Glossary What is Technology Procurement?
By null / 1 Jan 2023 / Topics: Procurement
Technology procurement, or IT procurement, is a set of processes organizations follow to purchase IT resources — including hardware, software and cloud technology. Technology procurement is an extension of standard business procurement processes. This typically starts with the need for a product and follows a series of steps, including invoicing, payment and delivery.
Procurement processes are designed to support entire organizations or individual teams, departments and locations. A single individual or multiple teams can directly control and manage procurement processes. Effective technology procurement processes should provide flexible resources to help an organization follow its own best practices for procurement.
Many businesses use Enterprise Resource Planning (ERP) software to control their procurement processes. These platforms are critical to efficiently managing your procurement purchasing.
Establishing technology procurement processes
IT departments must be involved in developing the technology procurement process to ensure standards, data requirements and application security levels are maintained. However, the IT department doesn’t necessarily have to manage day-to-day procurement activities.
Selecting a technology provider or group of technology providers is a necessary first step to starting your technology procurement program. Organizations will want to find a technology provider that can help them achieve their goals and meet budget needs — while also providing easy-to-use online tools that support the process, such as an e-procurement platform.
Businesses can work with an Original Equipment Manufacturer (OEM), software publisher, value-added reseller or a Solutions Integrator to support technology procurement. To find the right partner, it’s best to go through a vetting process that involves requests for information, requests for proposals and requests for quotes.
The partner you choose should also offer a procurement platform that offers customizable features, including:
- Personalized user accounts
- Order tracking
- Saved carts
- Product comparison
- Invoicing
- Custom catalogs/company standards
- Reporting
- Lifecycle management
This procurement platform should also be able to integrate with your ERP software easily, so your organization can manage its procurement from a single location.
Technology procurement steps
With your procurement partner selected, it’s now time to establish the steps involved in your IT procurement process. Many organizations can negotiate with their technology partner on price and establish a pre-defined list of technology products that procurement managers and teammates can choose from when they need technology resources.
Step 1: Building your catalog
Creating a custom view of what products are purchasable by your procurement team helps simplify IT management, security processes and makes controlling costs easy.
Step 2: Establishing an approval process
Once the price and products are defined, your organization will want to establish an approval process. This can involve as many steps as needed to ensure compliance with internal requirements. You’ll want to make sure that the approval processes are as automated as possible so that purchases can happen quickly — meaning your procurement platform should handle any communication and decision-making support. For example, once an item is selected to be purchased, the order gets automatically routed to an approver. You should not handle approvals individually through your own email system, or even use a physical paper trail.
Step 3: Giving users access
With the approval process in place, you can now begin providing account access to internal teammates and procurement managers.
Account access should give users different types of capabilities based on their role. For instance, your managers should have admin privileges where they can set up accounts. Individual procurement teams should only have views that support their job function. You can even set up your system to give employees some self-service IT purchasing capabilities.
Step 4: Monitoring and tracking
As purchases are made, your organization should have reliable access to order tracking tools. As orders come in, you can review reporting data for your purchases. Common reports include detailed views into the manufacturers you purchase, when software renewals are due and what users or user groups (such as a branch location) are making purchases.
Automated procurement
For some organizations, a standard procurement process that includes approvals, custom catalogs and more can be complex. Automating steps by working with a partner who offers a seamless purchasing experience can be a great option to create efficiency.
These types of procurement platforms can resemble a consumer online purchasing experience, where teammates can simply find and compare products, add them to the cart and complete the purchase. No approvals or reviews are required — but approvals can be implemented in these experiences with ease.
