IT Procurement

Things you need to know about IT Hardware Procurement

Athena Commercial
June 15, 2021

There are a number of different types of hardware you may buy in your business, and they will vary between hardware that is being used to support your business systems, such as servers and networking equipment and hardware that is being used to support your end-users, such as laptops and computers.

Often companies can purchase IT hardware in a sporadic fashion, often being reactive to emerging needs. Having a strong hardware procurement policy in place is essential and this will ensure that the best purchasing decisions are being made to ensure value for money is being delivered for your business.

When purchasing IT Hardware for end users it is important to consider the below points:

  1. When buying IT you should ensure your users have the right tools to maximise productivity and collaboration without duplicating costs and capabilities.
  2. You should collect end user data to identify user groups and what devices, applications, service needs, connectivity requirements and support model they require.
  3. Your IT hardware should be mapped to each user’s job requirements. Provide the right assets for the job requirements or “tasks "that user is fulfilling.
  4. Don’t take a one size fits all approach. Not every user has the same requirements, therefore you should assign a different technology stack per user groups.

When purchasing IT Hardware for business systems it is important to consider the below points:

  1. You should ensure your IT hardware procurement decisions are taken collectively are you existing infrastructure to avoid costly implementation or delays down the line.
  2. Consider advances in technology and whether you are investing in an old solution which is costlier to maintain and support. Migrating to a cloud based platform may cost more short term but be a better long term financial decision.
  3. Think about scalability. Cloud-based infrastructure can be instantly set up and scaled up and down depending on your needs.
  4. Think about support, the advantage of cloud based infrastructure is that support is provided by the provider, noting that this comes at a cost depending on the level of support that is required.
  5. Review your needs. For what current (and future)function is your infrastructure going to meet. Ensure you are confident the solution meets those needs adequately, and that it also isn’t overpowered.

Some of the things you should consider introducing are:

Standard Equipment List – Establish a standard set of equipment based on your business needs. A contract can be negotiated with specific vendors who can provide equipment to your business. Every year, the standard list should be revised to ensure that the standard equipment remains current and useful.

Protocol for Budgets – Establish a clear protocol for budgets to be able to purchase new IT Hardware equipment. Departments should ensure they have budget in place for this.

Requisition Process – What is the type of equipment being requested? Who will be responsible for it and where will it be located?

Procurement software to automate and implement – Introducing procurement software can speed up the overall procurement process. It can free employees from repetitive and time-consuming tasks. Procurement software lets you focus on activities like decision-making and strategizing.

How you should buy IT Hardware:

When making IT procurement decisions you have the option to decide the best commercial model for you, whether that is buying the assets outright or leasing/hire purchase.

The pros and cons of buying outright: -

 Pros

·       You have full ownership of the assets

·       You can add to your balance sheet

·       You may deduct or write off asset value

·       No usage restrictions

Cons

·       Paying the costs upfront

·       Maybe having the finance this another way i.e. through a loan

·       Being responsible for maintaining and repairing the equipment

·       You take the risk on hardware depreciation

The pros and cons of leasing/hire purchase: -

 

Pros

·       Monthly fee basis and considered an operating cost

·       Option at end of term to give the equipment back or extend the lease

·       Allows usage of the assets without actually owning them

·       Limits upfront investment

·       Minimises maintenance costs

Cons

·       You are likely to end up paying more than if you’d bought outright

·       More administration and management required

·       Equipment remains the property of the supplier

·       May be obsolete by the end of the contract term

 

 Common Challenges in IT Hardware Procurement:

 

IT procurement creates its own unique challenges and can often be associated with complex and high costs. This can often come down to uninformed decisions being made quickly which cost further down the line. It’s important in the early purchasing stages to understand and be aware of the key challenges you may come up against and having appropriate strategies in place to overcome them.

Rapid Pace of Change – Technology is a growth industry and businesses must adapt with the fast-paced changes. It isn’t easy to be confident in what will survive so making important investments can be tricky. The complexities that come naturally with IT procurement require participation from multiple teams and stakeholders that are within the purchasing side. Consultants who are trained experts in their field are always a bonus to assist with success.

IT Specialization – Suppliers of IT equipment know their business and product inside out and have experts in their teams who develop, market and sell their services. Specialised IT knowledge is required so you have a strong buyers position, it is always worth hiring a specialized IT procurement consultant.

The Purchasers Needs – It is vital to understand why you are making the decision you are making when it comes to making a purchase. Something that costs less may be more efficient than the latest, most pricey IT equipment. Conduct an IT needs assessment to really understand the end user’s needs.  

