Three quarters of IT chiefs believe procurement 'hinders rather than helps'

22 September 2015

Maverick spending by some IT departments, including bypassing official purchasing processes, could increase risk for firms, according to research.

A study by Wax Digital also found most IT leaders were dismissive of the procurement function’s value.

The CPO Viewpoint research included a survey of 200 procurement, finance, IT and sales and marketing department decision makers in medium to large UK organisations, carried out by Redshift. It found 78 per cent of IT respondents suggested procurement hindered rather than helped their department. And one in three admitted bypassing official purchasing processes.

Where procurement was involved, only 19 per cent of IT respondents said the procurement team actually led on IT cost savings initiatives. This compared to 43 per cent of procurement respondents claiming that they did.

The report said: “It may be that the complex requirements of IT require a certain level of autonomy, however procurement can support this with stringent tender processes that can reduce risks, supplier evaluation and contract management tools to heavily assist IT in the selection and management of suppliers and contracts.”

The research also revealed different priorities for spend, with procurement departments focussing on front-end technology devices and hardware, while IT departments placed greater importance on infrastructure and security.

IT and procurement teams were more closely aligned when it came to supply chain risk. Almost half (46 per cent) of IT respondents identified the most important contribution from procurement was in the areas of supplier risk and negotiation.

Wax Digital director Daniel Ball said: “The fact that IT departments often spend without procurement’s oversight makes maverick over-spending likely and could open the organisation up to severe financial and reputational risk.

“Let’s face it, it’s an industry littered with project failures, therefore it’s critical that these two departments look to collaborate more effectively than is obviously the case in many organisations.”

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