Procurement is a necessary process in running an organization, but it can be many moving parts. The right approach can streamline the procurement process so you can optimize your inventory, allowing you to focus on reaching your short- and long-term business goals on budget and on time. This article will demystify what goes into the procurement process and also discuss how your organization can simplify the process using a technology procurement partner.
Organizations need to buy products and services while staying within budget, keep an eye on when items should be repaired, replaced or liquidated, maintain relationships with suppliers and distributors, research and consider competitor products, and continuously evaluate its organizational needs.
Let’s take a deeper look at what factors come into play in the procurement process.
ADMINISTRATIVE COSTS
Before we get to the actual cost of the items purchased, there are the administrative costs related to procurement activities. This would include time spent researching products and services, negotiating, budgeting and meeting with stakeholders. The time spent on these pre-procurement activities is significant but necessary to ensure you’re doing your due diligence.
ACTUAL COST OF PROCURED ITEMS
Let’s say you need new laptops for your workforce. You shop around and find several suppliers that can sell laptops to your company at several different price points. Many factors go into deciding on what is the best option for your organization. The less expensive packages might make you more competitive in the market by lowering your costs but may be less reliable in the long run. There may be incentives or services that are bundled with the products you are purchasing. You’ll want to balance pricing with quality when placing orders.
INVENTORY MANAGEMENT
If you do your own procurement, you probably also manage your inventory. You’ll want to forecast in end-of-life for products so you can make sure your inventory is optimized. As products or parts move to the end of their life or become obsolete, you’ll need to repair and replace ahead of time to avoid downtime for your workforce or out-of-stock situations with suppliers.
QUALITY OF PRODUCTS
Speaking of replacing products, you’ll want to research new technologies and determine what investments are best for your company. There may be short term considerations like an immediate need for new laptops for the addition of a new team or long-term considerations like moving to the cloud. You’ll need to consider the durability, quality, and performance of the products and services that you’ll be purchasing to ensure that your technology investments are sound.
MAINTAINING RELATIONSHIPS WITH SUPPLIERS
Maintaining your goodwill and relationship with your suppliers is also important. You want to make sure that they can meet your needs within certain timelines and provide you with the best financing offers and available discounts. Building a long-term relationship will be beneficial for both sides.
PARTNERING WITH A TECHNOLOGY PROCUREMENT COMPANY
What if you could outsource the entire procurement process? By partnering with a technology procurement company, they manage the whole process to ensure that you’re making the best investments for products and services that will advance your business goals.
Having a technology procurement partner manage your procurement needs means your organization doesn’t have administrative time and money wasted on procuring new products. Your partner will also have long-standing relationships with suppliers so they can negotiate deals on your behalf that are on time and on budget. Additionally, your technology procurement partner can analyze your organization’s growing needs to advise you on what investments will deliver the best returns in the short and long run.
Find out more about Datavocity’s procurement and sales services today.
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