IT Software Procurement: A Step-by-Step Walkthrough

Just as it takes strategic planning to find the perfect IT hardware for your organization, IT software procurement is equally important. 

The end goal is to purchase the right software platforms that meet your operational needs, while taking budget, management, security, and compliance into account. 

Here’s how to approach the software procurement process from start to finish. 

What is IT Software Procurement?

This involves selecting and acquiring the ideal software solutions for your business, with some common examples being e-commerce software, CRM, productivity software, SaaS, and collaboration tools. 

Some elements of successful software procurement include selecting new tools that are compatible with existing systems, getting agreement among key stakeholders and department management leaders, and carefully vetting potential vendors.

In addition, it requires smart negotiation tactics and drafting favorable contracts. 

IT Software Procurement Process

1. Needs Identification

The first step for your organization when approaching information technology procurement should always be to have a clear understanding of your exact needs to ensure customer success. 

To specify, needs refers to identifying your current pain points, inefficiencies, and any gaps in your current information technology products. Also, you should factor both your short-term and long-term goals into the equation, and how much scalability a software must offer. 

Crystallizing your needs should shed light on what type of IT software you need, features to look for, budget limitations, and so on. From there, you can proceed with certainty as you move forward, taking a proactive rather than reactive approach to your management processes. 

Just note that everyone on your procurement team needs to be on the same page for it to work. 

2. Tech Stack Review

Any new software you procure should complement your existing tech stack and be an asset to your overall IT ecosystem. What it shouldn’t do is complicate it.  

That’s where a tech stack review comes in. 

Here, you’ll want to make a list of all your current software, whether it’s system software, application software, SaaS, or cloud-based.

Then, figure out:

• What existing software could be upgraded rather than replaced
• What definitely needs to be replaced (for example, maybe your system software should be replaced with SaaS)
• If there could be any functionality overlap when replacing software
• Potential integration management issues

Doing this should ensure that you don’t make unnecessary purchases on new technology that you don’t truly need and that you’re able to optimize any new systems you implement.

3. Make or Buy Analysis

For many business owners (especially those lacking significant software development skills), their first impulse is often to buy software from a vendor. 

And while that’s often the more logical move, you’ll usually want to at least consider developing an in-house solution rather than automatically making a vendor purchase. 

With AI making software development easier than ever, an in-house solution could be viable and provide more customization and complete ownership. However, it does take more time and effort than purchasing and doesn’t come with any vendor support or management. 

For more advice on which option is best for your organization, we suggest reading this guide. 

4. Market Research

Once you’ve got a grasp on your needs, have reviewed your tech stack, and know for sure that you want to purchase software, it’s time to take a deep dive into the market. 

At this stage, for instance, you’ll want to: 

1. Explore top vendors for the specific tool you need
2. Perform a detailed comparison
3. Identify the strengths and weaknesses of each vendor
4. Consider factors like flexibility, scalability, reliability, customer support, automation, and integrations
5. Look at the pricing structure
6. Check out ratings, reviews, testimonials, and case studies

After crunching all of the data, you should have a solid understanding of what each vendor brings to the table, which brings us to the next step in the procurement process. 

5. Vendor Shortlisting

From there, you’ll want to make a shortlist of potential vendors you’re interested in. Any vendor that makes your shortlist should meet most, if not all, of your business’s criteria.

Their software should: 

• Have all of the core features you need
• Be capable of handling all essential workflow management tasks
• Have adequate flexibility and be scalable enough to accommodate future business growth
• Be reliable with strong customer support
• Integrate with your other existing systems and service providers
• Offer a price point that aligns with your budget

Generally, a shortlist should include three to five vendors. Just note that it’s usually best to have fewer rather than more contenders, as this should ensure the candidates are more qualified.

6. Supplier Vetting and Risk Analysis

Another factor that demands careful attention is the risk level that comes with partnering with a potential supplier. 

Besides a vendor’s overall reputation and stability, you should pay close attention to their data security standards, industry compliance, and whether they have a history of data breaches. 

Because you’re entrusting a vendor with sensitive information, it’s crucial that they’re properly vetted and don’t pose any major risk to your business processes. 

Here are some specific things to consider when vetting suppliers:

• Data security strategies (physical security, strict internal access, multi-factor authentication)
• Industry compliance certifications
• The steps they take to prevent data breaches

If a supplier checks all of the boxes and doesn’t have any red flags, they can advance to the next stage of the software procurement process. 

7. Vendor Prioritization

At this point, each potential supplier on your list should be vetted, and you should know what each one brings to the table. Now it’s time to rank each supplier from top to bottom based on the following factors:

• Overall value
• Service level agreement
• Pricing
• Software features
• Reliability
• Scalability
• Integration capabilities
• Compatibility with existing platforms and processes
• Customer support

Note that it’s important to get approval from all your procurement leaders during vendor prioritization, so be sure to get input from every key stakeholder. 

Also, you may want to use a vendor scorecard when making your ranking, as this visual representation makes the pros and cons easier to understand.

8. Negotiation

Before officially committing to a purchase, you’ll typically want to undergo contract negotiation. 

Besides increasing your odds of getting the best value from your purchase order, this can also help you get more favorable licensing and renewal terms, more robust onboarding assistance, more comprehensive contact support, and better cancellation terms. 

While there’s no guarantee that you’ll get the exact terms you want, negotiating contracts should work to your advantage and is an integral part of establishing positive long-term relationships with suppliers. 

9. Contract Signing

Finally, after contracts have been negotiated and your organization and the supplier are in agreement, it’s time to sign. This validates the relationship, and you can officially make the purchase.

Just be sure that before putting pen to paper, your legal team carefully reviews all contracts, specifically looking at the core terms, warranties, and compliance with business policies and security standards. 

From there, you can initiate onboarding and integrate the software into your systems. 

Using allwhere IT Procurement

In addition to software procurement, another big part of business success is hardware procurement. After all, having quality monitors, laptops, mobile devices, and accessories is a critical precursor to using software platforms. 

But for many businesses (especially those with a large IT infrastructure), hardware procurement management comes with immense logistical complexities. And if much of your team is remote, the potential for supplier management headaches is even higher. 

One of the best ways to take the hassle out of IT equipment procurement is to partner with a company like allwhere that offers professional IT procurement software and services.  

allwhere specializes in helping businesses find quality equipment from reputable vendors and creates custom kits based on your business need, team, geography, and more. 

One thing that separates allwhere’s procurement software from many competitors is that we don’t source from a single supplier. 

Instead, we partner with a wide network of vendors, which allows us to secure the optimal equipment even if one vendor is out of stock, for greater reliability. 

With our IT asset management services, we handle end-to-end logistics with the supplier and employee to drastically reduce your workload. 

We offer simple tracking from an easy-to-use dashboard, so you never have to wander where an IT asset is for easier supply chain and inventory management. 

Besides that, we also have buy and hold options that allow you to conveniently purchase IT assets from allwhere’s online store and have them shipped directly to allwhere warehouses for secure storage. 

This is beneficial because it helps avoid supply chain disruptions and shipping delays, and allows for hassle-free deployment once you’re ready to distribute assets to your employees. 

And when it’s time to retrieve equipment, our procurement software offers a built-in laptop retrieval service, along with retrieval for other assets like monitors, peripherals, and mobile devices. 

Learn more about our IT procurement services and get started with allwhere today.