Published on
15 June 2023
Read time
3 mins
Business strategies and operations rely on the IT infrastructure in place to drive success and a company will typically spend a substantial amount of their indirect supplier budget on IT hardware, software, and professional services.
With this level of spend in mind it is essential that businesses implement a suitable IT supply strategy to ensure successful supplier relationships, best value for money and supply efficiencies.
Reactive buying practices are inefficient.
Most businesses do not have a supply strategy to support the purchase of their ad-hoc hardware and software requirements. The process surrounding the purchase of goods and services is often unplanned, reactive, and generally quite chaotic. This approach is only to the detriment of the customer. From market analysis we have identified that reactive buying practices can lead to increased supplier profit margins, ranging from 12 – 14%.
From a customer perspective, to achieve the greatest value from suppliers, it is imperative that a proactive and governed supplier relationship is established. Working together with a supply partner will drive stakeholder requirement transparency, improved quality in service, best value supply routes and sufficient escalation routing.
Supplier partnerships apply benefit to the entirety of the procurement process:
- Suppliers are notified of a requirement by a business stakeholder, the supplier supports the creation of the specification.
- Supplier provides free consultancy and guidance on technology developments.
- Service levels are implemented, holding the supplier to account on quotation and delivery timings.
- Commercial frameworks are agreed, providing the customer with the assurance that they are receiving the best value for money.
- Additional commercial benefits may be considered, potentially in the form of rebates.
- Quality levels are managed via the supplier account team with a defined escalation process in the instance any issues arise.
- Planned supplier relationship reviews are planned to discuss reciprocal process improvements and general honest feedback.
Ask yourself this - do you have a sufficient IT supply strategy in place and are you benefitting from the above efficiencies?
7 Step Solutions specialise in supporting the implementation of IT Supply Strategies. Within the past six months, we have conducted market analysis to identify who we see as the most beneficial supply partners right now. It would be our pleasure to assist you with the transition from reactive procurement to a strategically managed supply chain.
Richard Fotheringham
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