What is IT Procurement?

IT procurement is the process of buying software, hardware, and services to run, scale, and improve the digital environment that powers a business.

The main goal in the typical IT procurement process is to purchase tools and services that best help your business achieve its operational goals.

While it sounds simple enough, effective IT procurement frameworks actually require a comprehensive process and strategy to be effective and efficient. Creating a solid IT procurement strategy involves:

• Determining your IT requirements
• Negotiating and managing contracts
• Managing the assets and ensuring quality
• Defining IT procurement policies and procedures
• Discussions with IT vendors and service providers

In this article, we’ll take a closer look at these IT procurement steps and others, so that your business can begin putting together an IT procurement and purchasing strategy that reduces costs, maximizes innovation and increases controls.

8 IT Procurement Policy and Procedures

1. Knowing Your IT Requirements Is One of the Most Important IT Hardware Procurement Best Practices

Before you develop your IT procurement strategy, you should know what needs to be purchased. This is accomplished by analyzing existing assets, how services are being utilized across departments to determine what is required, and where there are potential risks.

You should also assess how much value the technology will generate across its life cycle, as even today’s cutting-edge technologies can become obsolete quickly.

2. Create an IT Procurement Approval Process

Every procurement strategy needs a robust approval process to keep costs under control and prevent employees from making unnecessary purchases. This should be established before proceeding further into executing the procurement strategy.

An effective authorization system will not only avoid unnecessary purchases but also include a process to measure the cost-effectiveness of each buy.

3. Make a Shortlist of Vendors and Service Providers

Once you have an idea of what you need to purchase, start shopping around for suppliers that have a strong industry reputation and that can meet your needs.

Connect with them to start putting the feelers out and get more information about what they can offer so you can start comparing suppliers.

4. Put Out RFPs and RFQs

With your shortlist in hand, it’s time to issue the requests for quotes and proposals from your chosen suppliers to start the competitive bidding process. Be sure to include specific details about what products or services you require, your criteria, budget, and preferred terms and conditions.

5. Negotiate With Your Shortlist of Suppliers

Once you get back the bids and tenders, it’s time to evaluate them and then return to the suppliers for negotiations. Wait until you receive all of the proposals and quotes and then negotiate terms to see where you can get the best possible deal.

6. Choose Your Suppliers and Make the Purchases

Now it’s time to select the suppliers and start assembling the contracts that will allow you to purchase the agreed-upon products and services. The purchasing step involves creating a purchase order that shows the price, exact specification, and terms and conditions.

Having proactive supply chain managers really helps here, as they can potentially save you time and effort following up on status.

7. Integrate the New Product or Service

The procurement process doesn’t end once you make the purchase. You need to get a receipt from the supplier and then verify that the products and services have been delivered as expected.

You also need to ensure the payment has been set up, whether it’s a one-off price or an ongoing fee.

8. Measure Success With IT Procurement Metrics

The last step of any effective IT procurement strategy is to keep tabs on whether or not your goods and services have been delivered as expected for the business. It’s important to assess whether the new products or services are being used effectively and moving the needle where it matters.

Using IT procurement benchmarking will help you do an even better job the next time IT procurement is required.

Best Practices in IT Procurement

Now that you know the fundamentals of an IT procurement strategy, let’s review some of the best practices that you should keep top of mind when purchasing IT products and services:

• Focus on business goals. The effectiveness of an IT system procurement process is determined by making informed purchasing decisions with business growth and efficiency in mind.

It’s easy to get taken in by the latest technology trends and forget about what they really mean for your business and your industry. If your IT demands are great, consider designating a Chief Procurement Officer or creating a procurement team to handle procurement management.

• Develop strong supplier relationships. Building meaningful partnerships with suppliers is one of the key components of the IT services procurement process. It can help you to get preferred treatment, access, discounts, and the best possible service level standards and agreements.

• Get input from key stakeholders. Make sure you get perspectives from everyone in the business to pinpoint what technology your business needs and what purchases will bring the most improvement for the money. Procurement leaders will find it easier to build buy-in when it comes to technology adoption further down the line too.

• Consider the risks. All IT purchases carry an element of risk and you need to know what they are before integrating the product or services into your business. This will help you to establish mitigation measures.

Risks can be discovered and addressed by conducting a risk analysis to determine the level of each risk you find and creating a plan to prevent them from becoming a problem. Later, this will help you suggest improvements in the IT process and procurement strategy.

• Focus on long-term results. It’s easy to think about IT procurement through a short-term lens, given the speed of innovation in the industry. Educated consumers keep the future in mind and consider how each purchase will impact the IT environment for the years to follow.

Knowing What IT Procurement Is Is Just the Start

While technology purchases for the business aren’t as easy as going on a shopping spree in the mall, they can be made much simpler by enlisting the services of a trusted managed service provider.

As a leading MSP, ITSco has worked with businesses for decades to help them develop effective IT software and hardware procurement processes that best suit their business needs.

Contact us today to learn more about how we help your business discover cost savings, become more innovative, and grow faster by preparing a customized IT procurement toolkit.