A new report from ProcureCon and Coupa has found that even though 83% of IT and Procurement teams do not have shared KPIs, collaboration between the two functions is improving due to the demands of ongoing digital transformation projects.
The research has revealed that closer working relationships are being reinforced by regular meetings to discuss strategy, earlier involvement between procurement and IT during technology sourcing projects, and more IT-savvy talent working in procurement teams, allowing the two groups to speak a common language. Key findings include:
- 52% of IT sourcing projects are handled jointly by procurement and IT, while 25% are handled by procurement only and 23% by IT only.
- 23% of CPOs and CIOs enjoy “close strategic collaboration on an ongoing basis” and 49% collaborate as necessitated by individual sourcing projects
- 55% of respondents indicate that their goals are either mostly or fully aligned with those of the IT organisation, while another 27% are somewhat aligned
- Only 4% regard their digital transformation as “completed”, 30% regard it as “underway or nearly finished” and 43% say their transformation is “just beginning”
- The top four IT spend categories are third-party software support (54%), consulting (43%), computer hardware (39%) and telecom (30%).
- 36% see cybersecurity as a shared responsibility between IT and procurement.
The report’s authors recommend establishing regular interaction (daily coordination) between embedded or closely-aligned staff in the IT and specialised IT procurement teams, even if the CIO and CPO have difficulty in increasing their frequency of meetings. Face time between teams can allow a mastery of the issues at hand, increasing reporting and regular quality control within a centre of excellence.
Skill-sets are seen as an increasingly important for IT and procurement to maintain an even footing in their relationship. Cross-departmental skillsets will also enable a development of a common language. The report notes that “hiring procurement teams will often favour IT background or experience under the assumption that procurement techniques can be more easily taught”. Another important point raised in the report is that technology procurement is no longer siloed within the IT procurement team in most organisations. Every procurement professional needs a base level of tech savviness as they will at some stage be engaged in IT sourcing relevant to their category.
Take co-ownership of digital transformation strategies. Notably, this is best achieved once a foundation of trust has been established between procurement and IT.
Finally, the report authors stress that formalised shared KPIs is not a necessary foundation of procurement and IT collaboration, given that only 17% of respondents actually have such KPIs in place. Instead of “merging the missions of procurement and IT around a formalised metric”, it is more important to establish lines of communication and develop shared goals.
Download the report: How Technological Change Continues to Impact CIO and CPO Relationships.