IT Procurement

What Is IT Procurement?

Before getting into all the details about planning a procurement strategy, it’s important to know what procurement is and how it fits into your ITAM system. 

IT Procurement Meaning

IT procurement refers to purchasing or obtaining computer equipment that you’ll use within your business. This is an essential step of the ITAM process since there is a significant financial investment in all technological equipment. You must plan for that investment in order to get the most value out of your IT assets. 

That’s where a procurement strategy comes into play. A procurement strategy will help you:

• Identify your company’s current needs
• Plan your budget 
• Locate equipment that will work best for your company
• Negotiate with vendors to get the best prices

There are a lot of steps and procurement methods involved in this process, so let’s dive a bit deeper into how all of this works. 

What Are the Main Types of Procurement?

The first thing you’ll want to consider with procurement is there are several types, and some will apply to computer equipment and IT-related purchases more than others. The four main types of procurement are:

1. Direct procurement
2. Indirect procurement
3. Goods procurement
4. Services procurement

Here’s a deeper look at how these types of procurement compare. 

Direct vs. Indirect Procurement

The main difference between direct and indirect procurement is how the items you purchase affect the bottom line. 

Direct procurement involves purchasing items that directly impact the production and delivery of goods or services your company profits from. For example, if you were running a 3D printing business that would involve procurement of 3D printers, design software, filament reels, etc., that will all contribute to the end product you provide to your customers.  

On the other hand, indirect procurement is the acquisition of items that have to do with daily business tasks. Using that example of the 3D printing company, that could involve purchasing items like personal computers, monitors, and video conferencing hardware that your administrative and sales teams use daily. 

When thinking about IT procurement, it’s usually focused more on indirect procurement of items that impact daily operations. However, even though these items may only indirectly affect the bottom line, that’s not to say they aren’t important. For instance, if your sales team’s computers aren’t working, it’ll hurt your ability to land new clients, so it’s essential to optimize all your operations for success. 

Goods vs. Services Procurement

When you get into goods and services procurement, you’ll be thinking about the types of items being purchased. 

IT goods procurement would be physical items that must be purchased for your business, like personal computers, keyboards, and computer mice. 

IT services procurement involves purchasing services like computer maintenance or software debugging services. 

Typically, most businesses should be focused on goods procurement within their overall ITAM plan since the management of physical goods is an ongoing process. That’s why our team at Multiply chooses to focus on physical computer hardware. We’ll help you optimize the purchasing processes for it each step of the way. 

What Are Different Types of Procurement Systems?

Along with the different types of procurement, various systems can be used to manage the overall procurement process. It’s important to note that some systems are easier to manage than others, so choosing the right one for your needs is essential to optimize for success. Here are a few of the most popular options. 

Supplier Management

Typically, most companies will work with various suppliers when they obtain computer equipment. Working with multiple suppliers will help you get the best prices from each, but it can also be pretty confusing to manage on your own. 

That’s why teams like Muliply can help as a partner in the process. Our IT consultants and senior service technicians have years of experience purchasing and negotiating with vendors to help you get the best deals. We can even help you create streamlined systems to manage and make sense of information gathered from multiple suppliers for easy decision-making. 

Procurement Software

Another common option is procurement software like NetSuite and Oracle, which are meant to help businesses organize information about their spending and quotes from vendors. 

However, the problem with this option is the software can have a learning curve and be more challenging to set up if you don’t know much about procurement. 

Single Procurement

Single procurement is where a business will typically negotiate terms with one supplier that they get all their computer equipment from. This system helps from an efficiency standpoint if you want to obtain new equipment quickly without searching through information about different suppliers. 

That said, single procurement costs you more money in the end. When you only purchase from one vendor, you don’t have much room to look for better deals or try to negotiate based on current market trends. 

Again, that’s why a team like Multiply can help. We can do the searching and negotiations for you to ensure you always land the best deals. 

What Are 3 Examples of Procurement?

If you’re still wondering what procurement looks like, here are a few examples. 

Example #1 – Personal Computers

A company’s accounting team has old desktops and laptops that they use daily. However, they are starting to run slowly and limiting the team’s productivity. 

Company leaders know that the computers must be replaced but aren’t sure which vendor will give them the best deal for their needs, so they decide to partner with Multiply to help. 

