Murky world

Putting in place an effective IT procurement policy may not be the most scintillating task ever faced by a CIO, but it is one that organisations in the Middle East need to pay increased attention to. Procurement policy remains a murky world in this region with a range of factors — including some that may not actually have the organisation’s best interests at heart — influencing the final decision.

  • E-Mail
By  Stuart Wilson Published  January 15, 2007

|~||~||~|Putting in place an effective IT procurement policy may not be the most scintillating task ever faced by a CIO, but it is one that organisations in the Middle East need to pay increased attention to. Procurement policy remains a murky world in this region with a range of factors — including some that may not actually have the organisation’s best interests at heart — influencing the final decision.

It shouldn’t be an arduous task. Work out the company’s IT requirements — be it hardware, software or services — put out the RFP, set a clear timeline and wait for the suppliers to come back with an offer. Analyse the bids, test the solutions on offer, maybe ask for a trial or a demonstration, and then make the final decision based on an impartial analysis of the results. It sounds like a relatively straightforward, simple and painless process.

Well, let’s cut to the chase here and admit that the reality is very different. Even in mature markets such as Western Europe and the USA, the procurement policies of large organisations and public sector bodies are under intense scrutiny. From RFPs that are so detailed that they preclude all but a couple of suppliers from bidding, to the influence of personal relationships on the final decisions, procurement is never a straightforward process.

There’s no reason to believe that the Middle East market is any different. In fact, given the limited level of business transparency that exists in this region and the shroud of secrecy that frequently surrounds the purchasing decision, you can bet your bottom dollar that there’s some real fun and games going on behind the scenes.

For every vendor willing to talk up a customer win and a successful implementation, there are usually several rival suppliers that failed to make the grade. One of the most interesting questions to ask the end user is not why they picked one particular supplier, but rather why they rejected several others and their reasons for giving these bidders the cold shoulder.

For the Middle East enterprise IT sector to really move forwards, the market needs to start a dialogue on the pros and cons of the various vendors working in specific sectors. To date, the market has concentrated on the pros of the vendors that win specific large projects, with the end users in question queuing up to sing their praises.

That’s all well and good, but the real intrigue lies in an understanding of the rationale behind the supplier choice and also the level of customer satisfaction with the project outcome. A CIO or IT manager who has spent several million dollars on a significant software purchase is going to laud their choice of supplier, explaining why they made the right decision and outlining the technical supremacy of the solution.

They are not going to say that they have had second thoughts; that in hindsight they wished they had selected a rival product and that the implementation was shoddy and the support was non-existent. After all, the CEO might be listening and admitting to an expensive procurement mistake could be career suicide for a CIO or IT manager.

This is why, when it comes to IT procurement, the devil is in the detail. Too many purchasing decisions in the Middle East are based on a supplier’s image rather than the technical advantages of the solution they offer. There are companies out there that have spent millions of dollars on the latest and greatest IT solutions only to rip them out six months later and embark on a search for a new supplier that actually meets their needs — it happens, believe me.

If they can afford to do this, that’s not a problem. However, as Middle East organisations strive for ever greater efficiency and business transparency, these expensive purchasing mistakes can no longer be swept under the corporate carpet. They will come back to haunt the IT managers and CIOs that signed off the purchase order. If your IT procurement policy is flawed, you are putting yourself in a vulnerable position.

Is corporate IT procurement in the Middle East a fair, systematic, transparent and ethical process? You tell me...

E-mail your views to stuart.wilson@itp.com and look out for our feature on Middle East IT procurement policy in February’s ACN. ||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code