Canada, known as the Great White North, is home to some of the most technologically-advanced organizations in the world. But every year, Canadian businesses lose millions of dollars in potential savings by not optimizing their IT procurement.
While it’s tempting to forego this process to save time and effort, you’ll likely find that the money saved by the end of the year could be the difference between profit and loss. You might also be missing out on major savings and other benefits that could propel your business forward and leave your competitors in the dust.
To get your IT procurement on track, pay close attention to these eight ways to optimize your IT procurement in Canada right now. But first, let’s take a quick look at the meaning of IT procurement.
Before you can effectively optimize your IT procurement, it’s important to know what it is. Generally speaking, procurement refers to allocating goods and services that your company needs—and makes up a large portion of most companies operating costs.
In our case, we’re specifically referring to information technology (IT) procurement, which refers to purchasing computer systems or software for your business. In other words, if you use any computer systems or software, you should be familiar with IT procurement.
There are several benefits associated with optimizing your IT procurement. The most obvious benefit is reduced costs. By applying different best practices, you can eliminate redundancy and streamline your buying and sourcing processes. This will enable you to procure certain items for less money, but also save time on inventory management and logistics planning.
Also, by creating a formal process for keeping track of what you’ve bought, and when that item was purchased, you’ll be able to analyze your spending patterns over time. For example, if you notice that you tend to buy many hard drives from one vendor every six months or so, perhaps it’s time to consider another vendor with better prices who delivers every three months instead.
Now you already have a quick overview of IT procurement and why it’s important to optimize it. Let’s get to the main point of this article—ways to optimize your IT procurement.
Before choosing a particular technology solution, it’s important to first understand what your business needs. That way, you can assess whether a proposed solution actually matches your needs and how it will contribute to your organizational success. Whether you’re buying new hardware or software, an updated system will help you reach new levels of productivity and effectiveness.
It’s tempting for businesses to choose a company based on price alone. The price of something is important, but not everything. In fact, quality costs more—it’s an investment. If you don’t look beyond price, you might end up having difficulty with a vendor when their product doesn’t work or they go out of business. The benefit is that someone who charges more may also be able to provide better support or services than those who charge less.
When it comes to buying computer hardware and software, it’s good practice to get as many bids from suppliers as possible. Getting multiple bids ensures you can negotiate for lower prices. But even when you don’t have competition for your business, getting a few bids can help you make sure you’re paying a fair market price. So, do research, check with contacts at other companies or professionals in your field, and ask around.
Make sure your contract terms and conditions are flexible enough for your business needs. If you’re not sure about something, it’s better to build flexibility into your agreement. Be ready to adjust what works and ditch what doesn’t—which might save you time, money, and energy down the road. This is especially true when dealing with customers who aren’t signed with a single service provider but choose multiple different ones instead.
A TCO is an acronym for Total Cost of Ownership. A TCO/TCO attempts to capture a business’ total cost over a given period of time. Calculating your TCO is crucial because it gives you a clear picture of what your costs will be from beginning to end. It also allows you to make informed decisions about which procurement strategy might work best for your company.
No matter how much due diligence you do before sending out a Request For a Proposal (RFP), there’s always a chance your organization will get it wrong. So, keep things simple, be transparent, and avoid falling into any of the common traps when asking potential partners for information about their services or products.
It’s important that both parties are clear on what exactly is being asked of them, so make sure all questions are specific and clearly stated upfront. Remember, the more open you are with vendors about what exactly you’re looking for, the better off everyone will be in terms of time management and resources spent.
Assess your vendors regularly for best performance and service levels. Also, evaluate which services you’re receiving from your vendor and if it’s worth paying for them. Ask yourself: are they providing a value-added service that I can’t perform in-house? This can be valuable when determining whether it’s worth keeping an existing agreement, or if there are options available where you can get similar services at a lower cost.
Rushing for an early win may seem like a good idea at first, but it could have unintended consequences. In most cases, it’s better to take things slow and minimize risks by not pushing too hard on metrics and Service-level Agreements (SLAs) until you have your sea legs under you. It’s okay if users aren’t getting exactly what they need immediately—just make sure everyone’s working together towards common goals.
In today’s competitive business environment, it’s important that you have access to top-notch technology. To remain competitive and ensure your organization gets maximum value from its technology investments, you need a streamlined procurement process that can help you do business with vendors quickly and affordably. So, follow the optimization tips above and choose software that align with your business’ needs and goals.