IT procurement services: How to save when choosing for your company

In the past few years, global supply chain shortages and inflation have made procurement for companies increasingly challenging. To keep up with these challenges, businesses are focusing on ways to make the procurement process more efficient by leveraging the right technology.

In PwC's 2022 Digital Procurement Survey, 69% of companies worldwide named cost reduction one of their top three priorities. The other two priorities for procurement professionals are strategic sourcing and digital transformation.

IT procurement, in particular, is undergoing a significant transformation, with many moving away from more manual traditional models and opting for unified solutions that reduce the complexities of navigating multiple vendors and programs. 

In this blog post, we'll explore what traditional IT procurement involves and why they are no longer efficient for global organizations. We'll cover how companies can save on procurement services today and how to choose the right one.

Want to see how easy it is to procure equipment with the GroWrk platform? Check out this product demo below!

What are IT procurement services?

IT procurement services are companies that help acquire and manage information technology (IT) products and services, including hardware, software, and professional services. A well-planned IT procurement strategy includes services that optimize technology resources, reduce costs, increase profit, and improve overall business success. In this article, we will discuss the benefits of effective IT procurement services, tools, and best practices for choosing the correct one.

What are traditional IT procurement services?

The average day-to-day life of a traditional procurement specialist can involve making calls, sending emails to suppliers, and manually entering data into spreadsheets. It could also involve managing suppliers, researching new vendors, and reviewing purchase agreements.

They might visit supplier warehouses to pick up purchases or assess product quality. Procurement specialists also work closely with legal departments to negotiate terms for contracts and renewals.

Although procurement specialists oversee purchases for the entire company, they can clash with the IT department over buying new technology quickly.

To avoid this, companies have established a separate IT procurement department that operates under mutually agreed-upon guidelines. If they don't have this capacity, they outsource the function to a company that performs all these tasks as a service.

This way, smaller purchases can be made without procurement management or approval from department heads, while larger investments are still subject to the Procurement team's oversight and authorization.

Technology procurement plays a pivotal role in managing the IT inventory of an organization, minimizing redundancy, and mitigating the risk of downtime or service disruptions. Following a well-executed IT procurement guide can help reduce costs in the overall procurement strategy. Most importantly, it allows companies to purchase the technology resources their teams need at the right cost. 

Why are traditional IT procurement services inefficient? 

With worldwide IT spending forecasted to reach $4.7 trillion this year, companies want to ensure their investments provide value. According to PwC, 88% of executives struggle to capture value from their technology investments. This raises the question: why are IT procurement services inefficient?

One of the main reasons is outdated manual processes. Relying on procurement methods that involve repetitive and time-consuming tasks limits a company's financial and business success because they do not generate substantial savings or profit. Traditional IT procurement primarily focuses on acquiring the right goods and services at the right time but not on long-term strategy.

While traditional methods have been effective in the past, they were designed for a different era, one without global workforces or rapidly evolving information technology solutions. Digitalization and the use of online platforms have simplified this process, but there are still limitations to what these platforms can do.

 Here's why they've become inefficient:

1. Unprepared for a remote and global workforce

Traditional procurement services never imagined a world where most employees would work remotely or from various global locations. The pandemic rendered all in-person interactions virtually impossible, so going into warehouses or meeting up with suppliers became a challenge. When employees were forced to work remotely, physical paperwork also became irrelevant.

This new context of distributed workforces that rely heavily on digital tools has made procurement processes increasingly digital. However, many companies still do not have their processes streamlined and often rely on several tools and tracking methods.

2. Lengthy quote and approval processes

Procuring IT products and assets through traditional means often involves a lengthy cycle of obtaining quotes and securing approvals. When this process is done manually, procurement specialists must pay special attention to keeping up with different suppliers and following up via email or phone calls, which can leave room for loose ends or miscommunication.

3. Lack of centralized management

Without a central platform to manage every aspect of IT procurement, organizations struggle to coordinate their purchase efforts efficiently. In this scenario, stakeholders lack visibility over the supply chain or vendor relationships, making it difficult for financial management to have data-backed information to make decisions.

