IT, or information technology, is an essential department of every organization. Especially in today’s digital era, modern businesses need to invest in an IT vendor or create in-house solutions themselves. Oftentimes, though, businesses choose to outsource IT services and bring in external teams. This makes IT supplier management a must. As such, the responsibilities revolved around procuring and managing an IT vendor or supplier most commonly falls to, you guessed it, the procurement department.
Procurement is already an organization-wide activity that affects virtually every aspect of daily operations; and as such, it makes sense that they would be involved in vetting and sourcing an IT vendor to contract as well. IT services aren’t only vital to connecting and creating a digital presence in the virtual economy that has emerged; but also serve as a defense system. While it isn’t a pretty side of the business world; cyber-threats are a very real aspect of conducting business in today’s market; further emphasizing the necessity of a reliable and capable IT vendor, supplier, or team.
IT Supplier Management Tools
Supplier management in most procurement departments is handled through a series of software that eases the manpower required for operation. Additionally, these software’s aim to boost productivity, reduce cost, and provide stronger data that yields more insightful impact. As such, IT suppliers can be managed through the same series of software, such as procure-to-purchase and contract management programs.
Contract Management for IT Vendor Management
Contract management software is a very popular tool in procurement. In fact, it’s really the bread and butter for many procurement professionals; contract managers, especially. Contract management software is a powerful and sophisticated procurement tool that offers the user a suite of user-friendly features to ease the entire contract management process.
Modern contract management even implements AI, utilizing artificial intelligence to optimize the process. One of the ways AI is utilized within contract management software is through data entry, analysis, and reporting. The reason this is significant is that when it comes to procurement contracts, the language is complex, terms can be a labyrinth to navigate, and the upfront cost is rarely an indicator of true lifetime value.
With AI and contract management software, though, much of the monotonous data entry and data analysis is automated, leaving your contract manager with powerful and impactful data that provides deep insights into the existing and potential contracts of the company.
Just like with vendors and suppliers providing raw materials for production or services for daily operations, IT suppliers, and the contracts they come with, need to be monitored and carefully tracked. There is a lot of valuable insight that comes from contract data relating to vendor performance, redundant contracts, and other areas of cost-inflation that can be addressed with access to the right data.
Procurement and IT Supplier Management
Every organization needs some level of procurement practice; any modern organization requires IT support. Thinking through how procurement strategy and IT supplier management play hand-in-hand, it’s clear that, especially in a mostly digital economy, an e-procurement strategy relies heavily on a robust IT supplier.
Since many procurement best practices and operations revolve around the utilization of procurement software and e-procurement tactics; lacking an IT supplier will greatly hinder your firm’s technical capabilities, leading to outdated processes and an ineffective procurement team. Establishing a relationship with an IT supplier that you trust early on in your organization will set your company up for long-term technological success.
Additionally, finding an IT provider to partner with from the early stages hopefully means that they’ll be able to scale with you and the needs of your company. One of the main benefits here being that creating a long-standing relationship with an IT provider will make transitions easier, as they’ll be familiar with your infrastructure from day one.
ITIL, information technology, and infrastructure library is a growing industry. In fact, it’s been a thriving industry over the past pair of decades, as more and more companies embrace the transition into a more digital economy worldwide.
For more information on how IT supplier management and procurement relate to one another, or anything else procurement, keep browsing ProcurePort. ProcurePort is the internet’s premier place for everything procurement from software and technology, to information and knowledge, and everything in between.