How CIOs and CPOs Can Embrace Innovation — Together

When her state’s technology department wanted to add $30 million to an existing contract last summer — tripling the project’s budget — Illinois Chief Procurement Officer Ellen Daley had the department pump the brakes.

“If vendors had known that this contract was going to be worth $30 million more, they might have tried to get the business,” Daley says.

Daley forced the state’s IT department to go through a public hearing in which it worked to prove there was a real need to obtain the extra millions of dollars in services from the same vendor covered by the original contract. Ultimately, Daley ruled that the department could only spend the additional money after it had outlined project deliverables and milestones. Furthermore, the department couldn’t extend the contract again without putting the services out to bid.

Making the Most of Taxpayer Money

Daley didn’t call for a public hearing merely to make technology workers jump through hoops. Although she’s sympathetic to the particular challenges of IT procurement — including technologies that sometimes move faster than state procurement laws, and project scopes that can change midstream for valid reasons — it’s her responsibility to make sure that the state gets the most value for its money.

“They were frustrated at first, but they understood that this is what I was going to require them to do,” Daley says. “Once they understood that, they jumped in with both feet and filled out the paperwork and got it done right. The purpose of public procurement is to ensure that we’re getting the best price, and to ensure that everybody has equal access to the taxpayers’ money.”

It’s a dance that plays out in states across the country, with IT departments trying to push ahead quickly with projects, and procurement officers working to make sure proper procedures are followed. When the two priorities come into conflict, so too can CIOs and CPOs.

In fact, a 2015 survey by the National Association of State Chief Information Officers (NASCIO) found that 47 percent of state CIOs had a negative outlook on the IT procurement processes.

“We’re regulators,” says Daley. “When you’re coming up against fast-moving concepts in IT, our priorities can bump up against each other.”

Last summer, with the aim to remedy these clashes, NASCIO and the National Association of State Procurement Officers (NASPO) joined forces for a roundtable discussion in Charlotte, N.C.. The discussion brought together state technology and procurement officials to talk about ways to improve working relationships between the two groups and ease the IT procurement process.

Building Bridges to Improve the Procurement Process

Krista Ferrell, director of strategic programs for NASPO, says that state procurement laws have often failed to keep pace with changes in IT, but that states can avoid many of these problems when procurement and technology offices work together closely.

“Procurement laws have not always been the most modern,” Ferrell acknowledges. “They traditionally were written to acquire goods and services in a very traditional way. Technology is ever-changing and very fluid, so our states have been looking at how to modernize these older procurement laws, allowing for more agile procurement and more flexibility.”

This could mean instituting face-to-face meetings that can help CPOs and CIOs talk out any wrinkles in the process.

“Opening those lines of communication sooner in the process — getting your IT director and your procurement director in the same room — can really help to navigate that process,” Ferrell adds. “There may be things that the procurement officer can do to help.”

It’s important for IT officials to view procurement departments as “partners,” rather than as “roadblocks” standing in their way, says DeLaine Bender, executive director of NASPO.

“Good CIOs engage the CPO right from the get-go,” Bender says. “A good CPO sees the value that the procurement team brings to the table, which might be preventing the CIO from doing something outside the law. Without competition, and without the ability to look at different technologies, you might find that you’re not able to negotiate the best value.”

After the roundtable discussion, NASCIO and NASPO produced a detailed action plan, with a plethora of suggestions for how to improve IT procurement.

According to Ferrell, the most important steps in improving the process include:

• Modernizing procurement laws, while also making clear what existing law allows
• Bringing IT and procurement departments together early on, even when projects are still in the idea phase
• Clarifying governance structures, so that stakeholders in both departments understand who is responsible for each piece of the procurement process.

“All of that increases your probability of success,” Ferrell says.

In Illinois, Daley says challenges remain, but she is working with the state’s technology department to simplify and improve IT procurement by introducing new boilerplate language centered around IT concerns like cybersecurity, for example.

“I work very closely with the CIO,” Daley says. “He’s allowed me to give trainings to people at his department, and he’s allowed his people to come talk to me about ideas.”

Opening the lines of communication doesn’t mean there won’t be conflicts, however, but it can help CIOs and CPOs work through them together.

“I’m still a regulator,” Daley points out. “So I’m not always going to say yes. But we work in concert to understand each other’s needs.”