5 Ways to Reduce IT Costs – Procurement, Supplier & Contract management

5 Ways to Reduce IT Costs – Procurement, Supplier & Contract management

  1. Robust Procurement Processes

Whether your company has a procurement department or policy, CIOs can easily employ good procurement principles, when investing in any software or services.

A procurement matrix can be as simple as:

  • Compose a procurement matrix, describing what you are looking for.
  • Insert “must have” features for your service and “nice to haves”.
  • To seek a quote, draw up a detailed spec.
  • Research the market and identify the top 5 suppliers. Send the same project brief to them all.
  • Map all the supplier prices or responses across your matrix.
  • Ensure that you go for the product that matches closely to your brief, not just the leading brand, (“best of need” not “best of breed”).
  1. Be aware of supplier markup

We all understand implicitly the value of a broad and robust ecosystem in delivering services; no man is an island after all, however, it’s also true to say that not all mark-ups are created equally. Knowing what services you get from whom is crucial to good financial management.

  1. Reconcile all your contracts

With all the company acquisitions that take place in the IT world, you can save 5-10% on your IT costs through incorrect contracts that have been non-consensually updated when a company is bought out.

  1. Map out your contract renewal dates

Being aware of contract renewal dates and doing an early procurement exercise not only helps you drive your IT strategy, but also puts you in a position of power to renegotiate your contracts as they renew.

  1. Setup an existing supplier matrix

When benchmarking and grading suppliers, don’t forget to include things like complexity and time to manage them, SLAs and hidden charges etc.

Accordant Solutions are a team of IT Consultants offering IT Financial Management (ITFM). We have extensive experience in helping customers through tendering and procurement processes, and have developed our own IT cost savings software, typically saving our clients 30% on their IT costs, whilst improving the quality and value of IT services. Call us now on 0800 118 2390