Advice from procurement: How to evaluate and propose new IT investments
Gartner
recently
cut
their
expected
IT
budget
prediction
from
5.1%
to
just
2.2%
in
2023.
This
is
three
times
lower
than
the
projected
6.5%
global
inflation
rate.
Gartner
recently
cut
their
expected
IT
budget
prediction
from
5.1%
to
just
2.2%
in
2023.
This
is
three
times
lower
than
the
projected
6.5%
global
inflation
rate.
As
the
world
continues
to
experience
economic
uncertainty,
IT
leaders
look
to
tighten
budgets,
consolidate
tools
and
resources,
and
generally
become
more
risk-averse
when
evaluating
new
investments.
So
how
can
you
request
a
new
investment
from
your
decision-makers
while
ensuring
minimal
costs
and
maximum
ROI
this
year?
Here’s
four
pieces
of
advice
from
procurement
on
how
to
evaluate
and
propose
new
IT
investments
during
an
economic
downturn.
Involve
your
procurement
team
from
the
beginning
McKinsey
surveyed
more
than
1,100
organizations
worldwide
and
found
that
the
best-run
procurement
teams
can
generate
twice
the
annual
savings
of
those
in
the
lowest
quartile.
Procurement
professionals
are
skilled
at
negotiating
contracts,
identifying
cost-saving
opportunities,
and
evaluating
vendors.
By
bringing
them
into
the
conversation
early
on,
you
can
leverage
their
expertise
and
get
the
best
cost
and
contract
structure
available
upfront
while
you
focus
on
the
technical
requirements.
This
can
also
help
you
avoid
a
long
and
onerous
contract
process
with
better
quality
in
the
long
term.
To
get
started,
develop
a
list
of
criteria
your
IT
and
security
investments
should
meet.
This
might
include
things
like
cost,
feature
set
and
functionality,
reliability,
scalability,
and
vendor
support.
Once
you
have
this
list,
work
with
your
procurement
team
and
use
it
to
evaluate
potential
solutions
and
vendors.
Consider
the
total
cost
of
ownership
When
investing
in
IT
and
security,
businesses
need
to
consider
more
than
just
the
initial
purchase
price.
The
total
cost
of
ownership
(TCO)
considers
all
costs
associated
with
an
asset
over
its
lifetime,
including
shipping,
taxes,
installation,
training,
maintenance
costs,
and
more.
In
a
survey
by
Deloitte,
65%
of
organizations
reported
that
cost
reduction
was
a
top
business
priority,
and
52%
cited
TCO
reduction
as
a
key
strategy
for
achieving
this
goal.
By
evaluating
TCO,
businesses
can
make
more
informed
decisions
and
avoid
unexpected
expenses
down
the
line.
Reduce
the
perception
of
cost
Change
can
be
scary,
especially
if
there
are
dollar
signs
attached
to
it.
By
reducing
the
perception
of
cost
and
associated
risks,
you
can
help
decision-makers
feel
more
comfortable
with
investing
in
new
solutions
and
technologies.
To
do
this,
consider
taking
the
following
steps:
-
Validate
proof:
Check
references
and
testimonials,
ask
for
proof
of
concept,
and
talk
with
the
vendor’s
partners.
Compile
this
information
and
use
it
as
part
of
your
analysis
and
presentation
to
decision-makers. -
Focus
on
positive
impact:
Focus
on
the
benefits
and
ROI
of
the
proposed
investment,
such
as
increased
productivity,
better
security,
or
improved
customer
satisfaction.
Present
these
benefits
in
a
clear
and
concise
way,
using
data
and
real-world
examples
to
support
your
case. -
Consider
your
company
scorecard:
Your
procurement
team
has
a
scorecard
with
clear
metrics
to
evaluate
purchase
decisions.
Consider
their
metrics
to
make
informed
decisions
and
best
support
your
proposed
investment. -
Present
the
facts
and
numbers:
Be
transparent
about
the
costs
associated
with
the
investment.
Provide
detailed
information
about
the
total
cost
of
ownership,
including
any
ongoing
maintenance,
support,
or
upgrade
costs.
This
can
help
decision-makers
understand
the
full
picture
and
make
informed
decisions.
Evaluate
the
risk
of
doing
nothing
In
addition
to
ROI,
it’s
also
important
to
consider
the
risk
of
doing
nothing.
This
may
include
lost
productivity,
increased
downtime,
and
slower
time
to
market.
Provide
decision
makers
with
credible
industry
research,
as
well
as
your
own
team’s
statistics
to
support
your
request.
For
example,
if
you’re
proposing
to
invest
in
a
security
solution
powered
by
AI
and
machine
learning,
it
would
behoove
you
to
present
cost
savings
from
automated
security,
such
as
that
from
IBM.
Or
if
you’re
finding
that
building
your
in-house
web
application
platform
is
locking
you
in,
report
on
the
specific
challenges
associated
with
the
project,
such
as
hidden
costs,
maintenance
fees,
and
compliance
issues
your
team
faces.
These
are
common
problems
that
procurement
and
IT/security
professionals
should
work
together
to
address.
Wrapping
Up
Collaboration
between
procurement
and
IT/security
professionals
is
crucial
to
evaluating
current
and
future
investments
in
order
to
minimize
costs
and
maximize
ROI,
especially
during
an
economic
downturn.
By
clearly
defining
needs
and
requirements,
evaluating
TCO,
and
performing
risk
assessments,
these
teams
can
work
together
to
help
their
business
leaders
make
more
informed
decisions
for
an
improved
bottom
line.
Edgio’s
holistic
applications
platform
helps
address
challenges
associated
with
website
security
and
performance,
hidden
costs,
maintenance,
and
compliance
requirements.
Learn
more
here.
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