JUNE, 202319 CollaborationIn considering the procurement of technology solutions in particular, Procurement is just one of several key stakeholders that play an active role. In addition to the engagement owner, we collaborate with members of our Enterprise Architecture team from the point of ideation, with participation from our Information Security, Risk, Compliance, Project, and Legal teams, among others, as the procurement process advances. We each recognize that relationships get results. Each stakeholder group provides subject matter expertise that contributes to an informed due diligence review in selecting a third party and their solution. The input and recommendations of these groups contribute to the quantitative and qualitative aspects we may evaluate, and the terms and conditions we may seek in a resulting agreement.Third-Party Risk ManagementAs we see more solutions delivered as a service, further emphasis is placed on systems security, data protection, business continuity, and risk mitigation. Apply due diligence to the process of vetting new third parties and solutions is essential, and in our highly regulated environment, an absolute must. Our Procurement function has been an active proponent of proactive risk management and focused risk mitigation. Our organization leverages the Institute of Internal Auditor's Three Lines Model for governance and risk management. Procurement is a part of the first line of defence in the sourcing and selection of solutions for both internal and client-facing use. From the point of selection, determination of an inherent risk rating guides the engagement of a multi-disciplinary team of subject matter experts to conduct applicable due diligence reviews. The supplier or service provider as well as their proposed solution are assessed for elements or risk and opportunities for mitigation. Where considering the solution as outsourcing, further emphasis is placed on potential risks or impacts to the business. Ongoing monitoring of the third party and their solution from contract execution through termination is also important.Efficiency and Cost ManagementCost is always a foundational consideration. When Procurement thinks about cost, we are most interested in understanding total cost of ownership over the projected life of a proposed solution. We want to clarify added costs and understand hidden costs, such as hosting and storage capacity, scaling, hardware, maintenance and support, business continuity and disaster recovery, reporting, data transfer or retrieval, environmental, and transition or exit from the solution in future. We want to understand the product roadmap, with assurance that the solution delivered today will continue to scale and evolve with future needs of the organization. We want to understand if a solution involves an implementation partner, what if any integrations may be needed, what methods may be used, and what costs are associated. Time and resourcing for design, implementation, training, and use through the life of the solution all translate into cost and aspects of the Procurement that we must also considered.Although Procurement has inherent interest in cost optimization, we also work to ensure that desired business, functional and technical capabilities are met. We recognize that considerations like sustainability, green solutions, and supplier diversity, are aspects of a solution that may come with added cost or savings, yet inclusion has power and purpose. A formulated balance of cost and quality are needed to ensure a best value solution. Just how much emphasis is put into each is proportionate to the complexity or criticality of the desired solution and potential risks associated.To the engagement owner, Procurement working in collaboration with internal stakeholders to deliver a seamless process and positive outcome is of utmost importance. WHETHER IT IS TO DEVELOP STRATEGY, CONDUCT MARKET RESEARCH OR SOURCING, NEGOTIATIONS AND CONTRACTING, OR VENDOR MANAGEMENT, OR CONTRIBUTING TO DUE DILIGENCE REVIEW, RISK MITIGATION, OR COMPLIANCE, PROCUREMENT PROFESSIONALS BRING A UNIQUE SKILL SET TO THE TABLEPROCUREMENT TEAMS WILL PRIORITISE DIGITIZATION, SUSTAINABILITY, STRATEGIC SOURCING, VENDOR PARTNERSHIPS, AND VENDOR RISK MANAGEMENT DURING 2023.QUICK BYTES
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