There is more to IT procurement than simply purchasing new technology and implementing it. It’s also about investing in the future of your business.
A staggering 70% of IT projects fail for various reasons, including unrealistic expectations, poor scalability, improper procurement practices, poorly defined project scoping, and more. These situations result in wasted resources and missed opportunities.
“In a world driven by innovation, the right IT procurement strategy is the bridge between vision and reality,” notes Chris Power, CEO of Power Consulting. “If your vision and reality are not properly aligned, you could be making costly mistakes for your business.”
The good news is that situations like this can be avoided by following IT procurement best practices. In this article, we’ll examine nine of the best practices in IT procurement and how adhering to them can keep your business on the right track.
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Understanding the Essence of IT Procurement Best Practices
Following the best practices in IT procurement ensures that every dollar you spend on new technologies aligns with your long-term objectives. Mastering IT procurement best practices, you position your business for a successful digital transformation.
Let’s take a closer look at nine IT procurement best practices and how they simplify your procurement process.
1. Needs Assessment: Start With Why
Before you embark on the procurement journey, ask yourself, “Why?” What are the core needs driving this purchase? What will it accomplish for the business? Engage with your procurement teams and stakeholders to pinpoint the exact requirements.
2. Dive Deep: Conduct Comprehensive Research
The technology landscape is vast and constantly evolving. By staying updated with the latest best practices in IT procurement, you ensure that your decisions are informed and future-proof.
3. Crafting Clear RFPs: Precision is Key
Your Request for Proposals (RFP) is your voice to potential suppliers. Ensure it is clear, concise, and reflects your IT procurement process best practices.
According to data from Loopio, the average win rate for RFPs is 44%. In addition, 17% of companies win 30-39% of their bids, while 16% have a win rate of 40-49% for their RFPs. Furthermore, only 8% of organizations reported RFP win rates of 80-100%
4. Vendor Evaluation: Beyond the Sales Pitch
It’s important to look beyond the marketing spiel. Dive into a prospective vendor’s reputation, past performance, and financial stability. Remember, this is not a one-time transaction; it’s the beginning of a long-standing partnership.
Source: Loopio
5. Negotiation: The Art of Value
Negotiation is not just about getting the lowest price; it’s about achieving the best value. That’s why you need to understand the nuances of contract management and ensure that both parties can benefit.
6. TCO: Seeing Beyond the Price Tag
The initial cost is just the tip of the iceberg. Emphasize the total cost of ownership (TCO) to ensure that your investments are cost-effective in the long run.
There are several ways in which you can lower your TCO, including:
- Automation
- Cloud migration
- Process efficiency improvements
7. Risk Management: Preparing for the Unknown
Every investment carries inherent risks. By integrating procurement management best practices, you can identify potential pitfalls and strategize accordingly.
According to PwC’s Global Risk Survey, 77% of businesses suffered from surprise operational issues over the past five years due to unidentified risks. Additionally, 36% of companies planned to increase their investments in compliance and risk management over the next two years.
8. Sustainability and Ethics: The Modern Imperative
In today’s interconnected world, supply chains are a driving force. As a result, you should focus on doing business with vendors who prioritize sustainable and ethical practices.
Data from an Ernst & Young study showed that 61% of respondents saw cost savings as the top motivator for improving supply chain sustainability. In addition, 51% of respondents stated that regulatory compliance was their top motivator.
9. Continuous Review: The Cycle of Improvement
The world of technology is in constant flux. That’s why it’s vital to regularly review and refine your procurement strategy to stay ahead of the curve.
What works today may not be as effective – or effective at all – tomorrow, so be sure to meet with your team to discuss your strategy and how you can improve it whenever necessary.
A Quick Guide to IT Procurement Best Practices
| Steps | Key Takeaways |
| 1. Needs Assessment | Engage stakeholders, pinpoint requirements. |
| 2. Comprehensive Research | Stay updated, ensure informed decisions. |
| 3. Clear RFPs | Precision in communication with potential suppliers. |
| 4. Vendor Evaluation | Look beyond marketing, seek genuine value. |
| 5. Negotiation | Aim for mutual benefit, not just cost saving. |
| 6. Total Cost of Ownership | Consider long-term costs, not just the purchase price. |
| 7. Risk Management | Integrate procurement management best practices. |
| 8. Sustainability and Ethics | Prioritize ethical and sustainable supply chains. |
| 9. Continuous Review | Regularly refine your procurement strategy. |
| Interested in learning more about IT procurement? Check out these blogs: |
Ensure You Follow the Best Practices in IT Procurement With a Trusted Partner
Understanding and mastering IT procurement best practices is more than a management process; it’s a strategic necessity. With the right approach, you can transform your IT procurement cycles, ensuring that every decision aligns with your business’s broader vision.
As a leading managed services provider, Power Consulting can assist you with your IT procurement projects. Backed by over 32 years of industry experience, our experts guide you toward informed and strategic decisions that foster long-term success.
Ready to elevate your IT procurement game, enjoy a streamlined procurement process, and lower your total cost of ownership? Contact us today for more information and to schedule a free consultation.
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