What is IT Procurement?
IT procurement involves the process of sourcing and acquiring technology assets for your organization. It must take into account your organizational needs for the equipment itself, as well minimize your risk while simultaneously getting the maximum amount of value for your investment.
At the top of the wish list for organizations looking to acquire new technology is cost reduction. A study by Deloitte reports that 74% of Chief Procurement Officers (CPOs) flag cost savings as the number one factor when seeking to procure new equipment.
With that in mind, there are a set of best practices that govern an effective IT procurement strategy, with the goal of maximizing value while minimizing risk to the organization. Let’s take a look at some of these.
IT Procurement Best Practices
IT procurement specialists must strike a balance between cost savings and meeting organizational needs. Below is a list of goals that they seek to achieve during the process.
1. Acquire Technology That Aligns With Organizational Needs
All too often, technology purchases are made in the hope that the cost value will be worth the trouble of the organization having to adapt to the equipment.
In fact, the reverse is true; the acquired technology should be strategically procured so that it fits in with and supports business goals. Having to engineer workarounds and modify your IT environment — or larger processes or workflows — can lead to both inefficiencies and integration problems.
2. Forming Strategic Relationships
Forging a close relationship with specific vendors and/or IT providers offer numerous advantages to the IT procurement process. Not only will this result in cost savings by leveraging economies of scale and established logistical practices, but the right provider can also help to:
- Resolve adoption problems more efficiently
- Eliminates rogue buying and integrates with existing ERP systems like SAP, PeopleSoft, Oracle, and more
- Allow for the establishment of service level standards and agreements
- Create a framework for both parties to work together to improve the relationship
3. Involve Stakeholders
As part of a strategic sourcing process that attempts to glean as much information as possible before making a purchase decision, it’s important that all stakeholders are involved in the IT procurement process.
This will allow your procurement personnel to understand the organizational needs, budget, and how all the intended acquisitions will impact operations.
4. Minimize Risk
All asset acquisitions come with an element of inherent risk — and IT is no different. From technology that fails to support the company’s needs to potential financial or compliance issues down the road, a procurement specialist will work with risk mitigation and security in mind.
Some of these practices include:
- Conducting a full risk analysis
- Determining the probability of financial losses
- Roadmapping, planning for future projects, and implementing plans to reduce their impact
5. Acquire Assets With an Eye Toward The Future
Many organizations seek to lower their capital acquisition costs and therefore make purchasing decisions based primarily on immediate needs and initial price.
However, top companies choose to look at total cost of ownership when making acquisitions. Instead of getting quotes from vendors, today’s IT procurement specialists, like those at PCM Canada, will identify how much the technology will cost to operate and eventually dispose of; ensuring that the most cost-effective option is selected that will pay dividends over its lifespan.
By following these IT procurement process best practices, you will be able to identify technology that offers the best value, represents the lowest amount of risk, and services your organizational needs today and tomorrow.
PCM Canada, formally PCM Canada Inc., offers specialized IT procurement services that will help your company ensure that your technology serves your organizational needs. Contact us to learn how we can help you source, procure, and manage the technology you need to move forward.