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What is Federated Enterprise technology Buying

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Federated Enterprise Technology Buying is a method for procuring technology that involves decision-making by individual departments within an organization. This approach acknowledges the requirements of business units and empowers them to select technologies that best fit their objectives.

In a federated buying process, buying decisions are made by representatives across the business. 

Need for Federated Enterprise Technology Buying:

Now, each group in an organization uses technology. We can say that the democratization of technology has happened now. So, while earlier, one central group in the company was responsible for various IT purchases, now every group comes forward and makes IT purchase and funding decisions. 

This also means that while earlier 'technology' purchases were driven mainly for business automation, now 'technology purchase' decisions are linked with business outcomes and business value scenarios. 

Companies solely dependent on a central group for all 'technology purchase & funding decisions' are realizing that the central group has become a bottleneck here. 

With the advent and progress of social media, business intelligence, and customers asking for the availability of the company's products on mobile, a 'federated enterprise technology buying' appears as a better option. 

While there is some merit in funneling all 'technology buying' decisions by a central group, mainly related to standardization, design, implementation, support, maintenance, training, etc., each group within the company asks for its demands and needs to be met. 

So, a delicate balance between standardization, the diverse needs of various groups, scale differences, and operational constraints must be respected.

Landscape of Enterprise Technology purchase: 

Technology is evolving rapidly, and each group within a company needs to craft its strategy to offer a real personalized experience to all stakeholders, be they internal customers, ecosystem partners, or external customers. That means that leaders from all the groups, from production, marketing, HR, operations, sales, support, etc., need to be involved in 'technology purchase' decisions.   

So, while earlier, it was important who was buying, what a group was buying, and why that group was buying, now the HOW part also becomes very important here. That means each group wants to put down the business value scenarios and get involved in the purchasing process. This is to ensure that the 'there is no size fits all' approach is taken and that no suboptimal purchase for its group is made. 

To successfully harness the power of technology's power, all groups must be involved in the enterprise technology buying process. This helps ensure that different groups have their autonomy and achieve agility in business outcomes while also maintaining an efficient overarching process for the company. 

This also means that companies are looking at various vendors while finalizing the needs of their group. Re-composability is vital now. One prominent example of this is re-composable banking. 

Various groups in banks say asset, liability, treasury, wealth, and CRM…are not looking at one vendor for a monolithic solution. They are looking at various vendors and purchasing best-of-the-breed solutions for their groups. 

Fascinating aspects related to "Federated Enterprise Technology Buying" 

1. Empowering Departments through Distributed Decision Making:

Federated Enterprise Technology Buying allows individual departments to actively participate in selecting technology solutions. This decentralized approach empowers departments to choose tailored solutions that meet their needs, promoting agility and responsiveness within the technology ecosystem.

2. Enhancing Innovation with Adaptive Technology Ecosystems:

The federated model encourages the creation of adaptive technology ecosystems within organizations. This approach fosters innovation by enabling departments to explore cutting-edge solutions aligned with their objectives, ultimately contributing to organizational advancement.

3. Balancing Autonomy and Governance for Strategic Alignment:

One intriguing aspect is the balance between autonomy and governance. Federated Enterprise Technology Buying provides departments autonomy in making technology decisions while establishing governance frameworks aligning with the organization's goals.

Federated Enterprise Technology Buying represents a departure from centralized approaches in technology procurement, showcasing decentralized excellence in acquiring technology solutions.

This approach involves delegating decision-making authority to departments within an organization, enabling each unit to participate in selecting and implementing technology solutions.

Background of Federated Enterprise Technology Buying:

The origins of Federated Enterprise Technology Buying can be traced back to the increasing complexities of business operations. The traditional top-down approach to technology procurement faced difficulties in meeting the evolving needs of individual departments. 

Significant milestones include : 

 1. Decentralization Trends in Business Operations:

During the initial part of this century, there was a shift towards decentralized business models as organizations started recognizing the benefits of empowering individual departments to make decisions that directly impacted their operations. This trend paved the way for a transformation in technology procurement.

