For all the years I worked in IT management, rarely did anyone from the purchasing department ever approach me, except to challenge items I would purchase within my allowable budget that had peculiar, almost comic book-sounding names. (As if I really wanted to purchase a DDOS cloak from the Black Lotus!)

Typically, it was up to me to approach the purchasing department with my requests and wait for the immediate answers of “no” or “it costs too much”. In the name of equality (or getting even), when purchasing approached me for favors, they were typically told to get in line behind everyone else.

Fear, Uncertainty and Doubt

Can the Commodity Team get alongFrom an IT perspective, the fear is always that purchasing will buy the cheapest solution and leave the IT department to make a gourmet dinner out of table scraps.  From a procurement perspective, the concern is that IT is wasting money on the “latest and greatest” new toy that will be obsolete in 3 years.  When this kind of mistrust is prevalent among departments within an organization, in the long run, nobody wins.

While these slightly exaggerated examples are based on my real-life experiences, I think the time has come for all IT and Purchasing people to declare a truce and hug it out, literally.  The reason; we can really help each other to improve processes and save money.

The area I am going to concentrate on today is in IT purchasing, since that is one area I know well.  Now, in the larger organizations that the Next Level Purchasing Association offers group training to, we train IT professionals who also have a purchasing background or are being brought up to speed on purchasing strategies and best practices.  However, for organizations with smaller (or even one person) IT and purchasing departments it is critical to be on the same page.

Beware of the Shady Supplier

Shady Suppliers fear the Commodity TeamUnfortunately, an unethical supplier will attempt to take full advantage of a purchasing professional who has no background in IT whatsoever and attempt to overload the IT solution with jargon-filled descriptions of superfluous add-ons and modules above and beyond the needs of the organization.  

Also, the unethical supplier will attempt to lure the IT professional with promises of seamless integration and “world-class” support for only $$$ / month or $$$$$ / incident buried deep in costly legal clauses within the fine print.  Here is where the savvy purchasing professional is desperately needed; especially one with contract negotiation experience and one who negotiates aggressive service level agreements

Friends at Last: The Commodity Team!

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Benefits of a Commodity Team

On the other hand, ethical suppliers see the real benefit in IT and purchasing working in tandem as a commodity team.  Immediately, the ethical supplier realizes the opportunity to gain trust and business is much smoother when the concerns of both departments are addressed at the same time. This allows for more in-depth discussions of their product offerings as well as meaningful negotiations without intermediaries having to run messages back and forth between departments. 

This united front between the two departments also lets suppliers know ahead of time that they need to be on top of their game to earn the organization’s business.  The commodity team determines the project requirements and a well-defined supplier evaluation criteria (such as weighted average scorecards).  In turn, this saves time for the organization making the purchase as time wasters and poor-performing suppliers are immediately weeded out and serious suppliers are treated as potential business partners.  A definite win-win for the buyer and suppliers!