives. She is passionate about social media and is an active blogger.
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