IT Buyers Need To Buy For Today And Tomorrow

Buying IT

The business estimates that 70% of private and public sector IT buying for consumables, desktops and printers is conducted on a day to day demand or reactive basis. This is in the context of a highly volatile IT supply chain where price and stock change daily. When there is a requirement, the ICT buyer – who often multitasks as an IT manager or procurement champion – contacts suppliers, potentially benchmarks prices and makes a purchase.

However, the Japan Tsunami and Thailand floods have significantly impacted component and finished product delivery, shortages and ultimately price hikes. Hard Disk Drive shortages from the Thai floods are still being reported as impacting supply of lower end cheaper laptops, desktops and servers.

Buyers demanding such items reactively are having to settle for more expensive, higher end products where stock is available. So, natural disasters’ impact has brought into sharp focus the acute underperformance of a reactive ad-hoc approach to buying.

A lack of forward planning is impacting IT procurement budgets, yet this could be overcome as regular buy or larger one-off purchases can be forecast to a large degree.

Now is the time for buyers to kick-start a longer term best practice strategy and forward plan buying to genuinely buy more for less whilst maintaining fulfilment of demand and therefore business continuity. The reactive view is costly and it must change.

Buyers need to analyse average purchase volumes on key routine items and put in place monitoring facilities or alerts that enable them to watch stock and price levels. When stock or price move towards critical levels, the purchaser knows to act proactively and at the best price. In this way, purchasers can reduce risk and minimise costs and threat to business continuity.

Market research has previously found that of 1,000 respondents 81% were not getting the IT deals they expected with margins as high as 474% unearthed. Price and stock in the supply chain change readily and natural disasters accentuate the challenge for time strapped multi-tasking ICT buyers trying to achieve best value on every purchase.

Better planned and researched proactive buying is proven to yield greater compliance and more-for-less budget compared to ad-hoc, reactive and fragmented buying behaviour. Simple support structures exist to facilitate a proactive culture.

Having previously worked for an IT reseller, Al Nagar has over a decade of deep understanding of IT buyers’ needs, reseller margins and the highly volatile ICT supply chain. A move to Mercato Solutions has seen him become ‘friend of the buyer’, transferring his knowledge to support private and public sector buyers in extracting more value from their supplier relationships and budgets. He has advised some of the UK’s largest organisations on adopting benchmarking techniques as part of best practice procurement for sustained best value. This includes taking control of IT budgets, validating what is cost and demonstrating how to achieve visibility of supplier margins for better deals. He regularly provides advice on global trends that define ICT price and stock movements in the domestic market and continues to help people drive more equitable and sustainable supplier relationships.