Direccion Y Fotografia

Develop an IT Procurement Category Plan to Reduce Cost, Manage Risk and Improve Productivity
Published: 28 September 2012 Analyst(s): Guriq Sedha

A robust category plan can help IT procurement deliver on the strategic objectives of IT infrastructure. Procurement professionals can use this research to develop category plans that will benefit their organizations.

Key Findings
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ITprocurement directors are challenged to understand the key procurement processes required to efficiently and effectively procure IT products and services for the organization.

Recommendations
IT procurement directors should:
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Initiate a category plan with clearly defined categories and subcategories that aligns with organizational goals and stakeholder engagement. Use a detailed spend analysisas an anchor for category planning. However, you must stay focused on the current and future needs and wants of the organization. Develop options to address the underlying challenges of each category, build on market opportunities and minimize risks. Research and analyze supply-market dynamics then capitalize on what you know about this category to anticipate future challenges as well as developrealistic strategies. Follow through to ensure successful implementation. Reach out to stakeholders to educate them about how a category plan can benefit the business, and engage them in tracking and reporting benefits. Adjust the category plan according to new information that emerges.

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Analysis
IT procurement environments are complex, given the number and variety of technologies thatorganizations deploy over time. Many factors heighten that complexity, such as multiple vendor

This research note is restricted to the personal use of jesus.rendon@itesm.mx

This research note is restricted to the personal use of jesus.rendon@itesm.mx

relationships, numerous complex contracts and amendments, diverse commercial models and expensive termination clauses (for example, notbeing able to cancel at your convenience or unrealistic termination fees). Category planning is critical to IT procurement's value to the business. Done well, it can help you reduce costs, manage risk, improve productivity, or a combination of these things. While you can't address every issue in a complex environment at once, developing a category plan will lay the groundwork for a more strategicprocurement team that is able to clarify the organization's needs and wants, understand supply-market complexities, and build on opportunities while minimizing risk. This research guides IT procurement directors in category planning based upon questions we have received from Gartner clients.
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Categories of Procurement
IT procurement's most common categories are hardware, software, professionalservices and telecom. These categories are usually complex enough to be subdivided based on spend analysis or the transformational objectives and opportunities of the organization. Because multiple devices are available to internal users, and because many applications are now delivered via cloud, many organizations are redefining categories to align with their internal customers' needs. Forexample, "end user computing" might be a category that includes a user's desktop, mobile devices and other associated technology components. If procurement treats cloud applications as a category, it needs to understand cloud market dynamics, potentially beneficial cloud opportunities and issues that affect cloud contract negotiation and key cloud-related terms and conditions. Classifying "cloud" as aprocurement category helps to align procurement with the organizational cloud strategy and promotes a closer relationship with IT strategy and business unit teams. Defining categories based on user needs helps procurement professionals understand the market from the internal end-user perspective and develop and deliver a plan that delivers the most value from procurement practices. It's...