Ditka Reiner likens the relationship of an
IT acquisition professional to his/her internal customers to that
of the relationship between a shop owner and his customers. "It
isn't about handling one transaction," she says. "It's about relationship
building. It's about trust."
As president of Reiner & Associates,
San Rafael, Calif., Reiner works with IT acquisition professionals
involved in negotiating contracts for software and other technology
purchases. She is a frequent speaker at Caucus (the association
of high-technology professionals) events, including the group's
annual conference held recently in Washington, D.C.
For IT acquisition professionals to be successful in their careers
they need to participate in the success of their companies. They
must think of themselves as part of their organization's competitive
edge. Reiner says that thinking behind processes for sourcing software
must change: from a "traditional purchasing" model to that of an
"IT acquisition" model.
Organizations that use the traditional purchasing model to buy software
are typically conservative in their thinking. They do not employ
technically experienced professionals; nor do they manage software
inventory across the enterprise. They don't make supplier recommendations,
and they don't look at the bottom line.
The IT acquisition model, on the other hand, uses both technically
experienced and business-savvy professionals to buy software. IT
organizations that follow this model take a leadership role in the
management and inventory of software. They are responsible for keeping
the organization informed regarding supplier capability and they
take the corporate bottom line personally. The shift from a traditional
purchasing model to the IT acquisition model is not easy, says Reiner.
"You need planning, execution, support and luck."
Such change is necessary, Reiner says, because of the evolving role
of the IT function within the organization. In the early 1990s,
IT was totally focused on technology. It was an isolated function,
often aggressive and leading edge, yet it did not have much influence
on the development of business strategy within the organization.
Then as technology became more entwined with business strategy (i.e.,
deployment of ERP systems, the rise of e-commerce), IT has become
a participant in developing and implementing corporate business
strategy. Now reporting directly to the CEO at many organizations,
IT "has a seat at the table."
Reporting relationships are important, says Reiner. The corporation
needs to see IT and contract negotiations in the context of strategically
binding the organization to a future technology path, which typically
doesn't happen until the CIO has a relationship at the highest levels
in the organization.
Now that testing for Y2K readiness is finished, the new year should
open up real opportunity for IT. Among them: integrating systems
of organizations involved in mergers and acquisitions that had been
put on hold and growing demand for e-commerce strategies. IT needs
to help move the organization cohesively to support these activities
and, at the same time, keep in mind corporate responsibility to
shareholders. The bottom line is constantly being affected by the
actions of the IT function. Shareholders want high returns.
As Reiner sees it, therein lies an inherent conflict between IT
and technology suppliers. Each is driven by the profit motive. As
technology becomes more complex, more companies are entering into
alliances with suppliers. Companies want to trust their suppliers,
but alliances usually work in favor of the supplier. Very rarely
do they work for the CIO. "We need to remember," Reiner says, "that
a supplier will not get involved in an alliance unless there is
something in it for him. "Even relationships based on risk/reward
agreements hold more risk for the customer than for the supplier."
What companies need is more support from the supplier. They need
for the supplier to do more than install software. They need help
in meeting business objectives of their organizations. They need
cross-product supplier support. (Merging organizations have different
database platforms companies should be able to convert from one
to the other.) They need software upgrades and help in controlling
spiraling maintenance fees. They need software that works as advertised.
What the IT acquisition professional provides are contracts that
ensure these protections.
It is not surprising that under such pressure,
many organizations don't have time to understand the value of the
IT acquisition professional. They often see this role as one of
a commodity buyer. But the two are not the same, Reiner stresses.
"Commodities such as pencils and paper have simple specifications.
The markets for these items are mature and don't change much."
In order to be successful, IT acquisition professionals need to
understand where technology is heading, says Reiner. "They need
to develop clauses and contracts that will protect their organizations
over the long term." They need to advertise the successes! Reiner
suggests that IT acquisition professionals develop and use a process
to document savings that they show to management quarterly. "And,
remember to thank those who helped. If your appreciation is genuine,
it will come across that way."
IT acquisition professionals have to educate themselves. It also
helps, Reiner says, to think like entrepreneurs, to take risks.
She suggests "read everything, and that IT acquisition pros, "Get
out of your comfort zone. Learn more about your company. Go to all
meetings held in the department for which you are responsible. Learn
their business processes. Then when you negotiate a deal you will
understand the impact the hardware or software has on the business.
You will know what to add to a contract and what to give away. You
will be their representative and you will be adding value to the
process. Your internal customers will not forget this.
You need to work to build trust and understanding into a relationship
that's based on mutual success: "Don't wait for someone to tell
you what to do. Talk to your internal customers, ask them about
what they do, their biggest challenges, how you can be of help to
For example, Reiner recalls one colleague who in negotiating a contract
changed some of its terms, which later had to be exercised allowing
the organization to save millions of dollars. A senior executive
made it clear within the organization that the clause he hadn't
asked for had resulted in significant savings. There was no question
about the added value of the service of this IT acquisition professional
and this reflected on the entire department. Reiner suggests that
"you come up with new ways to get things done. Brainstorm. "Involve
your business partners, you will get support."
Individuals with the skill set outlined in the technology acquisition
model may be difficult to find. Organizations that retain such highly
skilled individuals learn that the investment pays off. Once the
organization accepts the need for this role, the IT acquisition
professional needs to be focused at all times on service. "You can't
become mired in procedures, says Reiner, "then you become a roadblock."
A shift in thinking
To be successful, organizations will have to move from the traditional
purchasing model to the technology acquisition model.