Procurement is a tough job from any perspective. You have multiple requests at once for some kind of technology investment, which must be run through various channels, negotiated (if at all) and then implemented. We find in many cases that the job is made more difficult by a lack of policies in place. Policies are, in many cases, either not in place, not well implemented, or not being communicated.  Managing procurement with vendors like Microsoft and Oracle, in some cases, will require its own dedicated person within the organization. This function requires somebody with a lot of specialty to keep up with the frequent changes within Oracle.

One easy improvement that can be made within a procurement process is to have a system in place for analyzing software and hardware contracts as they arrive. Standardized processes are also extremely helpful. In the case of companies that are the product of consolidations or mergers, each company will have different processes which are badly in need of consolidation.  It is important to have a real compliance management process with definite policies and enforcement in place. To help with your internal compliance, you need to have some means of doing an internal audit on a relatively frequent basis. If you can’t manage this process internally, outsource it.

With software and hardware vendors, timing is everything in terms of negotiation. With a strict set of policies and procedures in place, your procurement department will be better prepared to respond in a timely fashion and take advantage of quarter and year-end concessions and discounts. Planning and forecasting your needs is also a vital part of this process, but a lack of policy is the most common issue with procurement, a flaw that can end up costing organizations a lot of money.

There has been a flurry of press about China’s Indigenous innovation policy, which will threaten US intellectual property rights. The policy requires companies to develop their intellectual property in China if they want to qualify for preferences under that country’s government procurement program. U.S. companies are concerned that they will lose big, and President Obama has even stepped in to work with Chinese officials to come to some sort of agreement. He also plans to address the piracy taking place against US filmmakers and musicians, which has been happening for many years, with little success by US officials to stop the criminal activity.

Google and GoDaddy have abandoned their business in China due to the government’s strict regulations. Are we going to see more US companies abandoning China? Is the Chinese government pushing foreigners out to allow domestic companies more success? Here is a great piece from CNN about Microsoft’s battle in China. Microsoft has often said that their business in China has brought them tremendous revenue and the growing economy has paid off for the company. The battle was tough but worth it in the end.

While many companies are worried about the increasing regulation and changes brought forward by the Chinese government, the opportunity to invest in a growing economy like China, is too good of an option, and has not stifled their intentions to invest in the county. Like Microsoft, the road may be a bumpy one with many hurdles, but pay off in the end. It will interesting to see if Google put its tails between its legs and goes back to China, and conforms with censorship requested by the Government. Hopefully, President Obama and his team will be able to hash out an agreement that will not prevent foreign companies from investing in China and will also put a damper on piracy.

Software vendors are well aware of the issue, as is the BSA, who has been very busy in China, cracking down on piracy!

Boy, oh, boy! That’s a mouthful. I thought it would be more useful to make a short video out of this topic.

Absolutely hilarious!