Analyse your current IT purchase and see if they meet your requirements, if they were your genuine need and were they cost-effective. Proper and planned IT procurement is crucial in keeping your workflow seamless, managed and competitive. Currently, procurement leaders are juggling between remaining updated with high demands for digital innovation and balancing cost-efficiency, risk management and compliance. If your IT purchase goes wrong with unmanaged planning, wrong vendor fit, unclear goals and excessive costs, your enterprise can go through severe repercussion.
As you could end up with undeniable contracts, outdated technologies, sever difficulties and confusions in the absence of planned and managed IT purchase, here we will guide you through the top IT procurement challenges SMEs face and practical ways to fix them so that you can avoid procurement challenges and grow your SME efficiently.
Top IT Procurement Challenges SMEs Face
1. Lack of Clear Requirement
One of the core reasons of unmanaged procurement is most of the employee providing unclear requirements. Unclear specification can lead to mismatched solution, project delays and increased costs. Jumping into buying new technologies might look fascinating but skipping the clear research on whether it fits well or not might end up with challenges. It is like buying the shoes you like but not of your size.
When you spend your budget on purchasing IT resources that do not match your requirements and no one uses it, you might miss out on opportunities of purchasing the real services your team actually needs. Therefore, with lack of clear requirement, it only works as a budget loss with no actual benefits.
2. Overspending and Hidden Costs
Do you calculate cost of everything while purchasing IT devices or services including setup charge, delivery charge, support charge and everything that comes after, or you just make your deal looking at the upfront cost of the device or service only? Most of the time IT procurement becomes a challenge when you make deal just on the basis of reasonable price but the invoice for setup, training and other related work hits you with the cost that exceeds your budget limit.
3. Inadequate Vendor Management and Lock-in Period
Working with multiple vendors can be challenging to maintain the consistent quality of the products. As you select your vendor, you sign the contract, get the product and eventually, vendor’s support slows down. Organisations also think that once they complete IT hardware procurement, their work is done. But, maintaining vendor relationships will allow you to get quick and genuine assistance when you need. End of communication with your vendors after purchasing might bring difficulties when you need support.
4. Complication of Compliance and Risk
IT procurement doesn’t end after you find the right tool. It is more crucial and challenging to keep up with the evolving compliance. Companies take adhering compliance is secondary priority and assume that their vendors will look into it with a simple contract clause. You must be proactive and understand what short of rules and regulations apply to your company. Security risks are introduced through unauthorised SaaS purchases. In absence of proper vetting, business risk keeping sensitive information in software which fails to comply to security and regulatory standards.
5. Workforce Shortages and Skill gaps in IT Procurement
Tracking down and sustaining skilled procurement professionals is challenging than ever. Availability of experienced and skilled talent is low, but the demand remains high, and it keeps growing. Procurement team face difficulties to manage complicated process, effective negotiation and applying strategic initiatives and with limited experienced procurement professionals, they might face pressure to perform more and lead to burnout.
Comparing with other procurement sector, IT procurement professional should have the knowledge of digital tools, data analytics along with standard procurement management skills. Therefore, it is quite challenging to find such experts and SMEs might not afford such skilled workforce and in absence of such expertise, companies may face sudden fall down because of unmanaged or improper IT procurement.
6. Device Supply Delay and Inefficient Productivity
Delays in device supply are a continuous challenge in IT procurement, which directly affect the productivity rate of employee as they are not able to work with the required equipment. Transporting devices around the worlds is a huge challenge and even though you place your order on time, delay in device delivery from vendors become an issue.
With degrading schedule reliability throughout the shipping sector, container transport reliability reached an all-time low in 2024. Such shipping delays bring whole supply chain disruptions. Shipping delay is not the only issue, traditional procurement processes introduce additional delays with its traditional procurement workflows of multiple approval stages, manual tracking and administrative delays.
7. Cultural Differences and Communication Barrier
Cultural difference and commutation barriers bring major challenges in IT procurement, mainly by escalating misunderstandings, delays, expenses and risks within the supply chain. These challenges arise from rooted disparities in language, standards, and business practices that can be challenging to understand, especially on a global scale. Such obstacles can result in various particular issues within IT Procurement, including:
- Misinterpretation in Orders and Specifications
- Project Delays
- High cost rates
- Unmanaged supplier relationships
Poor IT procurement might be holding back your business. Start managing your IT procurement strategies with us today. Feel free to contact us for the consultation.
