What is IT procurement

IT procurement is the systematic process by which organizations research, select, and implement technology resources and services to meet their organizational needs effectively. These resources include hardware, software, and other essential services to meet an organization’s operational needs.

IT procurement process often involves:

• Identifying the technology needs of your organization
• Conducting market research
• Identifying vendors and nurturing relationship
• Negotiating contracts & identifying opportunities to save cost
• Overseeing the delivery and setup of IT resources
• Ensuring IT compliance with regulations
• Aligning your organization’s IT spending with your business goals
• Managing the lifecycle of IT assets & cost of ownership

IT procurement is not just about making buying decisions. It involves making the best decision possible to invest in the right technology resources to meet your business needs. It also entails different departments (such as HR, finance, and IT) working together to invest in your organization's IT assets.

Why is IT procurement important for businesses?

Whether you have a remote or hybrid work environment, IT procurement equips your employees with the necessary technologies to do their work effectively.

Acquiring new solutions that integrate seamlessly with your current tech stacks can help you save IT costs and facilitate a smooth workflow. This enables you to avoid unnecessary maintenance costs when managing multiple software. With a robust integration system, your IT systems can work side by side for a seamless experience.

Having a systematic process for procuring IT assets means there’s a standardized process for identifying technology resources needed in your company and vendors that can provide you with these resources at the best price. This process also ensures that you’re investing in the right IT assets for your organization.

Organizations with a global team can leverage IT procurement to acquire technology that streamlines collaboration, regardless of their time zones. This includes video conferencing, project management, time management, and inventory management tools.

Additionally, IT procurement allows you to invest in flexible solutions that adapt to changing business needs, such as cloud services and software-as-a-service (SaaS) solutions.

What are the main challenges of IT procurement?

Some key challenges include:

Vendor selection

Many vendors offer similar products or services, so identifying the one that meets your business needs can be time-consuming. To make an informed decision, you must evaluate the vendor’s compliance standards, costs, reputation, and capabilities, which can be frustrating.

Regulatory compliance

IT compliance standards usually vary by location and industry. However, purchasing IT assets from suppliers without standard certifications and failing to meet regional and internal legal requirements could result in downtime and attract fines.

Logistics

Delays in the deliveries of IT assets can lead to setbacks in project timelines and impact team efficiency in a global workforce.

Acquiring IT assets from vendors with custom compliance features can be challenging for an organization with a distributed team.

Security risks

Compliance standards aim to strengthen your information security system against threats and attacks.

Acquiring IT assets from suppliers that don’t comply with standards could make you vulnerable to these security risks.

Cost management

When deciding on vendors and purchasing, it’s very common for you to struggle with finding the right balance between costs and the pursuit of high-quality IT assets, especially with budget constraints.

Lifecycle management

Navigating devices across multiple locations without automated tools could be challenging, especially if you have a remote team.

Relying on an ineffective device management solution could put you at risk of noncompliance with data protection laws across regions. It also makes it hard to track and manage IT assets from the procurement to decommissioning stages of lifecycle management.

How can businesses identify reliable IT vendors?

To identify reliable vendors, you should:

• First, recognize your IT needs and requirements. To do this, evaluate your current tech stack and identify areas for improvement. This will let you determine the tools to maximize productivity and operational efficiency.
• Audit vendors for information security certifications such as ISO and SOC 2
• Ensure the vendor adheres to security and privacy standards like GDPR or CCPA
• Evaluate the vendors handle sensitive data and the cybersecurity measures
• Going through reviews and case studies from other organizations with first-hand experience with the vendor can help you make informed decisions
• Use procurement platforms and publications to streamline vendor comparisons
• Starting with a trial order or plan will help you evaluate their performance before you make a long-term commitment. It will also help you determine if the vendor is the right fit for your company

What role does compliance play in IT procurement?

Compliance ensures that the procured IT assets meet specific legal, safety, and environmental standards. When a vendor fails to comply with regulatory standards, your business is exposed to fines, delays, and reputational damage.

For example, hardware vendors must comply with regulations such as Restrictions on Hazardous Substances (RoHS). The compliance standards protect against the emission of hazardous substances such as lead, mercury, and cadmium, which can result in serious health and environmental problems.

On the other hand, software vendors must adhere to regulations like GDRP, which safeguards against data breaches and security threats.

How can companies manage risks associated with IT procurement?

Effectively managing IT procurement risks is critical to ensuring smooth operations and protecting your organization from supply chain disruptions, compliance issues, and security vulnerabilities. Below are key strategies to minimize risks and improve procurement outcomes.

Diversifying your supplier network

Relying on a supplier can put your operations at risk. Anything could go wrong, and your business would pay the price. The supplier could go under overnight because of bankruptcy, acquisitions, or mergers, which could disrupt project delivery.

However, diversifying your supplier could mitigate the risk of supply chain disruption. You could easily fall on your alternatives when a supplier fails to deliver.

Negotiate a better deal

Negotiating helps reduce acquisition costs and mitigate risks associated with procurement. It involves defining mutually acceptable terms and conditions with your vendor. Some negotiation points you should consider include cost, contract length, delivery timeline, performance metrics, and compliance with standard regulations.

Negotiation usually happens after you’ve handpicked a couple of vendors and before signing any contractual agreement. It’s important to keep your options with other vendors during negotiating; this will help you decide on the perfect deal for your organization.

Supply chain monitoring

Monitoring the supply chain refers to overseeing supplier shipment from the time an order is placed to the time it’s delivered to your doorstep. This helps identify potential delays that could disrupt your business operations.

