Ultimate Guide to IT Procurement
A guide to IT procurement for navigating the complex IT sourcing process in a way that drives organizational efficiencies and improves your bottom line.
Comprehensive Guide to IT Procurement
Procurement embodies purchasing across a wide range of categories. Depending on the way your procurement function is set up, you may be sourcing everything from the direct materials that make up your organization’s main product, down to the goods and services needed to keep office supplies in stock and the buildings maintained appropriately.
The procurement process involves strategy, research, negotiation, and implementation to ensure your company is running efficiently and cost-effectively. These factors are especially crucial when it comes to procuring the right technology solutions for your business.
IT procurement can quickly become overwhelming and cumbersome due to the sheer volume of tech vendors and IT solutions available for any given task or function.
This guide to IT procurement is designed to help you navigate the often complex process of searching for and comparing different technology providers, negotiating contracts and pricing, and implementing the right IT tools to drive productivity and efficiency without sacrificing your organization’s bottom line.
Take a peek at what you’ll find:
In This Guide:
What is IT Procurement?
IT Procurement is the process of researching, selecting, and implementing all of the technology solutions your organization needs to function. This includes everything from telephone lines, internet service providers and email capabilities, to cybersecurity, cloud services, software, and more.
The number of tech contracts and IT vendors that are needed to support your business can add up quickly, which can make this particular category difficult to manage.
Utilizing the right resources to efficiently manage this category of spend, along with all of the IT tools and software programs used by your organization on a daily basis, is key to ensuring you have the right solutions in place. It will also help you be successful and make sure you’re getting the most value from your IT spending.
Who Owns IT Procurement?
Thanks to a global pandemic and the evolution of the way organizations conduct business around the world, there’s been a renewed focus on investing in the right technology tools to ensure business continuity and resilience. IT spending is expected to reach $4.4 trillion by the end of 2022 and is oftentimes within the top three largest spend categories for an organization.
It’s not a matter of if IT spend should be managed, but who should be the one managing such a significant portion of a company’s budget.
Naturally, a CIO may deem that any technology purchase falls within the realm of responsibility of the IT department as they are the true technology experts. As such, IT seems poised to take care of the entire IT procurement process, from identifying the technology needs of the organization and selecting which vendors to work with, to negotiating contracts and pricing, purchasing, implementation, renewals and support.
Procurement, however, makes a strong case for managing IT purchasing because sourcing professionals are the experts when it comes to managing and reducing costs, implementing best practices, and mitigating risk throughout the buying process.
Salesforce found that 86% of employees and executives cite lack of collaboration or ineffective communication for workplace failures so one thing is clear: improving the collaboration between the procurement and IT functions is crucial for all-around success.
How Procurement & IT Can Work Together
When procurement and IT work together to fully understand each other’s goals, concerns, and pain points – and those of the organization as a whole – the entire IT procurement process is apt to run smoothly.
Here are a few ways procurement professionals can proactively collaborate with their IT counterparts:
Understand goal & priorities
Focus on data
Be the liaison between different teams
Learn how each product will be used
Speak the IT language
Set expectations early and often
Challenges Associated with IT Procurement
While a collaborative effort between the sourcing and IT teams should be made to manage IT spend and procurement, several other factors come into play when trying to get a grasp on this complex category.
Technology is ever-changing – and at a rapid rate. What could be considered the top product today could very well be outdated come tomorrow. It’s impossible to have the most current or newest application implemented at all times. Even if you are trying to install a new tech solution, there are oftentimes conflicts with legacy programs or other incompatibilities that prevent it from working properly.
Lack of visibility into spend and contract data also contribute to the difficulty of managing IT spend. Contracts that are set to auto-renew are often forgotten and price increases aren’t addressed because there isn’t an easy way to compare other options in the marketplace. Wasteful IT spending is another challenge. It’s estimated that companies spend 25% more than they have to on things like cloud storage because app modifications have been neglected once integration has taken place.
Overcome these challenges by taking inventory of your current IT solutions, collecting clean spend data, and understanding how all of the tech components work together at the beginning of the IT procurement process. Also, bring in the appropriate colleagues from other departments to help compile the information you need, whether it’s operations, finance and accounting, or sales, so you’re armed with data you need before making IT purchasing decisions.