2. Expansion of Departmental Technologies:

As technology became essential for business functions, individual departments began adopting solutions to their specific requirements. This expansion highlighted the necessity for a department-focused approach to acquiring technology.

3. Rise of Cloud Computing and SaaS:

The emergence of cloud computing and Software as a Service (SaaS) played a crucial role in shaping Federated Enterprise Technology Buying. These technologies offered accessible solutions that departments could quickly adopt and manage, reducing reliance on centralized IT structures.

4. Acknowledgment of Departmental Autonomy: Organizations have recognized the importance of allowing departments to make technology decisions. This autonomy promotes innovation and responsiveness, enabling technology solutions to better align with each department's needs and goals.

Key Features of Federated Enterprise Technology Buying:

 1. Decentralized Decision Making: One important feature is the decentralization of decision-making, granting departments the autonomy to select and implement technology solutions tailored to their needs.

In this approach, decision-making authority is distributed among departments, allowing them to independently assess their technology needs and select solutions that align with their goals. This decentralized method enables decision cycles and greater adaptability.

2. Governance Frameworks: While departments enjoy autonomy, Federated Enterprise Technology Buying incorporates governance frameworks that maintain alignment. These frameworks establish guidelines, standards, and integration requirements, ensuring coherence across the technology ecosystem.

3. Collaborative Evaluation:

The federated model promotes collaboration in technology evaluation. Departments can share insights, best practices, and lessons from adopting technologies. This collaborative approach fosters a culture of improvement and knowledge sharing.

4. Adaptive Technology Ecosystems: 

Federated Enterprise Technology Buying facilitates the development of adaptive technology ecosystems within organizations. Different departments can explore and adopt technologies that best suit their needs. They can share insights and best practices, fostering a culture of knowledge sharing and continuous improvement in technology adoption.

This approach results in innovation and agility.

5. Centralized Oversight and Integration:

While granting autonomy to departments, centralized oversight ensures a strategy. It involves managing integration points, guaranteeing data security, and overseeing technology governance to prevent fragmentation and ensure interoperability.

Use Cases of Federated Enterprise Technology Buying:

 1. Marketing Department Selects Customer Relationship Management Software: 

A company's marketing department can select a CRM solution that aligns with its customer engagement goals. This choice allows marketing professionals to enhance campaign management and improve customer interactions.

The Human Resources department independently implements a cloud-based talent management system, recognizing the importance of having tools for recruitment, employee development, and performance management.

To streamline its processes, the sales department adopted a sales automation platform. This decision helps improve the efficiency of sales operations by making it easier to manage leads, track sales activities, and engage with customers.

The approach of Federated Enterprise Technology Buying is seen as both thoughtful and adaptable. It acknowledges the needs of departments within an organization. Over time, this methodology has evolved as businesses have realized the benefits of allowing departments to make decisions in technology procurement.

As organizations navigate through technology acquisition, Federated Enterprise Technology Buying provides a framework that balances autonomy and governance. This model empowers departments to choose technologies that align with their objectives while ensuring connectivity and integration within the technology ecosystem.

Federated Enterprise Technology Buying represents a shift in how organizations approach technology procurement. It brings about innovation, agility, and strategic alignment. By embracing this model, businesses can navigate the changing technology landscape with responsiveness and resilience to ensure their technology investments meet the evolving needs of their organization.

Features and Advantages of Federated Enterprise Technology Buying: A Approach to Tech Procurement

Federated Enterprise Technology Buying offers a range of features and advantages, making it a strategic and innovative approach to technology procurement within organizations. Understanding these elements is crucial for businesses that promote adaptability, autonomy, and efficiency in their tech acquisition processes.

Advantages of Federated Enterprise Technology Buying:

1. Increased Adaptability:

The decentralized nature of this approach enhances adaptability by enabling departments to respond to their specific technology needs. This agility is crucial for staying responsive to evolving business requirements.