4. Reliability concerns in international expansion

Expanding internationally adds another layer of complexity to IT procurement. Internal capacity or traditional services that are outsourced may not offer the reliability and scalability needed for global expansion. Just think about the logistical nightmare it can be for procurement teams to look for hardware suppliers and vendors in each new country the company expands to. 

How can companies save on technology investments and IT procurement services?

A report by Gartner states that midsize enterprises (​​$50M - $1B) spend around 4.9% of their revenue on their IT budgets, which can go up to 8.6% for industries like Banking and Financial Services.

13% of those IT budgets are spent on hardware, and the ratio has stayed the same over the past four years.

1) Streamlining procurement operations with digital platforms

In today's fast-paced business environment, moving procurement operations to a unified digital platform is a strategic move that makes financial sense. This approach eliminates the need for contracting external companies for hardware and software procurement or the complexities of building an in-house team, allowing organizations to focus on their core business objectives.

2) Innovative solutions for IT procurement

Innovative solutions like GroWrk, with a full range of IT hardware and software, offer a comprehensive platform that simplifies IT procurement. The GroWrk platform features an easy-to-use dashboard that streamlines purchasing hardware and managing devices throughout their lifecycle. It integrates seamlessly with existing HR and IT systems and provides MDM software and asset-tracking capabilities. This allows companies to efficiently set up new hires across more than 150 countries with just a few clicks while adhering to high data security and compliance standards.

3) Developing effective procurement strategies

Companies should develop robust procurement strategies for cost savings and operational efficiency in IT hardware and software procurement. These strategies should include comprehensive technology roadmaps that align IT needs with industry best practices, enabling informed purchasing decisions and preventing last-minute expenses. Clear technology standards help eliminate ambiguity and promote standardized procurement, leading to potential cost-effective bulk purchases.

4) Leveraging vendor relationships for better deals

Building and maintaining strong vendor relationships can lead to better pricing and service agreements. By fostering collaborative partnerships, companies can negotiate favorable terms, obtain discounts, and secure exclusive deals that contribute to cost savings and improved procurement outcomes.

5) Utilizing spend analysis for informed decision-making

Conducting a thorough spend analysis allows companies to gain insights into their procurement expenses and identify areas for cost reduction. By analyzing spending patterns, organizations can make informed decisions, optimize their procurement, and uncover opportunities for cost savings.

To start bringing that percentage down, moving procurement operations to a unified digital platform makes financial sense. It streamlines source-to-pay operations and provides visibility for all stakeholders. 

Instead of contracting another company to handle hardware and software procurement or navigating the complexities of creating an in-house team, companies can now turn to innovative solutions like GroWrk. 

The GroWrk platform offers customers a unified and easy-to-use Dashboard that simplifies purchasing hardware, lets IT teams manage devices throughout their entire lifecycle, integrates with your existing HR and IT systems, and offers MDM software and asset tracking capabilities.

GroWrk lets your team set up new hires across more than 150 countries in just a few clicks while following high data security and compliance standards.

By consolidating all IT procurement needs into a single platform, businesses can streamline operations, reduce overhead costs, ensure data security, and make informed decisions about technology investments. Some computer inventory management software has the ability, like GroWrk, to procure within the platform.

One option is investing in remote device management software. This technology aligns IT needs with best practices enables informed purchasing decisions and prevents last-minute expenses. Clear technology standards eliminate ambiguity and promote standardized procurement, potentially leading to cost-effective bulk purchases.

Additionally, implementing automated workflows and reporting prevents costly oversights in renewals and deadlines. 

How to choose the right IT procurement service

When selecting an IT hardware procurement service, you need partner systems that align with your company’s future goals. Budget and deliver tangible business value with improved performance. Some key factors to consider are global scale and reach, reliability in delivery and cost, and intuitive software. Choosing a service that offers purchasing software for efficient procurement management is also crucial. Here are the factors you must consider while choosing the right solutions for IT procurement:

1. Global Reach and Scalability: Ensure the procurement service can support your organization’s global operations and accommodate future growth. The ability to manage international supply chains is critical for business success.

2. Cost-Effectiveness and Financial Management: Evaluate whether the service offers competitive pricing and contributes to cost savings. Effective financial process management is essential to maximize the return on your technology investments.

