What is happening? Part 3

status quoLet’s look into IT procurement “best practices” in a recession (not a complete list and based on STKI Round Tables and meetings):

1)       The IT procurement organization has a responsibility to keep vendors aware of corporate objectives and strategies. This will keep vendors focused on how they can help fulfill business goals.

a.       Use Web2 technologies (blogs, etc) to create IT procurement transparency. Explain buying decisions and mandates through social systems.

2)      Question the status quo.

a.       Is the procurement process matched to the new economic realities?

b.      Are current replacement plans necessary? Can we move them back? Delay deployment plans of unpopular systems like Vista.

c.       Don't let blind cost cutting destroy relationships, quality or compliance standards.

d.      Look to buy new tools that will improve monitoring of contract compliance and service level agreements.  EXAMPLE: PPM project portfolio management as a gatekeeper that prevents overspending.

e.       Cut the weak, superfluous vendors that were hanging on in good times.

f.        Don't just cut -- be ready to invest. Be prepared for acquisitions and the upturn. Don't rule out a relationship with an amazing new vendor.

g.       Everyone thinks they are good negotiators -- they're not.

h.      Move from long-term contracts to short-term. This will lower risk.

3)      Software licensing issues:

a.       Stop constant, unnecessary upgrades.

b.      Cut maintenance contracts on mature or non-critical software. Take the risk and lower cost.

c.       Cut back on software proliferation -- use these times to create fewer, stronger standards and rationalize licenses.

d.      Re-negotiate perpetual licenses, if needed (although some have better value than new contracts).