Integration Challenges – A big question for new IT purchases is how well it will integrate with existing systems. A level of understanding legacy systems is required, reviewing current contracts and considering potential issues when transferring to a new supplier.

Hidden Lifecycle Costs – Be aware of updates and upgrades for your equipment. The initial cost doesn’t stop there as the lifecycles of equipment whether software or hardware will consistently need to be updated. Another point to consider is the cost of regular maintenance.

Some of the different types of IT hardware that may be bought are:  

 

Personal Computers

Nearly every business will operate with computers somewhere along the line. The functions of a computer in a business can range from generating reports, client contact, Marketing, Accounting and beyond.

It is vital that each business owner takes the time to choose the right computers for their company. It is also highly important to consider laptops or a personal computer is best for employees.

Considering portability is a good example of what to initially consider when setting out to purchase

IT Hardware. Where do your employees work? If employees are on site, perhaps a desktop might be the best option. They are generally more affordable to purchase and to also repair because their general components are more accessible.

Modern advancements in networking capabilities mean that companies may also look to deploy server based hardware, known as “thin clients” which are a much cheaper alternative but are dependent on staff members having access to the network.

 

Laptops- Laptops can provide a much more flexible way of working which is preferred in the current climate by many people. Portability offers opportunity to carry out the same tasks whilst being on the move.

Salespeople for example, may need the flexibility of being able to log on whilst commuting or continuing projects after hours at home. It is important to note that when it comes to purchasing Laptops for your business, they can often be slightly more expensive to buy and to repair.

Consider carefully the support and maintenance packages you buy (or don’t buy) as part of your laptop or PC purchases, and monitor continually whether these are most appropriate for your needs and requirements.

Mobile Devices - Mobile Technology can help to streamline the everyday functions of a company. Their overall success depends on what type of business you have but the obvious benefit of mobile devices is the significant increase in communication between internal departments. This can really improve overall customer service and client management. Tablets and smartphones mean customers can receive instant access to information without having to wait for a member of staff to get back to them.

External Devices - When considering your workstation set up, it is easy to dismiss the importance of peripherals such as keyboards and mice however, forgetting their differences could be a huge mistake.

They aren’t necessarily a one size fits all solution and surprisingly there are many types of external devices available depending on the needs of your business. Printers, keyboards and monitors are some good examples of equipment that employees will be constantly coming into contact with so if they are being kitted out with cheap or no peripherals, this could cause problems internally.

Keyboards – You might not notice the difference a keyboard makes until you have to use a different type. More often than not, a basic QWERTY keyboard with a numeric keypad and function keys will do the trick. Perhaps you might want to explore keyboards that are backlit or that have USB ports and wireless connectivity.

Mice – Trackpads can be great, but a mouse can really change your level of productivity. You can purchase either wired or wireless devices. Wired mice can often be a little more restrictive when used whereas a wireless mouse gives more space.

Headsets – Using a headset as part of a daily work routine can really help to improve posture and overall productivity. Having both hands free means you can engage in using a computer or taking notes whilst on the phone. Headsets that are wireless mean you don’t have to be seated when taking calls further increasing productivity and good physicality.

Servers - Everything these days is available via the cloud and supported by the use of servers. This can be anything from storing data, hosted software or disaster recovery. So consider whether you really need in house servers.

In house servers located onsite mean you have complete control over your hardware and all of the configurations. This can also mean you will incur the time and cost associated with managing and maintaining the environment of your data centre.

Should you wish to migrate your existing servers to the cloud, then we can help you make the right decision as to your cloud provider and preferred implementation partner.

Server Racks - If you have made the decision for your business to purchase in house servers, you may also want to consider the installation of racks. Server racks can also be known as server mounts and exist to hold servers in a rectangular structure. They help prevent severs from overheating which could happen if stacked on top of one another, this could lead to performance issues further down the line.

Where we can help you:

We can help your business understand what your true requirements are before you make any decisions. Our expertise allows us to assist you when it comes to utilising proper procurement practises that will pay dividend. We can guide you in reviewing your existing technology contracts and what to look for in new ones, so you avoid any automatic price increases, capacity limits, cancellation restrictions and beyond.

Choosing the best vendor for your business can be an overwhelming process. We can help with market research and negotiating price to get you the best deal because we have an extensive knowledge of the market. Once you have decided on your IT requirements and defined the products needed, we can assist with researching appropriate suppliers, contacting them for formal proposals, negotiating your terms and ensuring that penalties are in place if a supplier doesn’t perform.

For further advice or an initial consultation please get in touch at info@myarrowhead.io.

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