5 Handy IT Procurement Best Practices Your Business Must Know

For your business to remain competitive and agile, obtaining the right IT tools and services is essential.  

Unfortunately, doing so is easier said than done. In fact, a 2020 Topline Strategy Group study found that companies in the US and Canada waste over $1.5 billion and 32 million man-hours on inefficient procurement processes.  

A key solution lies in having a proper IT procurement strategy. In this blog post, we’ll define what this strategy entails, highlight its benefits, and list IT procurement best practices your business must know. We’ll also discuss how Techmedics can help you streamline this process.

What is IT Procurement?

IT procurement is the process of acquiring IT goods, services, and solutions that meet your company’s goals. It involves the following components:

• Hardware and software acquisition: Purchasing laptops, desktops, servers, off-the-shelf software, and enterprise software solutions.

• Vendor negotiation: Deliberating terms and conditions with potential vendors to reach a mutually advantageous agreement.

• Licensing management: Overseeing and optimizing software licenses to minimize non-compliance risks and costs.

• Budget alignment: Making sure procured goods and services align with the company’s financial targets.

• Contract and asset management: Handling warranties, support coverage, and lifecycle tracking.

What are the Benefits of IT Procurement?

When your business has a proper IT procurement strategy, it can unlock the following advantages:

1. Cost Savings

Effective procurement reduces expenses by eliminating redundant purchases and ensuring the best deals with vendors. It also allows your business to take advantage of bulk purchasing and volume pricing.

2. Better Efficiency

With a streamlined procurement process, you can acquire necessary technology more quickly. This means approvals move faster, vendor comparisons happen simultaneously, and delivery and fulfillment can be tracked more easily.  

3. Improved Security

By verifying vendors, using encrypted communication, and strictly enforcing access controls, your organization can protect your sensitive information from threat actors and prevent data breaches.  

4. Enhanced Compliance

When you embed governance, transparency, and control into the purchasing process, you ensure your business’s compliance with industry regulations like HIPAA, NIST, ISO, and SOC 2.

5. Strategic Decision Making

Procurement platforms collect and analyze spend data, market trends, and supplier performance. This enables businesses to forecast demand and pricing shifts and compare suppliers side-by-side.

IT Procurement Best Practices Your Business Must Apply

After understanding the benefits of IT procurement, it’s also important to learn sourcing and purchasing strategies and best practices when acquiring tech for your business. Let’s take a look at some of them:

1. Define Your Requirements

Before looking for the ideal vendor, ask yourself: What does my business truly need?

Without understanding your requirements, you risk buying the wrong tools, overspending on unnecessary features, purchasing reactive solutions, and choosing vendors that can’t help you achieve your goals. It’s like shopping for windows and doors for your house without knowing layout or measurements; you might end up with those that don’t fit its design, dimensions, or flow.

2. Research Your Vendors Thoroughly

When procuring IT, don’t just choose the first vendor that offers their services; they won’t likely deliver the best value for money.  

Instead, take the time to select multiple vendors through industry directories, market research, or referrals. From there, evaluate them using key criteria like pricing, delivery reliability, reviews, compliance standards, and alignment with your company needs. At the same time, request proposals or quotes to see which vendor offers the best long-term value.

By doing your due diligence, you set the stage for secure and compliant procurement while reducing the risk of costly mistakes.

3. Consider the Total Cost of Ownership  

The cost of buying hardware, software, or services doesn’t just end with their sticker price. Your business must also consider the total cost of ownership (TCO), which includes all expenses you may incur during and after the deployment of your IT tools and platforms.  

TCO essentially gives you the full price your business needs to pay when acquiring IT goods over its entire lifecycle.

To effectively calculate TCO, consider the following cost categories:

• Acquisition costs: The upfront price of hardware and software licenses plus initial setup fees.

• Operational costs: These include expenses like internet connectivity, power consumption, and consumables like printer ink.

• Personnel costs: Time spent by your staff and consultants on installation, configuration, ongoing management, and training end-users.

• Maintenance and support costs: Repairs, warranties, service contracts, and IT support subscriptions.

• Downtime costs: While this is harder to quantify, aim to determine the potential productivity or revenue loss should your systems fail.

• Upgrade and development costs: Expenses for future hardware and software upgrades or custom development to integrate new platforms.

• Disposal/decommissioning costs: These refer to the expense of disposing of old equipment or migrating data when an asset reaches its end-of-life.

Factoring in all of these elements helps you gain a clearer picture of the total costs of procuring IT goods. As a result, you can allocate resources more effectively, make strategic long-term decisions, and put you in a strong position when you…

4. Negotiate Your Contracts

Narrowed down your preferred vendor list? Great job! But before you choose the vendor you’ll go with, take some time to engage in some competitive negotiation to maximize flexibility, value, and long-term alignment.

For instance, use the proposals from other vendors as leverage to receive better pricing, terms, or additional services. Ask vendors as well to clarify their proposals based on specific needs or concerns like pricing models, security, and scalability. Finally, make sure to discuss payment terms, warranties, service level agreements (SLAs), and other necessary contractual elements.

5. Ensure Scalability and Futureproofing

Did you know that poor scalability is one of the reasons why up to 70% of IT projects fail? As such, it’s important to ensure that the IT goods and services you procure can easily adjust based on your evolving needs.

For instance, investing in a cloud-based enterprise resource planning (ERP) platform significantly reduces the need to purchase and maintain costly on-premises hardware. This also enables you to start with core functions and add modules as you grow. You can even add users incrementally without the need to invest in new devices or reconfigure your IT setup.

It’s equally important to consider integrations during IT procurement. This involves connecting new software with your current tech stack, such as ensuring a new piece of software syncs with your customer relationship management tools. If your tools seamlessly “talk” to each other, you can avoid silos, duplication, and manual work.  

How Techmedics Can Help with Optimizing the Procurement Process

Need help with the IT procurement process? Why not partner with an expert like Techmedics? Our Managed IT Services clients can leverage the following solutions:

• Hardware sourcing: Procuring computers, networking equipment, servers, and peripherals.

• Software sourcing & licensing: Acquiring software, identifying underused licenses, and monitoring software regularly to stay audit-ready.

• Warranty & service level agreement (SLA) management: Aligning warranty coverage with your needs and defining service expectations.

• Lifecycle management & asset tracking: Overseeing assets from purchase to deployment to retirement.

• Bulk & volume pricing management: Purchasing larger quantities of hardware and software to secure better pricing.

By working with us, you’ll have access to a team of tech procurement specialists with deep vendor knowledge and solution design. What’s more, you’ll have a central point of contact for your service and support needs.

Ready to witness IT procurement transformation for your business? Talk to our experts today for a FREE consultation.

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