These two distinct roles within a company require unique sets of talents, personalities, and skills. However, a growing trend is emerging where these roles are converging, not only in small and medium-sized businesses but also in many large companies.
Individuals drawn to the world of technology, whether through their education or career, are often motivated by the thrill of innovation and the understanding that no company or organization can progress and succeed without effective technology management. The constant drive for innovation necessitates regular updates and security measures for technology systems, resulting in critical business responsibilities that are increasingly falling under the purview of technology leadership.
These responsibilities can encompass evaluating the cost structures of services within the current market or comparing existing vendors with competitors to ensure optimal service at the best possible cost. In large organizations, such tasks are handled by procurement departments leaving small and medium-sized firms without this luxury. To take on a procurement role, a technologist must now acquire new business and interpersonal skills essential for collaborating with vendors, engaging in price negotiations, reviewing legal documents, and devising vendor selection and procurement strategies. This results in a significant drain on time, ultimately detracting from the core responsibility of establishing and upholding a company’s infrastructure.
From my experience, when a technologist is thrust into this hybrid role, several outcomes tend to emerge. First and foremost, their focus shifts away from technology development. This shift can become costly for a company, especially in a highly competitive market where skilled technology personnel are in high demand. Secondly, while technologists possess expertise in technology, they may not necessarily excel as procurement specialists. Effective procurement demands specific skills, as previously mentioned, and if a technologist falls short in this role, it could adversely impact the company’s bottom line. Poor procurement decisions might lead to subpar quality, service losses, and customer attrition. Additionally, there’s the potential cost of prematurely discarding underperforming hardware or services, necessitating new acquisitions to stay current.
A notable example Illustrates this situation. Years ago, a friend working as the Technology budget holder for a financial institution needed to secure data center services in the Asia-Pacific region. Although well-versed in the data center landscape due to prior new builds and collaborations with U.S.-based data center companies, the APAC market presented a new challenge. Assuming his familiarity with U.S. data centers would suffice, he embarked on the task. However, due to language barriers and time zone disparities, he spent eight weeks just identifying and finding proper engagement with the local data centers. Interviewing and narrowing down potential candidates to three data centers took another 8 weeks. Then 4 additional weeks passed before he selected what he believed to be the best provider at the best price, signing a long-term contract.
Regrettably, his primary focus on core technology caused him to overlook certain details. Specifically, he failed to consider the significantly higher cost of internet access in APAC compared to the U.S. market which inflated his total solution cost. One of the alternative data centers he had considered was slightly pricier for colocation, but it offered access to over 200 ISPs which would have ultimately reduced his total solution cost by over $500,000.
Would a dedicated procurement specialist have detected this oversight? The answer is yours to determine. Rather than rushing to hire a procurement specialist, explore your internal talent pool for employees with purchasing experience and lean on their expertise. Alternatively, consider partnering with a vendor-neutral advisor—like UPSTACK—who will help navigate specific challenges, present opportunities for reductions in costs and complexities while making outcomes more predictable, improving speed to market, and mitigating business risks.