The Best IT Procurement Practices for Your Business

Having access to the right technology when you need it is important for all businesses, but knowing how best to source and obtain the right technology, for the right price, with the right support is challenging.

In this article from CAB IT, we will guide you on the best practices for IT procurement. We will explore the 8 top tips for businesses on how to get started with IT procurement.

What is Procurement?

Before we guide you on all the best practices, we must review what procurement means. Procurement encompasses the full process of sourcing and gathering all the needed resources for an activity.

For us at CAB IT, procurement as the process of identifying, shortlisting, selecting, and acquiring IT equipment and systems needed by a company.

7 Top Tips for IT Procurement

  1. Present Solutions

IT procurement is fundamentally about solving problems. Make sure it’s clear from the beginning what problem you’re solving with technology as well as how that specific technology solves it. It is important to remember that quite often businesses do not need a new technology, they simply need more leads, lower costs or a higher revenue – and these are facilitated by new technology procurement.

  1. Optimise Supply Chain Communications

Procurement should work closely with logistics, supply chain managers, contract managers and other staff – both inside the business and out in the supply chain – to ensure open, timely communications.

Businesses fail to deliver on the promise of a well-negotiated contract simply through a lack of communication.

As a leading provider within the IT sector, we are able to communicate directly with the supplier to get the correct specifications for your business needs.

Take advantage of CAB IT’s strong supplier and partner relationships >

  1. Make Alliances with Strategic Suppliers

This is much more than supplier relationship management. The best procurement teams strive to be the customer that their suppliers turn to with their best ideas.

They have the inside track on their suppliers and their suppliers’ industry and, as a result, obtain advance knowledge of new innovations coming to market.

These alliances, together with applying cross-function knowledge and optimising supply chains, puts businesses with best-in-class procurement teams ahead of their competitors. They are the ones who are already prepared to take advantage of new innovations whilst their competitors are figuring out the best way forward.

  1. Focus on Total Cost of Ownership, Not Just Price

The price of equipment may be the lowest you can possibly get, but if it requires more manhandling, maintenance or storage than more “expensive” alternatives, it may not prove to be the low-cost solution you need.

‘Best in class’ procurement teams really focus on that total cost of ownership – taking account of storage, maintenance, handling, and other costs.  Procurement specialists need to work collaboratively with their clients to understand the full business needs and how to achieve the best outcome in the most cost-efficient way.

  1. Leverage Technology

Procurement needs solid information on which to base decisions and start supplier negotiations – information about supplier performance, item usage, forecasted needs, waste percentages, production problems, sales and more.

Likewise, when their colleagues in production, sales and logistics place orders on suppliers they need access to contractual information to calculate optimal order quantities and obtain the best discounts and rebates available.

Of course, technology has a place for those who are required to go out to tender – placing an electronic barrier between suppliers and the procurement team until the right time helps to make the tender process more efficient.

There is no single solution here, but best in class procurement teams often supplement their core ERP systems with applications and analytics tools to meet their needs.

  1. Renegotiate Regularly

Best practice procurement doesn’t “let things slip through the net”.  Those procurement leaders are constantly monitoring contract performance and changes in the world around them to spot opportunities to renegotiate.  Some examples of indicators that a contract should be reviewed and renegotiated include:

  • a potential replacement becomes available.
  • requirements exceed/fall below the original forecast.
  • production or logistics issues arise.
  • competitors bring out a new design.
  • innovation in your industry.
  • innovation in your suppliers’ industry.

Take a look at the way in which CAB IT have achieved this in previous projects here. >

  1. Minimise Risk

Depending on the business, profit margin and risk are two of the biggest items on any CEO’s radar.  Traditionally, buyers were focused very much on driving costs down to improve profit margins, but increasingly businesses are forced to consider the risks involved in every decision.

Legislation around compliance, bribery, traceability, health & safety, and slavery; green issues and social responsibility are all factors that impact the boardroom.

Supply chain risks, delivery reliability and logistics issues all create a level of risk to the business.

Procurement teams have to equip themselves with knowledge of all these elements and manage them in order to reduce business risk.

IT Procurement with CAB IT

Here at CAB IT, we care passionately about performing best practice procurement in all of the ways outlined above while we find creative, exciting, innovative ways to reduce total cost of ownership and risk.

We provide worry free IT support for business in Bristol and the South West. With managed IT services and IT support, we can be a partner for growth.

Get in touch with one of our friendly and professional members of staff today to get the ball rolling. Alternatively, get a better understanding of what it is we do by reading some of our case studies here.