I picked up this story from UpperEdge on social media today about the billion dollar law suit between WIPRO and National Grid over a failed SAP implementation, which is well worth taking a few minutes to read.
There was one sentence that jumped off the page for me :
“Shortly after the start of the project, National Grid looked to develop a relationship with a firm to lower cost delivery of the development effort required for the program.”
I wouldn’t begin to suggest that this failure was entirely down to a poor procurement decision, this is a massive, massive, massive programme and I’m sure is a multi faceted complex situation, but I have seen programmes fail where cost saving was the primary objective ahead of business benefit.
In my experience as a former CIO I didn’t buy cheap, I bought affordable, trustworthy, and right for purpose solutions and I made sure I did adequate due diligence on all of my integration partners. Partners being they key word here as they were as important to me as my business was to them and I wanted a long term relationship, not a one time procurement led financial transaction.
Notwithstanding what really happened at National Grid which we will likely never know. I’ve seen the good and the bad side of procurement and things go wrong when the procurement/finance function works in isolation. NO change that to when any business function works in isolation including the IT/Tech function.
What many businesses fail to do is treat IT programmes as business change programmes, and this is often where many costs are underestimated and big mistakes are made. IT programmes have to be driven from a business benefits perspective not a technical perspective and the programme team needs to comprise all key functions of the business (including procurement) and they must all share one common set of goals to deliver a successful outcome.
A good example of this is the much abused term “digital transformation” I.e. many businesses think that changing technology per say is the silver bullet, and that this is the sole responsibility of the IT function. Whereas what it really means is leveraging modern tech to deliver business change that achieves better commercial outcomes. If businesses don’t seek to change their business operations, then changing technology on its own is a waste of time and money.