Last week, all eyes were on the Masters Tournament as legends and legends in the making competed for the coveted Green Jacket. But what on earth does that have to do with IT procurement? Here’s what NPI CEO Jon Winsett had to say over on LinkedIn:
If you watched Tiger Woods at the Masters this past weekend, you would have seen a swarm of spectators on either side of the tee box and fairway. What confidence his faithful fans must have that he is going to hit the shot straight and true – and not shank a careening ball into the crowd. Maybe it’s my own track record of striking members of my foursome whilst on the tee box that got me thinking.
In golf, it all comes down to the point of impact. Your swing (the process) and your golf club (the tools) are just parts of the equation. If that club face is tweaked sideways just a little, then the ball has little chance to reach its intended target.
As I am prone to do, I’ll translate golf to IT buying. The point of impact in this context is the point of purchase for IT goods and services. You can have the best purchase process (your swing) and the fanciest tools (your club), but if you don’t strike that deal squarely, you’ll pay for the mistake. And on a multi-year deal, you’ll pay for a long time….
I think we can all agree the deal pricing and structure is a critical IT cost basis. To truly control your spend, you have to impact where the rubber meets the road – how much am I paying for X product at Y quantity for Z capabilities? That’s the cost foundation that any additional costs are built on.
You could call it a bottoms-up approach to IT spend management. Where the focus is at the point of execution. Where the price for IT goods and services is determined and becomes a common denominator for all those TCO, ROI, price/performance levers that are so coveted and managed all the way up to the C-suite. If you can move the needle at the transaction level, then all that goodness flows upward.
So why do all the fancy, strategic, high-powered professionals and platforms fail to address the transactions where the “cost” die is cast? One reason may be that it’s too hard. You have millions of SKUs in technology, complicated licensing language, and tough negotiations with vendor sales teams. You have to understand what’s happening on the street in a given supply market. Maybe it’s just easier to report on things like “you’re spending too much on your servers as a percentage of IT spend” or “you deployed 42 SaaS vendors across your organization, did you know that?”
There’s all this attention on spend analytics. (Microsoft even entered the procurement analytics game with its purchase of Suplari last year.) But the missing nuance is that diagnosing the problem is only half the battle. How you fix the problem is the other half. It’s important to know you are spending $XM on your cloud infrastructure across your enterprise. But how do you control that spend through your agreements? “I’m spending how much with Cisco, spread over 7 resellers?” Important to know, but how do you strike a world class deal with Cisco? That’s what moves the cost needle.
So if you’re looking to not flub your IT spend management shot this year. Get in control of that, and you begin to truly manage your IT spend. I think we all deserve a chance to earn a green jacket in this round of play.
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