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CIO Insight Business Journal

IT, Supply Partnership Reveals Hidden Costs

June 5, 2009 | 01:10 p.m. CDT

Claiming most CIOs are "operating in survival mode" given today's down economy, CIO Insight recently praised Lynden Tennison and Joe O'Connor's strategic partnership that allows Union Pacific to maximize its vendor relationships.

In a recent interview with the award-winning business journal, Tennison, senior vice president-Information Technologies (IT), says IT's relationship with O'Connor, vice president-Supply, and the Supply Department took years to perfect, but the work has paid off.

"They've helped us to really understand the full picture of what we're trying to procure," Tennison said. "You might think you were buying the lowest-cost alternative, but often you would end up. . . having hidden costs inside your organization that would change that whole equation."

According to CIO Insight, to get the most out of vendor relationships, it helps to turn to experts for advice. Although most IT staffs might know the ins and outs of the technology or skill they are seeking, they are often less knowledgeable about the intricacies of negotiation, contract review and the like.

Additionally, Supply and IT's relationship has challenged IT's existing buying assumptions and offered it a system for classifying purchases that help define rules of engagement with a vendor.

See The Art After the Deal to read Tennison's full interview.

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