IT Procurement: 5 Things You Need to Know

Modern procurement routinely requires client organizations to obtain needed goods and services while reducing costs. This process generally involves the client extending its influence over its suppliers and the spending of its own workforce. A common approach to this goal is to provide purchasers with tools that allow them to find what they need from an approved supplier, allowing the client to realize the savings that it has already negotiated with the supplier. The services that clients are seeking with IT procurement generally include source-to-pay technologies through a cloud platform with capabilities such as support for mobile devices and embedded analytics. This process requires you to consider issues in the following five areas:

• Strategy
• Insight
• Efficiency
• Collaboration
• Compliance

Strategy

The greatest value that procurement has for an organization is the ability to identify suppliers and evaluate the ones that offer the best value. Procurement also has the potential to reduce the client’s costs by diligently negotiating with suppliers. However, this strategy requires the client to possess the technology needed to ensure that purchases throughout the organization comply with the negotiated contract terms. Compliant purchasing will eventually translate into an improved profit margin for the procurement process. Clients should also use technology to automate the payment process, thus allowing personnel to spend more time in procuring IT services.

Insight

Procurement officials need insight into their organization’s business processes to make the best decisions. This insight is more beneficial when it’s delivered to mobile devices, allowing them to make those decisions at any time and from any location. Graphical presentations are particularly useful for comparing criteria between suppliers to identify those that provide the best value for the organization. Procurers can also obtain insight into business processes with embedded analytics, thus allowing them to manage their negotiations in real time. These capabilities increase their productivity by enabling them to make buying decisions more quickly.

Efficiency

An efficient procurement process increases purchase compliance and cost savings. The key capabilities of such a process include automation, collaboration and an effective workflow. User experience is one of the primary drivers of efficiency in procurement, so the workflow must be intuitive and easy-to-use to ensure rapid adoption. Easy navigation allows users to find what they need more quickly and therefore reduce processing time. It also lets users complete their work faster by helping them prioritize their actions.

Collaboration

The modern procurement process requires extensive collaboration. Traditional methods of communication such as e-mail and telephone inhibit collaboration since workers often miss calls and spend time locating a particular e-mail message. Procurement applications typically rely on collaboration through in-context social collaboration that embeds a conversational stream within a transaction screen. This capability allows the cross functional team to share information more easily and collaborate with other departments to negotiate contract terms. Additional collaboration capabilities of procurement applications include receiving requests for proposals (RFPs) and sending purchase orders to service providers.

Compliance

Procurement applications that enforce compliancy reduce contract leakage by ensuring that users buy only through approved suppliers. They also simplify procurement by using document templates to guide users through the process of creating a contract. Furthermore, they decrease workload by generating deviation reports that describe the differences between the contracts and template. Procurement applications also help to streamline the procurement process by generating robust audit trails to enforce purchase behavior.

IT procurement is transforming rapidly from adversarial purchasing and cost savings relationships to strategic partnerships with vendors focused on business outcomes. To learn more about what Wavestone US can do for your company, click here.