IT Procurement Best Practices
As you begin to navigate this category, some of the same strategic sourcing best practices can be used as a guide to IT procurement as well. Thinking strategically involves planning for the long-term, making decisions based on data and the overall goals of the organization, building strong relationships, and more.
Here are some best practices to keep in mind when going through the IT procurement process:
Think
Long-Term
Thinking long term allows your IT investments to proactively set your organization up for success, create long-term value, and helps develop a competitive advantage.
Align with Business Goals
Likewise, procurement must become familiar with future IT architecture and plan ahead to align with this.
Data Driven Decision Making
It might also pinpoint technology gaps and allow you to plan for future IT purchases.
Nurture Vendor Relationships
Minimize
Risk
Be weary of the risk of receiving little value for your large IT spend due to a perceived lack of solutions and the high cost of enterprise tools.
Look Beyond Cost
Lowest-cost vendors or solutions may end up costing the organization more over the product lifespan. Factor in ongoing system support, updates or upgrades, too.
Implementing an Effective IT Procurement Process
When it comes time to sourcing IT solutions for your business, here are some basic steps you can follow to ensure you’re taking the time to correctly analyze your business needs and implementing the right tools in order to be successful.
Keep in mind that you may not need to follow every step every time you make an IT purchase, but this general progression will help you focus on promoting and implementing an efficient process that aims to improve your overall bottom line.
Determine Business Needs
Complete a Market Analysis
Compile Supplier List
Produce Tender Documents
Begin RFI, RFQ, or RFP Process
Negotiate & Award Contract
Finalize Purchase Order
Process and Complete Payment
Integrate and Implement
Review IT Contract & KPIs
Your Personal Guide to IT Procurement
The IT procurement process can be complex and difficult to manage so why do it alone? IT and procurement departments are notoriously understaffed and under-equipped to handle all areas of spend. As a group purchasing organization, or GPO, Una becomes an instant extension of your procurement team, offering industry insight, category expertise, contract management, and more. The Una team can even apply these skills to the IT category thanks to our IT spend solutions and vendor management platform.
As a procurement or IT professional, partnering with a GPO is a great way for you to continue delivering value in terms of cost savings, increased spend visibility, deeper category knowledge, and more. Una members have free access to an entire collection of technology vendors offering unprecedented savings on all of your IT needs.
Members can also access a state-of-the-art data insights platform designed to help guide you through the IT procurement process. Identify technology savings, centralize your technology spend, and manage tech contracts within a single dashboard to prevent auto-renewals and overcharges from impacting your bottom line.
Una GPO Membership Details
Unfamiliar with how a GPO works or trying to decide if a GPO is right for you? Una has an entire resource center dedicated to helping sourcing (and IT) professionals understand where a GPO fits in regards to your overall approach to procurement.
The most important thing to remember is that not all group purchasing organizations operate in the same way when it comes to membership. Some charge membership fees or require a certain volume when purchasing so it’s important to understand all of the details before joining.
With Una, here’s what you can expect:
Always Free Membership
At Una, our pricing structure is set up so membership is always free to join and free to use, no matter what.
We use supplier administrative fees to finance our services, allowing us to make and keep membership free for members.
No Membership Exclusivities
Una does not require members to purchase from certain suppliers or commit to a specified purchase volume.
You are free to pick and choose the suppliers that will best suit your needs, remaining in control of all spend categories.
Speed to Service & Responsiveness
Una’s “keep it moving” mentality means we’re delivering at a pace that sets us apart from the competition.
We have implemented tools to speed up the sourcing process, remove bottlenecks, and focus on results.
Create Value From Your IT Spend Categories
These days, skimping on technology spend isn’t an option. Being able to obtain savings on the IT products and solutions you need to run your business is an incredible advantage. And while the cost savings are key, the value a GPO unlocks in terms of effort and time saved during the IT procurement process is just as important.
Establish better overall IT contract management, eliminate shadow IT, easily compare system features and alternatives, and keep track of the data within your IT spend with Una’s technology savings platform.
Schedule a consultation with one of our expert Sourcing Advisors to learn more.
Request a Free Spend Analysis
Una’s team of Sourcing Advisors is standing by to help be your guide to IT procurement.
Request a free, no-obligation cost analysis to compare your current pricing to the contracts and savings available within our tech vendor portfolio.
Simply fill out the form and one of our Sourcing Advisors will be in touch shortly.