1 Reply Latest reply on Mar 8, 2010 10:30 AM by John Lark

    Help Defining a Global IT Procurement Organization

    Steve Ottavelli Newbie

      Hello,

       

      This is my first post on this site.

       

      I have a new CIO, and he wants me to come up with a presentation on what my role could/should be going forward, with a focus on providing IT financial reporting and prcurement for IT globally.

       

      Currently I manage our USA IT purchasing, contracts and billing functions (along with a few other things).  I've done some things that applied globally, but need to gorw this area, particularly in the area of reporting on OpEx and CapEx spending globally.

       

      At his former employer, our CIO was able to see graphs, charts, and reports on various budget and IT items, and he would like something similiar from me, but we don't currently have a process or tool in place to generate these reports.  We may go to a new ERP solution (such as SAP or Oracle soon), so perhaps that will help with some of these issues.

       

      The CIO's idea is for me to put together a short presentation to see if it aligns with his ideas, and then later address anything that I currently do that isn't part of the new plan.

       

      If you had any information/tips/leads/examples that would help me put something together, I would greatly appreciate it.

       

      Sample global org charts with high level tasks involved would be ideal.  Also, information on best practices for global IT procurement/financial management could be very helpful.

       

      Thanks so much in advance for any assistance,

      Steve

      steve.ottavelli@univarusa.com

        • Re: Help Defining a Global IT Procurement Organization
          John Lark Novice

          Steve,

          This sounds like a great opportunity for you to establish yourself as a real thought leader within the organization.  Clearly, while he is looking for reports on performance, there seems to be a chance for you to prove even greater value from your role.  So, let me answer in 2 parts.

           

          Part 1, how to generate spending reports:

          Three different strategies exist around this, that I'll briefly mention are:

          1) Export data and use excel or other db analysis tool to manually "grind" through it.  This tends to be very time consuming and minimally flexible, plus may be completely impractical depending on the amount of data.  While this may be the lowest capital outlay, it's really a "one time" solution.

          2) Wait for / develop the reports in your ERP.  This may have some benefits long term, depending on the structure and strategy, but will typically take a long time to develop and get right, so it could be months to years before you get good data.

          3) Look to an external analysis solution (Ariba does have Spend Visibility) that can be used to port the existing data and has a number of really good analysis reports "out of the box."

           

          On the second part, the comment of "see if it aligns with his idea" raises some flags to me.  Today the typical IT organization spends much of it's time deploying software, maintaining it, and keeping the whole infrastructure running.  In other words, it's a very tactical group.  However, we're seeing a trend among the thought leadership organizations, that IT needs to elevate it's value to becoming a strategic part of the company.  I wonder if this is something he's hinting at in his statement?

           

          If that is the case, what I'm seeing from leading companies like Facebook and JetBlue is that they're recongizing the difference between the static and dynamic parts of the technical community.  They're recognizing that the GL is relatively static (one CFO stated, "we put that ERP in place and I have no intention of doing any changes to it for 10 years."  However, this causes problems when you try to put all of the dynamic business processes (like sourcing, contracts, procurement, AP, etc) into the same system.  As you can imagine, dynamic processes on a static system = LOTS of IT maintenance.

           

          In contrast, the leading companies are separating the 2 and using much more dynamic systems to support the dynamic part of the business, and leaving the ERP as the core "backbone" for the GL.  Typically they're looking to SaaS solutions for for the dynamic pieces, and keeping in mind the need to tie all the dynamic pieces together with as little maintenance as possible.  This also takes issues such as upgrades, expansions, rule and approval management, supplier support, catalog support, to the SaaS supplier and network, effectively "outsourcing" this and leaving IT in a position to give much more strategic guidance.

           

          Hopefully this gives you some ideas for your response and maybe even some ways to set yourself as a thought leader in your new boss's eyes.  If you want more info on any of these things feel free to reach out to me.

           

          John

          JLark@Ariba.com