2. Enhanced Innovation:

Federated Enterprise Technology Buying promotes innovation by empowering departments to explore and adopt cutting-edge solutions. This department-centric approach encourages identifying and implementing technologies that drive innovation within each business unit.

3. Tailoring for Department Specific Needs:

The autonomy granted to departments allows them to select technologies precisely aligned with their goals and requirements. As a result, tailored solutions enhance efficiency and effectiveness within each department.

4. Improved Collaboration:

Collaborative evaluation and knowledge sharing across departments contribute significantly to improved collaboration. Departments can learn from each other's experiences, leading to technology decisions while fostering a collaborative culture.

Relevant Technologies in Federated Enterprise Technology Buying :

1. Cloud Computing:

Cloud computing is critical because it allows access to computing resources. By using cloud services, different departments can work independently.

Manage applications without relying much on infrastructure. This does not provide flexibility. It also enables the adoption of scalable and cost-effective solutions that meet the specific needs of each department.

2. Service Mesh and Gateway: 

Interoperability, streamlining processes across organizations, and data exchange are now vital drivers. In that context, The Enterprise Service Bus (ESB) or equivalent 

facilitates communication and data exchange between systems. In the context of purchasing technology for enterprises, ESB or equivalent can be used to ensure integration and communication among technologies used by departments. This promotes interoperability, streamlines processes across the organization, and facilitates data exchange.

3. XAAS: Anything as a service. The most important thing that has helped the 'Federated Enterprise Technology Buying' is the ability to purchase various capabilities as a service. Multiple groups are exploring services with different vendors as this converts CAPEX into OPEX. This helps in getting the best of the best-of-the-breed solution without sinking excessive capital at the start.  

As organizations embrace purchasing technology, it becomes essential for enterprises to integrate these technologies to create a landscape that aligns with the principles of decentralization and autonomy.

These technologies work together to contribute to the success of the federated model by facilitating communication, ensuring security, and providing flexibility across departments' technologies.

Industries Utilizing Federated Enterprise Technology Procurement:

1. Healthcare:

In the healthcare industry, Federated Enterprise Technology Procurement enables departments such as patient care, administration, and research to adopt technologies tailored to their unique needs. This approach enhances the efficiency and effectiveness of healthcare operations

2. Finance:

Financial institutions utilize Federated Enterprise Technology Buying to empower business units, such as banking, risk management, and compliance, in selecting technologies that best match their needs.

This flexibility enables organizations to drive innovation and adapt to the changing dynamics of the market.

Re-composable banking is the need of the hour now. While at one hand, it helps the banks in selecting 'best-of-the-breed' solution, it also helps them in replacing older monolitic products,solution in a gradual manner. 

No bank can risk its IT system going down. Federated Enterprise Technology's purchase and gradual implementation help the banks ensure that almost all of their business functions are working as needed and that the replacement of old redundancies happens smoothly. 


In the manufacturing sector, Federated Enterprise Technology Buying plays a role in facilitating the adoption of technologies across departments, including production, supply chain operations, and quality control. By adopting this approach, manufacturers enhance their agility and responsiveness in the evolving manufacturing landscape.


To sum up, Federated Enterprise Technology Buying is a strategic and adaptable approach to technology procurement that effectively addresses the diverse needs of modern organizations.

The decentralized decision-making process and defined governance frameworks foster increased adaptability, innovation, and collaboration.

Companies like Microsoft, IBM, and Salesforce demonstrate how embracing a federated model allows organizations to tailor technology solutions to meet requirements while ensuring overall integration and strategic alignment.

In industries such as healthcare, finance, and manufacturing, Federated Enterprise Technology Buying emerges as a catalyst for efficiency and innovation.


The evolution of technology procurement methodologies mirrors the shift towards agile business models. Federated Enterprise Technology Buying is more than a reaction to the obstacles businesses face; it's a proactive approach to making the most of technology. By embracing this strategy, organizations can effectively navigate the complexities of the age. This ensures their technology investments align with each department's goals and needs within the broader enterprise.




This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.

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