“How can you support us in reaching our development, financial and growth goals?” This is the question that many organisations and their procurement departments ask when looking for a technology partner like us.
So how can the right supplier help the procurement department reach its goals?
Procurement department goals and objectives
The goals of procurement departments vary depending on the specifics of each organisation, however there are broad areas of responsibility that will be common for most. These include:
- following the procurement strategy and ensuring it is aligned with the main business strategy,
- ensuring cost effectiveness and increase in profitability,
- supporting business continuity,
- ensuring competitiveness and growth,
- ensuring compliance with legislation, standards and company policies,
- increasing business efficiency.
Procurement goals in 2022
The Procurement Mag lists their top ten procurement goals for 2022. These include:
- Understanding your supply chain
- Avoiding risks and making sustainable choices
- Adapting procurement best practises
- Growing relationship with vendors
- Getting leadership on procurement side
- Collecting insights to support business goals
- Maximising cost savings
- Cleaning up data
- Using new technology to lower costs
- Focusing on professional development
Both the generic and the more specific 2022 goals are influenced by many factors and by the actions of other departments beyond procurement. However, because of its strategic role within organisations, procurement departments have significant impact. Especially when it comes to the key roles some of the suppliers chosen by procurement departments play in organisations.
Selecting IT and tech services suppliers – a super quick guide for procurement
To allow your organisation to gain advantage from its tech services provider – be it in terms of improving efficiency, increasing its profitability or giving your organisation a competitive edge – what needs to happen first and foremost is a choice well made. It’s simple – to support your department’s and your organisation’s goals, you need to select the right suppliers.
Because tech is pivotal to organisation’s success nowadays, the big question is: how do you select the right software and technology consultancy provider?
You are an expert in procurement, so you know all the ins and outs of the procurement process documents. There is danger, however, that when using generic procurement templates, the specifics of the technology and software development industry will be omitted.
We therefore recommend using these templates dedicated to the procurement of the software development and technology consultancy, and to the outsourcing of software services.
- RFI template for Software Development
- Technology vendor selection and evaluation tool for Procurement
- RFP template for Procurement – purchasing software development services
- NDA
- A guide on what to include in an IT contract
How can Procurement check a potential technology partner?
Of course there are many other tips on selecting the right partner. For example, to ensure regulatory compliance, it is worth asking your potential suppliers to complete a Due Diligence Questionnaire for software outsourcing. The questionnaire covers seven key areas that reduce the risk of selecting an inadequate supplier of outsourcing services. You may also consider doing a separate IT Security Assessment Questionnaire. Both have been created specifically for the purpose of purchasing technology and software consultancy services.
Once you’ve used all the tools mentioned above, you can be sure that the procurement process has been done stringently and that the suppliers have been screened well.
A good technology partner – supporting your goals
So back to the way in which a great supplier can support the Procurement department’s and your organisation’s goals. The right technology partner will be able to efficiently support your organisation’s goals on many fronts.
For instance, for the supplier to support your company’s goal of maintaining business continuity, ensuring its competitiveness and growth, and of increasing its business efficiency, you need a supplier who:
- is large enough to give your company scalability and ability to scale up or down,
- has additional skills under one roof – not only software development but also UX, product design, security, cloud or DevOps, etc.,
- has methods in place to estimate and manage IT projects well,
- is proactive, expert at what they do and willing to share their knowledge,
- is able to adjust their ways of working to match your organisation and its culture,
- is experienced in your sector (and/or has extensive experience in various types of projects).
For the partner to support you in ensuring compliance with legislation, standards and company policies, go for a provider who is compliant themself and has mature processes that lower risks for their and for your organisation. You can check this using the Due Diligence Questionnaire.
When it comes to ensuring cost effectiveness and increasing your company’s profitability – think quality over price. Vendors who are cheaper may pay their engineers worse, and not invest in people and their development. This results in higher staff turnover which, means lower quality of developers and a negative impact on the software product they create for you. So, for the partner to support your goal of cost effectiveness, look for companies who can keep their engineers and have good employee attrition rates, thus holding on to the investment made in their tech and domain knowledge. Such a partner will provide more added value. Their prices may be higher because they probably:
- modify their service portfolio as customers’ needs change,
- invest in people to maintain low turnover and keep knowledge inside their organisation,
- keep a buffer of people available to scale up and down,
- invest in training to ensure people are up-to-date with both technology and soft skills,
- have a good structure to support engineers in their work (e.g., PMO, UX, tech support and premises teams).
How can the right supplier support 2022 procurement goals?
Looking back at the Procurement Mag top 10 procurement goals for 2022, the right supplier could support your department and organisation in the following goals in particular.
- Avoiding risks and making sustainable choices – go for a supplier who will provide satisfactory answers to the Due Diligence Questionnaire and one who takes care of the environment.
- Grow relationships with vendors – select a supplier who has a partnership approach and is focused on long-term relationships with clients. Investigate their ways of delivering value to customers.
- Collecting insights to support business goals – a good technology partner will be able to provide extra value, in form of data, insights, technology advice – go for companies who have a knowledge-sharing approach and have solid business analysis backgrounds stretching beyond software development.
- Using new technology to lower costs – if you feel your own systems are lacking and, at the same time, you have a promising software development company that your IT department wants to work with, why not ask them to tackle your system too? Go for companies strong in data, cloud, software product design and of course development.
Conclusion
For a supplier to properly support the procurement department and your organisation’s goals, the key is the choice of a reliable supplier, able not only to deliver on what was agreed, but also go the extra mile and offer additional value. Look for those organisations who focus on long-lasting partnerships and delivering worth over an extended period of time. The longer the collaboration, the closer the relationship gets and the more aligned the organisations become.
Hopefully, with the templates provided above your procurement department will have gained a set of valuable tools for your technology supplier toolbox.