Practical Ways to Fix the IT Procurement Challenges
IT procurement challenges can be handled and managed systematically with correct procurement decisions, procurement strategies and understanding the local and global procurement landscape. Here are some practical ways to fix the IT procurement challenges:
1. Provide Clear Requirements
Procurement professionals can create a simple requirement template which includes business problem to solve, must-have products, severity of required products, number of users, security and compliance needs and budget range. Conducting a brief survey within the employees who will use the tools before purchasing or replacing the products can ensure real-time requirements. With this you can reduce waste, optimise procurement process and achieve better ROI.
2. Limiting Overspending and Hidden Costs
Do not ignore Total Cost of Ownership. Applying the Total Cost of Ownership (TCO) analysis will help in mitigating hidden cost and assist in planning real budget. TCO covers the entire procurement cost of setup and implementation, training, updates and maintenance, support and renewals and migration or exit costs.
Requesting for a full and detailed cost breakdown with the vendors, prior to signing the contract and negotiating the prices, prevents budget shocks. Centralise IT procurement approvals, prevent dark IT purchases and remain clear from unexpected hidden cost along with limiting overspending on IT purchase.
3. Enhance Vendor Management and Avoid Lock-in
Signing up for a shorter contract period with renewal options can create you safer opportunities to explore and remain free of long lock-in periods. Go for Service Level Agreement (SLAs) which contains better response times, uptime assurance, readiness and holds vendors accountable.
Conduct quarterly reviews or as needed to maintain service quality of the vendors. Do not depend entirely on a single vendor, and keep alternative suppliers so you can exit smoothly if your vendor tends to be unreliable. Set data portability clauses so you can export data easily when you change vendors.
4. Maintaining Compliance and Security Risks
Staying compliant with the policies and regulations assist in reducing regulatory cybersecurity risk, minimise data breaches and improve data security. Your procurement professional can create a compliance checklist for procurement that covers audit rights, data protection certifications, access control, along with data location and encryption.
Be proactive, ask for updated certifications, related documents and avoid compliance issues. Do not make unauthorised software purchase. Even in SMEs, a single person should take a responsibility of looking after the IT risk, tracking down all IT risks and maintain compliance.
5. Filling Skill-gaps in IT Procurement
SMEs might have less number of employees and have skill gaps, but this gap can be filled with providing training and upskilling existing employees. Educating them with vendor negotiation skills, basic IT knowledge and cost management skills can be impactful. Hiring consultants or getting services from IT management companies instead of having a full-time staff can be budget friendly. Following the best IT procurement practices and standardising the process can reduce burnout and bring impactful changes.
6. Minimising Device Supply Delays and Productivity Loss
Early planning of required devices and placing order on time rather than taking last minute action can minimise the risk of delays in device supply. Applying automated systems and replacing the traditional procurement approval process can speed up purchasing process. Dealing with local stakeholders can minimise shipping delays or if you have to depend on shipping for few products, use tracking tools to anticipate your delivery. Reducing the supply delay will lead to sustained productivity and seamless operation.
7. Tackling Cultural Differences and Communication Barriers
Use simple, standard and clear language for documentation, contracts and product specifications. Companies can use specific communication channel to avoid confusion like using company’s email, create specific chat group with relevant stakeholders. Appointment of specific contact person will make the communication easier with reliable flow of information.
Providing trainings or knowledge sharing can be done for cultural awareness, which will reduce misunderstanding. Every verbal procurement decisions or discussions should be backed with written documents as an evidence. This will minimise the chance of disputes, misunderstanding and increase efficiency.
Conclusion
Rapid increase of technology is not the source of IT procurement challenges; but the main reasons are poor planning, implication and management of the technologies. SMEs have to go through variety of challenges like limited budget, skilled human resources and intelligent solutions. But managing IT procurement is not about only having sufficient budget, but it can be done with smart use of available budget, procurement strategies and the best practices for IT procurement.
Being proactive and adopting to methodical approach of IT procurement can ensure SMEs to gain control, minimise risk and make genuine value out of every technology investments. Issues related to IT procurement are not inevitable. Having an organised procurement procedures, clear communication, smarter vendor management, compliance awareness and proper balance of procurement expertise, SMEs may transform IT procurement into strategic benefit.
If you want to avoid the challenges related with IT procurement and apply a workable solution within a budget, talk with our experts and streamline procurement strategies with our IT procurement services. Reach out to us now and secure the opportunity to acquire smarter IT procurement.
