IT Commodities – What Can Be Done?

August 3rd, 2015

What are you doing today to source IT hardware, software and services that people keep saying can’t be done?


Today’s post is post is from our SafeSourcing archives.

It is no secret that for years procurement departments have been trying, most of them unsuccessfully, to work with their IT departments to structure sourcing events that will deliver the products or services IT needs at price that everyone can be confident is a good as they could achieve.  There are reasons for this that IT teams will communicate and because no one tends to understand what the IT team does as well as the IT team, they are usually left to operate in their own bubble operating within predefined budgets without necessarily paying attention to getting the best deal for the company.  Today we will look at some of those objections and how you can overcome them with your team.

We are a {Insert Manufacturer Name} House – This is a very common objection from IT teams everywhere and is not without its point.   It takes companies months, sometimes years, to fully evaluate and decide on a manufacturer of hardware they want to standardize on so considering change can be one that is not always easy to do.  Because no vendor should be allowed to hold a business captive, regardless of how locked in with them they are, there are some strategies to ensure the best agreement is in place.  For manufacturers that are supportive of strategic sourcing projects it is easy because they help level the playing field and give their representatives an equal shot at winning or keeping the business.  In other cases, working with the Value Added Resellers to understand what other services or value they can offer in replacement of better pricing will be the way to approach a new event; giving new VARs an opportunity to win the business with better services.

We already have an enterprise license with {Insert Software Company} – This objection, too, is not without its merit.  Companies development arrangements with suppliers like Oracle, IBM and Microsoft to take advantage of their overall spend.  There is no reason that this should mean they automatically get every piece of business they can supply a company with.  The fact that there may be an Enterprise License in place doesn’t mean that their module for something like managing inventory is the best on the market.   It just means that they, as a partner, offer a tool that is needed and that they should be given a chance to earn the business just like everyone else.  Once everything is collected, if their tool is strong, using the Enterprise Agreement as leverage is the appropriate time to evaluate whether it makes sense to give the business to that company.

No one has the same pricing model – The third objection in this trifecta of IT objections.  The reality is that when it comes to IT services and software especially this is very true.  One of the most difficult thing to do is evaluate pricing received from an enterprise software RFP.  Cloud-based, client-based, named license, concurrent license, enterprise license, maintenance & support included or a percent of the licenses are all potential differences in pricing models from companies offering the same solution.  The reality is that the customer has more power than they know.  After (or even before if enough is known) the customer should be taking the elements of a pricing and SOW model they like the best and ask for updates based on that model.  EVERY software company I have ever known or worked for will tell you their model but when pressed will also confirm they can give bids however the customer wants them.  Lay it out and get common quotes.  Evaluation of the tools and the value they provide will be easier at that point.

For more information on how SafeSourcing can assist with sourcing IT projects or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

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