The recent past has seen a lot of rigor in this process, with expectations of better deals and discounts driven by tightening budgets. In many cases, Finance teams were thrust upon the CIO to validate or take over the negotiation. The underlying assumption is that Finance has better negotiation skills, and they will fiscally protect the enterprise’s interests. It is another matter that these individuals (with best of interest) had little knowledge of the overall value propositions on the IT solutions. Another angle discussed is of governance, elimination of temptation driven by large value transactions, and keeping everything above board. 

In the early days of my career, one of the executives charged irregularities in IT purchases. I welcomed the conducted audit, which validated the IT departments’ innocence and above board dealings. This set into motion a change in process with the induction of another coworker from Finance during the buying process. While she was in the initial stages an observer more than a contributor, over a period of time, she was able to start adding value. The cast aspersions were no longer a talking point, but collaboration was considering the perceived transparency that it brought to the process.

There have been not so pleasant experiences too for some CIOs facing “interference” from other functions, as they do not understand (nor make an effort to). Thus the strained relationships between IT, vendors, and largely the finance/purchase team leads to a lose-lose proposition for the enterprise—with delays, inefficient negotiations, and missing line items in the overall project charter or Bill of Material. Everyone finds this an ordeal, but is unable to change the outcome, as the value propositions are not understood.

If your organization is functioning well without involvement from other functions in IT procurement, periodically review the perception of how you are seen doing that same. It would help you address issues before they become a talking point. On the other hand, if your organization does require purchase decisions to involve a larger group, get them into the discussion from day 1. Else you may face frustrating moments in the future. Their involvement and participation will be a function of whether they are measured on this. Make sure that KRAs are aligned; else they have no reason to devote time beyond what makes them win and look good.

I also had the privilege in a company to have senior finance personnel sit through tech vendor presentations nodding knowledgeably for a while. Then they would start making excuses not to participate, or get off the meeting as some important call took them away.

Real time information availability has been business’ aspiration for a long time. IT enablement of the processes and operations in an enterprise expedited availability, but batch processing still did not provide the information as the event happened. As the data mining tools matured and models appeared for predictive modeling, gaps of the present became very evident. SOA Integration and middle layer technology solutions reduced the time gap. Mobile computing removed the physical presence limitation, as trickles of information could be provided on the handheld.

Now cast an eye across industries and various processes that are fed with, or create information. We will observe that today information flows with every step, decision, and event—irrespective of the sector, size or geography, the paradigm is uniform. People create information, people consume information, and people transform information. Managers, supervisors, CXOs, and even customers, seek control with real time information availability. Is it necessary to provide real time information to all the stakeholders? How does it change their behavior, decision or end outcome, if at all?

Take the case of retail. For a customer shopping in a store, price information on nearby stores in real-time is valuable, as it helps her get the best price for a product. To the retailer, a product sold is information, as it indicates that a customer has chosen a product from the shelf, and the stock count is down by one. Based on the supply chain’s agility, the retailer can use this information to plan for replenishment. The information can also be shared with a supplier who may use this snippet for planning next delivery and the impact on production schedule.

All this looks good in a one-one relationship, but when you multiply the dimensions, the complexity renders the simplistic scenario unviable as the optimization across the value chain has multiple constraints that operate on each decision point. Even when the collation and decision points can be automated, “complex events” have a way of making decision making a really difficult task requiring human intervention. In the above scenario, if the retailer received hourly information, will it materially impact the quality of decisions or process triggers (like a replenishment)?

The ground reality is that real time information does matter to an enterprise, but the rule cannot be applied for every byte of information. For a nuclear reactor, there is no other way. In case of a manufacturing plant, PLC data is, inventory data is not. Similarly for a financial institution, risk positions can build up quickly unless near real time monitoring exists, but a trial balance can wait for end of day. The application of technology for real time information is a good tool to be judiciously applied, and not get carried away by the use cases presented by the seller of the technology. If you are not doing it, get started, but ask the question at every stage. What changes with real time information?