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A Comprehensive Guide to IT Procurement

Blog Post
January 18, 2023

The importance of IT procurement in business can’t be overstated: when you’re living in a digital age, change comes fast and seemingly all at once. For example, third-party logistics (3PL) fulfillment, also called outsourcing fulfillment, is increasingly used to keep things moving quickly. The importance of effective IT procurement to business success is greater than ever.

In today’s business market, no one can afford to be left behind — whether that’s in leadership or management style, software, or hardware solutions. That’s why it’s essential to preserve alignment between your organization’s business goals, management objectives, and end-user experience — and to do that, you’ll need a mindful procurement strategy.

Every stakeholder in the lifecycle of the technology should have input, from end-users and their managers to the organization’s CTO. No one party can conceivably foresee how new technology might be used, and no one vendor can advise you on the proper steps to take. In this blog we’ll look at planning out your IT procurement, getting your technology sourced, and managing the transition and aftermath.

Planning for IT Procurement

Upgrading or trading out your IT software and hardware, like procuring office equipment of any other kind, requires substantial integration and planning. Procurement in IT, specifically, can be overwhelming because each vendor or service is attempting to provide something no other company does — and frequently, that means customization, too. Getting quotes can now be a uniquely tailored process, which means it’s important to bring all your technology requirements to the table vetted and ready to go.

Benchmark your system and performance metrics before making any changes, so you’ll be able to demonstrate just how much the new solution is helping once underway.

Now, get clarity on all the business goals in making this change. If your collaboration software is simply out of date or you’re looking to refresh, it’s going to be a much simpler change than implementing a whole new CRM.

What is the problem you’re solving or the process you’re improving? Is it going to be a new version of the old technology, or striking out into a whole new way of doing things? You need to know both the business goals — the end solution you’re trying to create — and the needs and concerns of those employees who will be dealing with it.

  • End-user complaints and requests are valid and should be included in any plan.
  • The management view provides important context and information like budget concerns.
  • The IT department, and their subject matter expertise, are responsible both during and after implementation.

All three of these viewpoints are crucial in understanding the scope and direction of this project. Next: Combine, streamline, and then express the relevant input from your stakeholders in an actionable way. A procurement plan, including a rough IT project management procurement checklist, defines these data points and includes budgetary limits.

Sourcing IT Products and Services

Next comes research. Armed with your procurement plan, diligently explore the market of your possible solutions, so you know what’s out there. Sketch out a rough description of what each one offers, narrow down the list — with input from stakeholders, if necessary — and send out your requests for proposals.

Each proposal or quote should be measured against the procurement plan to see how well its offer lines up with your needs. If you’re missing a proposal from a vendor for whom you had high hopes, it’s smart to reach out with a reminder that you are looking for proposals.

Contact a vendor for more information if you feel you may not have enough to decide — they’ll be more than happy to fill out their proposals with more details if it means possibly getting your business. It can often happen that one “almost right” solution leans a lot closer to perfect after just a bit of exploration and customization, so don’t stop researching as you narrow down the field.

Eventually, you should be left with three choices (or fewer). Gather recommendations and opinions on the remaining contenders to help ensure later buy-in, and make your choice.

Negotiating Contracts

Once you’ve made your choice of vendor or project, it’s time to manage the contract. First comes Identifying key terms and clauses in the contract as it stands, and bringing your legal department or official into the conversation.

One person should be responsible for collecting and bringing input to the negotiation of terms. It is in your best interest, and the vendors, to be as clear as possible and to make sure that your chosen solution fits with your research and project plan.

Finalizing the contract feels momentous because it is. You’ve made it through the first major steps in your change management.

Managing the IT Procurement Process

Vendor management is the art of optimizing and retaining your relationship with the vendor. If the product or service requires ongoing work with the vendor, like a SaaS or similar format, this relationship is even more key. Vendor management involves monitoring the contract, to confirm compliance, and your supplier’s performance, helped along by the benchmarking you did at the outset.

As the project manager, it will fall to you to resolve any disputes or issues. Misalignments will happen, especially during those first integrative steps, so it’s important to facilitate solutions as quickly as possible. “Begin as you mean to go on,” as they say, which here means dealing with problems or missteps when they arise, making sure they don’t work their way into the process.

At the end of each contract, you will have the option to renew or terminate. Use your benchmarks to report on performance during the life of the contract. Think about how any early hiccups may be clouding the good work and eventually implemented and integrated technology might have done in the intervening months.
If you renew, that’s another chance to negotiate, make or request changes, and generally iron out any misconceptions from the first time. If you terminate, you’ll start this process over at the beginning.

IT Procurement Made Simple

Here are those steps in a simpler format:

  1. Gather requirements, concerns, requests, and complaints from a variety of stakeholders
  2. Combine, streamline and make these data points actionable
  3. Benchmark relevant systems and performance metrics
  4. Research the market to ensure a diverse range of vendor options
  5. Send RFPs to likely candidates and narrow them down to a few choices
  6. Use all available information and input to make your choice
  7. Negotiate, finalize and monitor the contract
  8. Implement the new technology
  9. Review terms and performance at the end of the contract

IT changes can be some of the most finely tuned, detailed, and complex to properly manage, which is why communication and documentation throughout the process are so important.

Bottom line: you want to balance the technology’s price, ease of integration and use, competitive value, and the likelihood of buy-in. So much of your business success relies on the twinned concerns of technology and competition, and they both come into play during a proposed change like this. The key to success in both is to research, plan ahead, get input and compare vendors’ offerings.

Interested in learning how Teksetra can help? Contact us and we’ll be glad to answer any questions that you have!

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