June 2002
Volume 4 • Number 3

Contents

PROJECT MANAGEMENT
Successful Information Technology Procurement
By Alec Dorling, QAI Europe

Considerable effort has been invested by many organizations, both government and commercial, in defining procurement guidelines and methodologies. Consistently successful information technology (IT) procurement processes, however, are still difficult to achieve for most organizations. Whilst IT procurement improvement is a relatively new discipline, there are new tools available to assist organizations that want to obtain better value from their IT procurements and supporting activities. This article will look at recent empirical studies of procurement projects performed across Europe and will deliver the results of a European IT procurement benchmarking activity.

Key words: acquisition, assessment, benchmarking, performance measurement, procurement, project metrics, recommended practices, success factors

INTRODUCTION

Information technology (IT) provides a vital function in nearly every organization today. Whether commercially focused or publicly funded, the amount of money being spent on IT continues to increase both in real value as well as percentage of total expenditures. At the same time organizations are under increasing pressure to streamline operations and reduce costs as markets encourage greater competition, and public expenditure is being trimmed and more closely scrutinized.

Organizations need effective tools that allow them to properly manage their IT investments. The decisions surrounding the procurement of a new IT system can fundamentally affect the success and value a new system provides, and there are several guides and methodologies available to assist European organizations in making better procurement decisions. These range from executive guides describing procurement strategy and management principles, to detailed methodologies, which dictate specific actions to be followed at each phase of procurement.

Organizations wishing to make use of these guides and methodologies are often faced with difficult questions:

• Should they make dramatic changes to their procurement procedures in order to adopt one of the recommended procurement methodologies?
  
• Which of the recommended actions should they focus on if they want to address a specific concern?
  
• Do the recommended actions make a measurable difference in the results achieved?

To answer these questions and others like it a project was established, with the financial support of the European Commission’s SPRITE-S(2) Program to identify which of the myriad recommendations made by the various procurement guides and methodologies actually have an impact on the success of an IT implementation, and more important, to identify the specific type of impact associated with each recommendation.

The project approach was to study actual procurements conducted by European organizations. Specific recommendations or proposed “best practices” made by 14 of the most popular procurement guides and methods were analyzed and their impact was measured. The results of these studies are presented in a best practice guidebook (The Open Group 1999) in a format that allows organizations to identify actions and improvements specific to their needs and situations. While it is clear that none of today’s guides or methods can completely address the challenges of IT procurement, the best practice guidebook brings together the best recommendations available and shows what really works.

This guidebook is based on empirical studies of actual procurement projects conducted across Europe. The studies first involved the assessment of the procurement best practices being followed by a sample of organizations, followed by the collection of metrics to measure procurement project results. The relationship between these two data sets was then analyzed to identify the procurement practices associated with improvements in specific project results.

The full text of this article may be found in the print journal. To subscibe go to /quality-press/display-item/index.html?item=SUBSCR_SQP.

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