One of the easiest ways of all to blow your budget is to let vendors smooth talk you into purchasing technology you do not actually need, and yet cases like this can occur in an instant when your business is not properly aligned. Joseph B. Kappernick writes a bite-sized article reflecting on the relationship between IT, sourcing, and business end users during the IT purchasing process.
He poses a hypothetical scenario in which a large company announces an intention to make large IT upgrades. Vendors readily propose technology solutions to the business-end users, who like what they hear from the vendors and go to their IT department to start the purchasing process. The problem is that IT, having been kept out of the negotiations process, must scramble to see if the agreed upon solution even works for their particular IT infrastructure, let alone what an appropriate cost for such a solution would be. What ends up happening is that IT pays too much for new technology that may or may not actually help the company grow. Kappernick offers what could have been done instead:
But this all could have been avoided if IT, sourcing, and the business end-users had achieved alignment beforehand. Vendors will always take advantage of this type of dysfunctional relationship and use it to charge above fair market value for their products. Organizations need to understand that all three groups are equally important because they each offer their own knowledge and expertise necessary to making smart IT purchasing decisions. Once they are all able to collaborate and integrate their unique skills into a strong aligned strategy, overspending will be minimized and IT purchasing will be optimized.
Vendors are not villains. They just like money as much as the rest of us. It is squarely the company’s fault when overpaying occurs from misalignment. Do not let this happen to your organization.