A strategic approach to IT procurement can help cut costs and improve efficiencies. The first step to taking a strategic approach to IT procurement strategy is assessing your current procurement maturity.
Strategic Procurement Part Two
Many enterprises have gained a strategic advantage by treating their procurement as a strategic function. Map out your procurement process and make sure it encompasses these best practices.
Strong procurement processes align purchasing decisions with corporate strategy, increase bargaining power with suppliers, and increase the value obtained from investments.
The key is determining when to put procurement through a detailed process. The dollar value of the purchase is always a strong indicator of strategic relevance. For example, ordering all of office supplies from one supplier at predetermined intervals can increase purchasing leverage. More obvious examples include replacing 50 CRT monitors with LCD monitors, purchasing 30 handheld devices, investing in a storage area network, or establishing a wireless local area network. To achieve maximum value from purchases such as these, a procurement protocol must be followed.
Add the following best practices to your current procurement procedures to minimize maverick spending, maximize operational efficiency, achieve substantial bargaining power with suppliers, and align purchasing decisions with corporate goals and objectives.
1.Establish the procurement goal.
oDefine the target consumer and the borders of the area impacted by the purchase as precisely as possible (i.e. dependencies on other projects, items and systems, the effects on business processes, etc.).
2.Define procurement requirements. The most important part of the procurement process is planning out the details of the purchase. Keeping in mind that even good plans are susceptible to change, it is essential to ensure thorough version management of the goal and plan during the whole process. The list of requirements demands completion of the following activities:
3.Tender the offer. The objective of tendering is to select a supplier, and agree with a chosen supplier on a contract that defines deliverables and the responsibilities of both parties. The following activities are required to complete this step:
4.Monitor supplier deliverables. This step aims to monitor the procurement objective as defined in the contract, i.e. to ensure that the deliverables conform to the requirements. Therefore, a defined number of contract status reports should be prepared during the project. The purpose of these reports is to minimize the risk of unfulfilled contract obligations, and to build a performance knowledge base of the supplier.
5.Complete the procurement. This task ensures that all outstanding issues regarding the procurement have been concluded to your satisfaction. Activities to perform include:
A strong procurement strategy aligns purchasing decisions with corporate strategy, increases bargaining power with suppliers, and boosts the value obtained from investments. In order to develop your procurement function, focus on processes and people.
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