3. Technology Integration and Software Solutions: Look for procurement services that seamlessly integrate with your existing IT systems. The right procurement software can enhance procurement and improve operational efficiency.

4. Vendor Relationships and Supplier Management: Strong vendor relationships are vital for securing favorable terms and reliable service. A procurement service that excels in supply chain management can provide a competitive advantage.

5. Data Security and Compliance: Ensure the procurement service adheres to industry data security and compliance standards. Protecting sensitive information is crucial to avoid risks in IT procurement and ensure non-compliance with regulations.

6. Customer Support and Performance: Assess the procurement service's level of support and performance. Reliable customer service ensures that issues are promptly addressed, maintaining smooth operations.

Benefits of effective IT procurement services

Effective IT procurement can bring numerous benefits to businesses, including:

• Improved Financial Management: By carefully managing technology expenses, businesses can reduce costs and improve their budgeting processes. Effective IT procurement ensures that every dollar spent on technology delivers maximum value, contributing to better financial health.

• Enhanced Supplier Management: Building strong vendor relationships is critical to IT procurement. These relationships can lead to better pricing, improved service levels, and increased business value. Strong vendor partnerships also foster trust and collaboration, essential for long-term success and getting the correct cost on IT procurement.

• Increased Business Success: Acquiring the right technology can significantly enhance business operations. Effective IT procurement helps increase business productivity, streamline processes, and gain a competitive edge in the market.

• Better Software Licensing: Managing software licenses effectively is crucial to avoid non-compliance issues and optimize asset management software. IT procurement ensures businesses have the proper licenses, reducing risks and improving overall software management.

• Improved Technology Resources: Staying up-to-date with the latest technology solutions is vital for business growth. Effective IT procurement helps businesses acquire cutting-edge technology, enhancing their infrastructure and supporting their growth objectives.

Some popular procurement services and tools

There are various procurement services and tools available to support businesses in their IT procurement needs, including:

• Procurement Software: These software solutions automate and streamline the procurement process, making it more efficient and reducing the risk of errors. Procurement software like GroWrk and Firstbase provides a centralized platform for managing all procurement activities, from requisition to payment.

• Procurement Consulting: Expert advice and guidance on procurement strategy and best practices can be invaluable. Procurement consultants can help businesses develop effective procurement plans, optimize processes, and achieve better results.

• Procurement Outsourcing: Outsourcing procurement functions to a third-party supply chain can be cost-effective. This allows businesses to leverage the expertise and resources of specialized procurement firms, freeing up internal resources for other strategic activities.

• Procurement Market Research: Conducting and analyzing the procurement market can help businesses identify trends and opportunities. This information can be used to make informed decisions and stay ahead of the competition.

• Procurement Training: Training and development programs for procurement pros are essential to ensure they have the necessary skills and knowledge. Ongoing training helps procurement teams stay up-to-date with the latest best practices and technologies.

Wrapping up

Traditional IT procurement is no longer sufficient in today's business landscape, which is affected by global forces. The unexpected surge in remote workforces and the need for worldwide scalability have reshaped IT procurement into a streamlined and digital one. 

To save on IT procurement processes in the modern era, organizations must consider innovative, centralized software solutions that provide cost-efficiency, scalability, and a streamlined user experience. Embracing these approaches to IT procurement will save costs and position your organization for success in an ever-evolving tech world.

If you're ready to streamline your IT procurement, explore how solutions like GroWrk can transform your technology acquisition process. Our team is here to help you with all your IT procurement needs. Book a demo today to learn more. 

FAQs

What is IT procurement, and why is it important?

IT procurement involves acquiring and managing IT products and services, including hardware, software, and professional services. It is crucial to ensure that businesses have the right technology in place to support their operations, reduce spending, and drive business and user success.

How can procurement software improve the procurement process?

Procurement software automates and streamlines procurement activities, reducing the risk of errors and improving efficiency. It provides a centralized platform for managing procurement documents, tracking purchase limits, and enhancing supplier management, ultimately leading to cost savings and better vendor relationships.

What are some best practices for effective IT procurement?

Effective IT procurement consists of developing a clear procurement strategy aligned with business goals, building strong vendor relationships, implementing standardized procurement processes, leveraging procurement technology, and providing ongoing training for procurement professionals.