Broadly there are two ways in which cloud computing benefits procurement:
One: By the end of this year my complete infrastructure will be hyper-converged (Nutanix). Basically I will run everything off my private cloud. From an infrastructure procurement perspective it has great benefits to run a completely virtualized infrastructure. My data center is one shared pool of system resources. I don’t have to go through a hardware and software procurement cycle every time we want to install a new system or software. I just keep an eye on my utilization trends and once I go over my utilization threshold, I will procure an additional block of resources and add it to the pool. Not only is my procurement much more predictable, my turnaround time from procurement-to-production is decreased to a fraction of the time.
Two: Procurement itself through cloud-based platforms brings several benefits to us. For one, the intelligence you find on those platforms can generate price-alerts, spending behaviors and other useful analytics that help me improve my procurement behaviors. On the other hand cloud based procurement offers me flexibility to still have approval and reporting capabilities while on the road.
Cloud based procurement offers me flexibility to still have approval and reporting capabilities while on the road
Even more important to me is the integration aspect. Our ERP system that we are implementing (SAP HANA) will be cloud based and we expect to have fully integrated IT procurement workflow.
A quote will generate a PO after approval.
A PO will generate the order for the vendor after approval and shipment will follow.
After shipment an invoice will follow.
After approval this will flow into Accounts Payable.
After approval payments will be made.
This whole process will be fully integrated and cloud based.
Not only does this give me operational efficiencies, it also gives me great analytics about the performance of vendor and our internal departments.
Before implementing such integrated processes cross-company, it is crucial as a CIO to take a step back and collaborate with all involved business leads and agree to the processed, even if it takes multiple iterations (and it will). If you don’t gain the buy-in up from the business up front, it is almost impossible to accomplish a successful and effective implementation.
Evolving Role of a CIO
The role of a CIO has changed quite a bit the past couple of years.
A CIO today is a strategic business partner and is driving innovation and business value on company strategic level. In the past I would be focused on technology and strategic partnerships with specific hardware and software vendors. Today IT technologies are becoming more and more commodity based and the focus of a CIO is no longer on what technologies and skill sets to spend the budget on but more so on what strategic business projects do I spend my time on.
A CIO today is truly a strategic business partner who helps develop the business strategy and is in a lot of cases the driver for innovation and collaboration since he is in most cases the executive who has his hands in all pies. My mandate today is to drive innovation and to improve the group companies’ business strategy.