The challenge for IT Procurement

Under pressure to reduce expenditure and find cost savings, IT Procurement departments need to find new ways of removing cost without damaging the business. The challenge is to find where IT costs are not directly supporting demonstrable business benefits. Some examples include eliminating unnecessary projects that won’t add real value to the business, delaying new system purchases where a ‘make do with what we’ve got’ attitude is acceptable, and to operate at the leanest staffing levels without  losing a skills base that will be required when the economy turns around. The ideal scenario is to find projects that improve efficiency, not reduce effectiveness. According to various surveys and validated by many Silver Bullet Associates clients, operational IT budgets are being cut between 6% and 10% this year. So IT Procurement have their work cut out. One project we see underway in several of our clients is reviewing whether any software or hardware costs are tied to the number of employees or users; if they are then there is an opportunity to re-negtotiate with the IT supplier and re-set the costs at a lower level. Another popular project is to undertake a full asset management review to make sure no-one is paying for what they don’t have or don’t use. And price benchmarking is increasing as IT Departments search for negotiable savings opportunities.  All you have to do is to dig deep enough as there is gold in them hills (of IT contracts).

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