Multiply learns about the accounting department’s needs and identifies the specifications the new computers should have. They then research offerings from vendors and negotiate the best possible prices to stay within the designated equipment budget.  

Example #2 – Mobile Devices

A landscaping company has sales team members who work in the field visiting local businesses and residential areas to build their clientele. However, the mobile phones and tablets they use daily are no longer working as they should, making daily communication and client acquisition feel like a hassle. 

Unsure of where to start when procuring mobile devices, the company partners with Multiply. Upon learning of the company’s needs, Multiply gets to work learning what mobile devices will be the best fit while gaining an understanding of the company’s budget. They then negotiate with vendors to achieve the best possible deal. 

Example #3 – External Hard Drives

A company wants to purchase external hard drives for easy data transfer between devices and as a way to backup files. Upon beginning their research, they realize there are many different vendors, devices, and pricing options. Confused with all this information, they partnered with Multiply to help with the process. 

When Multiply gets on the job, they take the time to learn about the company’s needs and locate the right vendors that can help. They then negotiate the best prices for external hard drives and help the company set them up upon delivery.  

What Is an IT Procurement Plan?

An IT procurement plan documents the policies, procedures, and steps that will be used within your procurement strategy. That typically consists of:

• The organization’s technology needs
• Budget constraints
• Sourcing methods
• Vendor selection criteria
• A timeline for procurement

The plan ensures efficient and cost-effective acquisition of IT assets to support business objectives.

What Is an Example of IT Procurement?

A company needs to acquire 50 network switches for a data center upgrade. During the procurement process, they:

• Assess network requirements
• Request quotes from vendors
• Evaluate product specifications
• Select a supplier that offers reliable switches that meet performance and budgetary needs

By taking these steps, they can obtain affordable and effective switches. 

What Are the 5 Steps of the Procurement Process?

While planning the IT procurement process, it’s important to understand the steps involved. The five main IT procurement process steps are:

1. Identify the specific needs within the business
2. Find the right supplier 
3. Negotiate a fair price and terms
4. Document the newly purchased equipment
5. Manage logistics for equipment transport and setup

Within these five steps, many aspects must be managed. That’s why having a procurement team on your side to help is an excellent idea. It’ll free up your valuable time so you can focus on other essential areas of your business. 

What Is the IT Procurement Strategy Example?

A growing tech firm implements an IT procurement strategy to acquire IT hardware assets effectively. First, they assess their hardware needs, identifying requirements for laptops, servers, and networking equipment. A budget is set based on the company’s financial capabilities.

To ensure they get the best deals, they identify reputable vendors and send requests for proposals (RFPs) specifying technical specifications and performance expectations. A cross-functional team evaluates the RFP responses for quality, cost-effectiveness, and support services. After careful analysis, they select vendors that provide the best value for their needs.

The IT procurement strategy also includes a detailed timeline, ensuring hardware purchases align with project requirements and company growth plans. Contingency plans address potential delays or budget overruns.

This strategy helps the firm make informed and cost-effective decisions, enabling them to acquire IT hardware assets that support their business operations efficiently, stay within budget, and adapt to their evolving needs.

What Are the 4 Main Roles of Procurement?

If you’re still wondering why having a procurement strategy and team that can help is important, here are the four main roles of procurement and what it’ll help you achieve. 

• Sourcing: IT procurement will help you locate and source the right computer equipment for your company’s needs. 
• Negotiation: IT procurement teams are trained to negotiate with vendors, ensuring you get the best value from your purchases. 

• Contract management: When you form a contract with suppliers, your procurement team and policies ensure all ends of the deal are held up and the equipment is delivered on time. 

• Supplier relationship management: Procurement teams can help you build positive, ongoing supplier relationships. It makes it much easier to get new equipment quickly when sudden needs arise. 

These roles are why procurement is essential. If you’re looking for help with procurement, our team at Muliply can set up a strategy for success each step of the way. 

How Multiply Can Help

Multiply is a team of IT consultants and service technicians that partners with companies to help with IT asset and data management, including procurement. 

With years of experience in the field, we’ve refined ITAM strategies to help set companies up with streamlined solutions for success. We’ll help you purchase the right assets at the best price and negotiate with vendors, taking the hassle and stress out of the process.  

Contact us today to learn more about how Multiply can make a difference for you!