For some time, Chief Information Officers (CIOs) and IT departments have been in the driver’s seat when it comes to evaluating and adopting technology solutions. However, Chief Procurement Officers (CPOs) and procurement teams have been co-piloting the process more and more as their responsibilities and influence increase across the enterprise, particularly with IT. The two business leaders, by virtue of their position within the enterprise, bring unique perspectives and histories to the process. This article, based upon Ardent Partners’ recent report, The CPO and CIO’s New Approach to Evaluating Enterprise Technology (sponsored by Coupa), provides a brief overview of the evolving legacies of the CIO and CPO concerning enterprise technology evaluation and where they go from here.
The CIO’s Legacy: IT Governance and Management from On-high
For a generation, CIOs and IT departments tightly governed the adoption, implementation, and management of technology solutions across the enterprise. Under an executive mandate, these leaders typically made decisions in a top-down manner as a way to manage the financial and operational risks associated with costly and lengthy technology implementation projects. To mitigate these risks, CIOs and IT departments would often be compelled to sacrifice the needs and wants of their constituents (business process owners and line-of-business users) and select solutions based upon technical, rather than functional, considerations.
To be fair, CIOs and IT departments have had legitimate concerns because there was much more at risk a decade ago – overall project costs were far higher than they are today and implementation projects took months, if not years. Above all, the successful launch of a solution was far from guaranteed. They required significant internal IT resources to implement, manage, and support a new solution. Enterprise software projects also required what, in retrospect, could be considered outlandish third-party implementation consulting fees that could easily range between three-to-five times the overall software license fee.
The CPO’s Legacy: Cost Beats Function… Every Time
Similarly, Chief Procurement Officers and procurement teams, when they did become involved in enterprise software evaluations and negotiations, tended to take a command and control approach to the process. Like IT, procurement had its directive and just as the CIO’s mandate governing IT often conflicted with the requirements and preferences of its business stakeholders, the CPO’s mandate governing cost could be seen as paramount, at least by the procurement team. Adding an element of sourcing rigor to the solution selection process could add real value but procurement’s cost-first (or cost-only) approach made it difficult for many procurement teams to get engaged early on in the project simply because business stakeholders were wary of losing project ownership and control. For procurement this was problematic since getting involved sooner on a sourcing project can make the difference between acting as an active project leader or as a simple order-taker. Ardent Partners research has shown that getting the procurement team involved earlier on a project can also drive savings, improve quality, and reduce risk.
When procurement, IT, and the business stakeholders all joined a technology selection project team, competing interests and directives had the potential to alter the trajectory and destination of the project. And, when the final solution was not well-aligned with the stakeholders’ core requirements, disappointing adoption rates, continued inefficiencies, and a poor ROI were the likely outcomes. The good news for business users is that recent technology innovations and a more broadly-accepted view of the strategic impact technology have helped foster a transition from an IT-centric approach to one that favors the interests of the business process owner.
A Shared Responsibility
In light of advances in cloud-based solutions, self-service applications, and user-friendly tools, Chief Information Officers and Chief Procurement Officers have the ability to co-lead the discussion happening across enterprises regarding the adoption of the next generation of business tools. This conversation is buttressed by the tech savvy, risk averse legacy of the CIO and the cost-centric, savings-oriented approach taken by the CPO. Together, they can help enterprises adopt business solutions that are robust, secure, scalable, and user-friendly that can also save the enterprise a lot of money and deploy easily. Separately, CIOs and CPOs may take divergent approaches towards technology evaluation; but together, they can achieve the best of both worlds for businesses and end users, alike.