Are you a business owner, busy executive, accounting/finance employee, or IT specialist? Overwhelmed by your organization’s IT purchasing needs?

 

PROFESSIONAL IT PROCUREMENT WILL SAVE YOU TIME AND MONEY!!!

Information Technology (IT) Procurement Specialists save companies, on the average, 20% of their IT- related purchases.  This includes purchases of Hardware (items such as computers and printers), Software (e. g. MS Office and Anti-Virus), Services (IT-related), and Consumables (such as printer ink/toner and back-up tapes).

A Canadian business, for example, with $10M revenue per year will spend around $300,000 for its IT needs (based on lowest estimates).1 If the IT procurement was done by a specialist, the company would have saved at least $60,000 on these purchases. Not to mention the employees’ time (and cost) that could have been saved.

Companies are constantly trying to get by with as few people in the procurement function as possible — choosing instead to focus on their "core" business. The shortage of manpower is usually made worse by lack of critical expertise in effective procurement. Instead of hiring procurement experts, organizations transfer personnel from other somewhat related units (most commonly accounting and/or IT itself) to serve as "purchasing professionals." The problem with this approach is that many of these “re-purposed” employees (as good specialists as they might be in their original occupation/capacity) are neither experienced nor trained in critical for this type of work areas such as:

  • Spend Analysis (collecting, cleaning, classifying, and analyzing expenditure data to reduce costs, improve efficiency, and monitor compliance)
  • Sourcing Strategies (ensuring  delivery of internal and external resources and services to meet business objectives)
  • Contract Negotiation (to maximize benefit and minimize cost)

 

Moreover, many of these reassigned employees do not have strong relationship building techniques, are unfamiliar with procurement methodologies, and lack the most critical skills — the in-depth knowledge of the IT goods and services they are supposed to buy and the best practices to acquire them at the lowest price, with the right quality, and delivered on time.

Although some large organizations do have an option to create a high performance procurement function, here's the dilemma: the time and money investment required to upgrade the procurement staff, processes, and technologies often far exceeds what most companies can or should invest given an existence of more viable and cost effective alternative.

 

This alternative to building up a company's in-house procurement capabilities is outsourcing, i. e. the use of a qualified third party that can give your company immediate access to top-notch professional IT procurement capabilities, including:

  • In-depth knowledge of the IT Industry and Trends
  • Relevant Technical and Product Skills
  • Established contacts and relationships with reliable vendors
  • Proven procurement methodologies and processes

Such expertise is a result of, literally, decades of continuous IT procurement practice.

 

In a survey conducted by IT market research firm IDC2, corporate executives from North American and European companies said they planned to increase the dollar volume of their procurement outsourcing by more than 50 percent during the next 12 months and eventually completely outsource the IT procurement process.

 

IT procurement outsourcing has gained favour because of the significant benefits it offers, which fall into three broad categories:

  1. More effective sourcing.  The right items and services are purchased from the right vendors at the right price, delivered at the right time.
  2. Better quality of purchased items and services. Access to reliable vendors and services providers have significantly reduced (to less than 1% of purchased items) returned, defective or below par purchases.
  3. Reduced cost of the IT procurement itself. By outsourcing this function to a qualified provider, organizations have quick access to world-class procurement capabilities with considerably lower investment and reduced ongoing operating costs.

 

To find out how your organization can take advantage from the above benefits please contact Pintacle Systems Inc. We have been in the IT Procurement business since 1982.

 

 

1. Financial Post, 2006

2. IDC, 2003