When you anticipate disruption in a supplier’s supply chain system, you can develop a contingency plan to diversify your network. Evaluating a supplier’s performance records and financial stability can help you spot potential risks early on.

Have an open communication with your vendor

Open communication with your supplier ensures that both parties work together to achieve a common goal. It also helps you identify and avoid potential bottlenecks that could disrupt your business operation.

You can communicate openly by clearly defining and communicating your expectations on delivery qualities and schedules. Frequent check-ins and updates also help you stay informed on order progress and supplier operation changes.

Invest in lifecycle management

Using a lifecycle management tool can help you utilize resources effectively, manage risks, and enhance the quality assurance of your products or services.

Lifecycle management focuses on maximizing the efficiency and productivity of IT assets from the moment they are acquired to when they are recycled or decommissioned.

Investing in software like Deel IT with lifecycle management helps you comply with regulatory standards and mitigate data breaches.

More importantly, it ensures your devices run smoothly and reduces downtime,

One of the best lifecycle management practices is replacing outdated devices with newer ones. This helps you keep up with your operational needs and technological advancement.

How to evaluate the effectiveness of IT procurement

Metrics for assessing IT procurement include:

• Cost savings: Comparing your budgets with actual expenditures in IT procurement can help you cut costs. This way, you can help you identify overspending and allocate your resources efficiently
• Delivery performance: Evaluating how a supplier meets your delivery requirements is an effective way to mitigate disruption risks. When evaluating delivery performance, you should look for metrics like on-time delivery rates, lead times, and order accuracy
• Compliance adherence: Policy compliance ensures that a vendor operates within the scope of the regulatory standards. Assessing a vendor’s compliance helps you avoid financial repercussions and operational inefficiencies from non-compliance
• Total cost of ownership (TCO): Evaluates the overall cost associated with the ownership of IT assets throughout their lifecycle. Some TCO components include purchasing, installation, maintenance, and operating costs
• Asset utilization: Assess how effectively procured IT resources are being used

How does IT procurement impact HR teams?

IT procurement plays a significant role in onboarding and equipping employees with the necessary tools. HR teams often leverage IT procurement to:

• Protect sensitive employee data, including personally identifiable information (PII), financial details, medical records, and insurance details. This helps HR reduce the risk of non-compliance with data privacy standards
• Streamline onboarding and employee management processes by integrating devices with HRIS platforms
• Standardize hardware and software for distributed teams. This streamlines team collaboration and IT support for a global team workforce
• Equip each department or employee with devices to perform their roles efficiently
• Manage and track employee accrued PTO, reducing the risks of human errors

How can IT procurement support remote and hybrid work setups?

Effective IT procurement ensures employees are accessible to high-quality tools, regardless of location. When you partner with global vendors and leverage platforms like Deel IT, here are ways IT procurement can streamline your work:

Round-the-clock IT support

Employees will likely encounter roadblocks with their IT assets, such as data loss or user account issues. When this happens, they need timely assistance from a dedicated IT helpdesk.

As an organization with a distributed team, this could be a significant challenge when you have employees working in different time zones in need and IT professionals trying to offer virtual support.

Deel IT offers flexible, round-the-clock help support to workers worldwide, regardless of their time zones.

Ensure Compliance

Keeping up with different local and international regulatory standards is integral to IT asset management. Yet, it could be a great challenge for organizations operating globally. Deel IT offers in-built guidance on regional data protection measures, which mitigates legal risks and ensures compliance.

Deel IT standardizes compliance on every device, allowing procurement managers to maintain a holistic approach to data privacy in accordance with regional standards.

Global device deployment

As an organization with a distributed team, supplying devices to employees across the globe can be challenging.

However, equipping remote workers with devices doesn’t have to be complicated. Deel IT’s zero-touch deployment pre-configures devices ready to use, eliminating manual setup and ensuring consistency across all devices. This can also streamline onboarding and enhance your team's productivity.

Standardize devices and software

The goal of standardizing your devices and software is to ensure uniformity in IT practices in an organization.

Acquiring IT assets that do not match operational needs or are incompatible with existing systems can be difficult and expensive to manage. Tthis means extra expenses for maintenance, support, and training employees.

Deel IT standardize your devices and software across departments, which ensures and make it easy to track and manage global operations from a centralized system.

How can businesses balance cost savings with quality in IT procurement?

Balancing cost and quality requires:

• Evaluate total cost of ownership (TCO) instead of upfront costs incurred on IT assets
• Assessing vendors' track records of reliability and compliance to find the right one for your organization
• Reviewing vendor contracts can help you optimize costs. It enables you to spot hidden fees, operational inefficiencies, potential non-compliance penalties, and opportunities to save money
• In the case of procuring hardware, you can save money by opting for leased or refurbished devices, especially if it’s needed temporarily

How Deel simplifies IT procurement

Procuring IT resources for your organization doesn’t have to be complicated. Deel IT simplifies IT operations for distributed teams, cutting the cost and hassle of procuring and managing equipment.

With Deel IT, you can:

• Source, track, and manage IT assets with a centralized platform
• Partner with trusted vendors to provide pre-configured devices with global delivery
• Integrate IT procurement with HR workflows, ensuring employees receive the right tools to perform their tasks efficiently.
• Adhere to regional regulations through certified data erasure and secure device recovery.

To learn more about Deel IT’s IT procurement solutions, book a demo today.