Arbitrarily picking what technology to buy is a sure path to bloated budgets, poor performance, and expensive data breaches, especially for larger businesses with complex networks. If you don’t have deep knowledge of today’s technology and how it can benefit your business, you risk getting stuck with information technology that costs too much and does too little.
Fortunately, this kind of knowledge and expertise can be easily outsourced through IT procurement services. With experts guiding your procurement, you can control costs and make sure all of your technology investments support your business goals.
What is IT procurement?
In the simplest possible terms, IT procurement is buying business technology and hiring IT services for your company. In real terms, this process encompasses a wide range of activities, such as identifying technology needs, evaluating options, selecting vendors, negotiating terms, purchasing hardware and software or services, and managing those purchases throughout their lifecycle.
An effective IT procurement process ensures that you are not simply buying technology, but rather investing in solutions that fit your existing infrastructure and support your business objectives.
The 4 types of procurement
Procurement can generally be divided into four categories:
- Direct procurement: Technology and services directly involved in delivering your products or services
- Indirect procurement: Products and services that support your organization, such as office technology and productivity or collaboration tools
- Goods procurement: Physical products, including computers, servers, networking equipment, and peripherals
- Services procurement: Nonphysical offerings such as cloud platforms, software subscriptions, IT consulting, and managed services
You’ll find that a business your size needs to perform all types of procurement, and these categories will often overlap. With so many considerations, it can be difficult to build a consistent, streamlined process for determining what you need, who should provide it, and whether the purchase delivers enough value. Fortunately, you don’t have to do all that.
What are IT procurement services?
IT procurement services don’t just tell you what to buy; they take all the work involved in technology purchasing and place it in the hands of specialists. Handling procurement yourself requires your internal IT, finance, and operations teams to handle every quote, vendor negotiation, order, renewal, and technology replacement. An IT procurement provider manages these activities on your behalf, saving you a lot of time and preventing an untold number of headaches.
These services, of course, cost money, but when your organization has a large or distributed workforce, the benefits of IT procurement services far outweigh the initial expenditure.
This is because your purchasing partner’s goal is not simply to find the lowest price. Effective IT procurement specialists always focus on the total cost of ownership. Cheap solutions aren’t cheap if they need extensive maintenance, hamper your productivity, or create expensive security problems.
IT procurement providers know this and help you avoid costly mistakes by looking at the big picture and “playing the long game” when it comes to choosing what to pay for.
What do IT procurement providers do?
An IT procurement services provider supports you throughout the entire technology procurement lifecycle. Depending on your needs, these services may include:
- Needs assessment: Determining what technology your users and departments actually require
- Vendor sourcing: Finding and comparing appropriate hardware, software, cloud, and service providers
- Price negotiation: Using purchasing volume and the provider’s vendor relationships to pursue competitive pricing and terms
- Technology standardization: Analyzing usage patterns and surveying your workforce to determine preferred devices, applications, and vendors to simplify support
- License management: Tracking software subscriptions and eliminating unnecessary, bloated, or unused licenses
- Asset lifecycle management: Planning for deployment, maintenance, replacement, and retirement or secure disposal
- Ongoing vendor management: Coordinating with technology providers and helping resolve purchasing or service issues
- Procurement planning: Aligning technology purchases with your IT roadmap and budget
The benefits of comprehensive, forward-thinking procurement strategies
This broader approach prevents one of the most common problems enterprises encounter when going through procurement: buying technology in isolation. This is when each department or team just buys whatever they want or think they need without consulting each other, resulting in overlapping applications, incompatible systems, money wasted on excessive licenses, and inconsistent or noncompliant cybersecurity controls.
A good procurement partner standardizes your purchasing while maintaining visibility across your IT environment. Not only will your IT be consistent and more efficient, but you’ll have a clear picture of your IT assets to help ensure compliance as well as avoid unnecessary expenses and cybersecurity incidents.
The right partner also helps you look ahead. If your business expects significant hiring, expansion, office moves, or technology upgrades, your provider can incorporate those plans into purchasing decisions instead of forcing you into last-minute orders.
Internal procurement vs. outsourcing: Pros and cons
It’s natural to have some reservations about outsourcing your IT procurement. After all, you’re handing over a wide range of responsibilities with serious long-term implications for your business to an outside party.
Let’s take a look at some of the pros and cons of both options to help determine which option is right for your business.
Control
Managing IT procurement internally gives you direct control. Your employees already understand your organization, and you don’t have to introduce another service provider into the process.
However, holding onto this control requires placing a significant workload on your IT and administrative teams. Your staff must research vendors, request quotes, negotiate contracts, track licenses, process orders, manage equipment, and monitor renewals, all while handling their core business responsibilities.
So ask yourself, “Is maintaining direct control over procurement worth the lost productivity and increased stress?”
Relationships
Having final say in which vendors you buy from seems nice, until you realize you lack the purchasing volume or specialized vendor relationships needed to get the best price. Procurement providers frequently buy large volumes for their many clients, so vendors give them (and thus, you) the best possible product prices and service terms.
Consistency
Naturally, each of your departments and teams has their wishlists for IT procurement, but you can’t give everyone exactly what they want. If you try, you’ll end up with several software licenses that do slightly different things, incompatibility problems when departments must collaborate, and skyrocketing costs as you try to please everyone.
Outsourcing improves consistency, and thereby efficiency. Instead of a random and chaotic IT environment, you can establish organization-wide standards for devices, software, vendors, and data security requirements, minimizing expenditures and optimizing performance.
Scaling
The best IT solution today might not be the right choice for tomorrow. If your technology can’t grow or evolve alongside your business, it must be replaced, which is never cheap or easy.
An IT procurement partner has helped many clients grow and observed what did and did not work. This makes them well-equipped to position your business for the future with solutions that scale and meet the unique long-term challenges of your industry.
Ready to find out how a customized procurement plan for your business can deliver real cost savings and ensure a productive and stable IT environment for years to come? Schedule a consultation with Soteria’s IT procurement specialists today!