IT RFQs and IT sourcing strategies in transformation: is IT procurement taking over control?

THE IT PROCUREMENT DEPARTMENT AS HUB OF RFQ PROCESSES

Typically, IT RFQ processes cost a lot (of time) and require lots of intense communication. For many companies, the speed has increased significantly. Cost pressure, lack of IT know-how within the company itself, agile processes, and responding flexibly to customers’ needs are only some of the many reasons for the sourcing boom.

More and more often, the IT procurement department designs and is responsible for both the sourcing strategy as well as the design of the RFQ process of its company. Why is this the case?

The ever shorter and ever more differentiated awarding processes require a continuous process optimisation for RFQ processes and contract negotiations. It is only in this manner that a consistently high quality in a company’s sourcing projects, and subsequently an effective provider control, can be ensured.

Quite often, this turns out to be difficult in practice, since the requirements posed to the IT procurement department grow more rapidly than the departments themselves. Here, too, the lack of specialists in the marketplace can be felt palpably. A scarcity of resources and the concomitant requirement, as IT sourcing hub, to be the smallest common denominator of all activities in the RFQ process presuppose a particularly effective control of processes. At the same time, such a professional specialisation of the IT procurement department must also be desired, and the purchasing departments must be enabled to be able to take on this role.

THE NUMBER AND COMPLEXITY OF PROVIDER AGREEMENTS IS GROWING

However, most of the time the real work is now only starting with the conclusion of the agreement: the strategic provider management is responsible for both the contractual as well as the commercial control of the sourcing agreement over the whole duration of the agreement. The intensity of control of the providers has increased in recent years:

• More flexible performance specifications and shorter term agreements mirror the rapid development of the technology and the dynamic provider market. More and more provider agreements have to be managed and these are becoming increasingly more complex.

• The shortening sourcing life cycles increase the pressure on future-oriented sourcing strategies – optimally suited to needs – that the IT procurement department must develop jointly with the responsible business unit.

• By now, Second Generation Outsourcing is a peculiarity no longer, but rather has become a fixed contractual component. Where, in the past, agreement and their performance specification were more or less recycled and only minimally adjusted for the next RFQ, this luxury no longer exists by now.

• New technologies and changed markets are necessitating a dynamic and flexibility in the negotiating and awarding processes that many companies still have to get used to.

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