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Time to call in the experts
The day the Bellamy Report came out, I brought an extra-large coffee to work. Figured I would need it to plod through a dreary tome written in the language of the high courts. Was I ever wrong. Just one page into it and my eyes were wider then an owl’s.
The report on the Toronto Computer Leasing Inquiry is 131 pages long, but it reads like a spicy novel—plain language, drama and intrigue, villains, idiots and liars.
City of Toronto employees and officials were condemned for having affairs with the wrong people, allowing themselves to be devoured by corporate vultures, and even worse, arranging sordid little meetings in underground parking lots to collect thousands of dollars in cash bribes.
By now, most Canadian purchasers know the story. A few years back, City Council approved a three-year lease for computer equipment, worth $43 million. Through interference from corrupt politicians and inept directors, the total spend ballooned to nearly $100 million, without Council approval.
The report calls a spade a spade. It’s not sanitized. It doesn’t try to spare any reputations. It’s an account of what happened, but it’s more than just a narrative. Much of the document is imbued with the author’s sense of frustration and outrage, making it all the more compelling.
It also sheds light on why the fiasco happened, and the reason will ring familiar. Purchasing departments buy stuff, yes. But they may not truly understand what they’re buying. In the case of the City of Toronto, the IT department unwisely decided on an open-ended lease for computers, then drafted incorrect bid documents. Relying on the wisdom of IT, and ill-informed about the backroom deals, the purchasing department allowed the contract to go through.
It all comes down to “subject matter expertise.” As we move toward centralized purchasing, there’s a fear of losing the technical input from the departments which actually use the products. It’s a valid concern. But clearly, the status quo isn’t working either. We’ve got IT and production managers happily writing their own shopping lists, and muddling their way through complex tendering processes—without proper guidance from the purchasing people.
It’s a bit like shopping for an MP3 player with a teenager. He tells you the $500 choice is the best value for money, the most useful, the most feature-rich. You gently suggest the $150 model, and the kid shoots you a look that clearly says “techno dork!” before launching into a tirade about upgradeable memory slots and FM recorders.
He may know his stuff, but he has an emotional attachment to the expensive model, and may not be as concerned as the parent over budgets, value, and pricing comparisons.
On a larger scale, that’s exactly how most purchasing is conducted today. But the trend is starting to shift. Companies are beginning to hire purchasers who are “subject matter experts” or “category leaders.” From previous experience or careers, these purchasers are well versed in fields such as IT and operations, giving them more credibility, and confidence, when dealing with requests from the various departments.
Madam Justice Bellamy suggests a spate of other improvements, which public and private organizations will undoubtedly adopt in the months to come. She also points out the numerous efforts the City has already made to remedy its procurement woes.
With the impact it’s having on the profession, it would be wise to become familiar with the report sooner rather than later. Go get a coffee (a small one) and enjoy the read at http://www.toronto.ca/inquiry.
Lisa Wichmann
Editor
We welcome your comments. Contact the editor at lisa.wichmann@pb2b.rogers.com
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