CIOs and Procurement Pros Partner on Cloud Services

Cloud services can help CIOs free themselves from worrying about managing data centers, scaling capacity, configuring servers, applying security patches and other routine maintenance so they can focus on providing insight to improve the business.

Aren't you tired of being force-fed old, clunky software by the CIO?

That was the not-so-subtle pitch CEO Rob Bernshteyn at Coupa Software made to 800 attendees at the Coupa Inspire 2014 event this week in San Francisco. Coupa, a cloud services provider, offers a host of tools for analytics, reporting, inventory, budget, cloud contracts and supplier visibility aimed at procurement professionals.

"This is our platform," Bernshteyn shouted repeatedly, not some add-on of an on-premises legacy ERP system installed in a bygone era when CIOs in a fiefdom would dictate what software tools business people used.

Ironically, Bernshteyn's keynote was followed by a panel of four CIOs -- CIO Bask Iyer at Juniper Networks, CIO Beth Devin at Silicon Valley Bank, CIO Ross Meyercord at Salesforce, CIO Curtis Miller at Amerinet and director of cooperative technology Dan Rosenbaum at Land O'Lakes -- talking about the benefits of cloud services.

Inspire
From left to right: Dan Rosenbaum, Curtis Miller, Ross Meyercord, Beth Devin and Bask Iyer.

So it came as no surprise that one of the themes emerging from the panel was how CIOs and procurement pros can work closely in a new kind of "partnership," a much-bandied about word describing the new role of CIOs and how they interact with business managers.

Going Around the CIO Is Risky Business

"Getting that relationship fortified is really important," Rosenbaum at Land O'Lakes says.

There's no question cloud services provide an easy on-ramp for business managers to adopt new tools without telling the CIO, and so the danger is that CIOs will be cut out of the loop. Coupa Inspire attendee Rendi Miller, senior manager of travel and procurement at Splunk, says she's inundated with pitches from cloud service providers -- and she needs these new tools to do her job effectively.

"If you're not doing strategic sourcing with online tools, you're not doing sourcing," Miller says.

But doing end-runs around the CIO is risky business for both the business managers and cloud services providers.

Initially, cloud service providers were ecstatic selling directly to business managers rather than getting bogged down with the technical minutia and laundry list of requirements that CIOs demanded.

Now cloud service providers are singing a slightly different tune, lest they run into regulatory and compliance issues down the road and land their business customers in hot water.

"You can get a lot of early business adopters and then they find out, 'Oh my gosh, what did I sign up for?'" says Devin at Silicon Valley Bank.

Case-in-point: Silicon Valley Bank has specific risk mitigation controls in its policies, and auditors will routinely come in to make sure those controls are being followed. One of them requires user acceptance tests on changes before they go into production, followed by executive sign off.

"How do you do that in a cloud environment where you're not in charge of the change?" Devin says. "We're educating some of our cloud partners like Coupa that, hey, we still need to do that so we need advanced warning."

CIOs Get Compliance

In a twist on compliance, CIOs can also help procurement pros navigate the hazards of poor user adoption of a cloud service stemming from compliance rules. CIOs can help ward off problems before business users balk and do things on their own without any regard for compliance.

"Where I see procurement transformations go awry is when we over-rotate to compliance," says Meyercord at Salesforce. "If we focus so much on making sure every box is checked along the way that we make it cumbersome for the users to use, the shadow procurement functions will continue."

[Related: CIOs Destined to Be Kings of Customer Data]

Truth is, CIOs bring much to the table when evaluating and adopting a cloud service offering. They can help with end-to-end process modeling, analytics and data flow, risk management, integration, project management, change management and user testing.

"My inspiration to my team is, how do you become that SaaS consultant?" Devin says.

[Related: CIOs Must Become Technology Consultants]

Cloud services, too, can help CIOs climb the value chain in their companies. CIOs look forward to the day when they no longer have to worry about managing data centers, scaling compute capacity, making sure servers have the same configuration, applying the latest security patches, and other routine maintenance.

Free from mundane tasks, the CIO can focus on ways to really improve the business, namely data analytics. The CIO can unearth mountains of customer data sprawled throughout the enterprise. Coupled with data analytics tools, the CIO can provide valuable insight into, say, a digital customer's buying habits.

"My role now is analytics," says Iyer at Juniper Networks.

The Emergence of the New CIO

Before the role of the new CIO can be realized, however, the IT department must forge a new kind of relationship -- a partnership -- with business managers.

Splunk's Miller says she's seen the IT department make a concerted effort to reach out to business people. Miller meets weekly with the vice president of business apps, vice president of cloud and IT of operations. (Interestingly, Miller says the operations staffer is a challenge to work with, because of his old-school thinking about IT's role, while the more senior IT executives are extremely helpful.)

How does Iyer at Juniper Networks foster a close relationship with the head of procurement and operations? "I drink a lot; he's a buddy of mine because we drink together," Iyer says, jokingly. "More importantly, I have respect for him and he has respect for me. Our goals are aligned."

As Iyer says, a successful partnership isn't always about what the CIO can do for the business manager, but what the business manager, especially a procurement pro, can do for the CIO.

"Every time I hit a budget, the number goes down, and now that I've hit nine or 10 quarters in a row, people think you're Superman," Iyer says. "You're punished when you beat a budget. So the targets I have, which are impossible, I can't hit without Marty."

Tom Kaneshige covers Apple, BYOD and Consumerization of IT for CIO.com. Follow Tom on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn. Email Tom at tkaneshige@cio.com

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