Indirect IT Procurement Plans 2020 


It’s almost a year since Gartner published its white paper “Procurement 2020: Your Action Plan to Prepare Now” and while CPOs will already have their 2020 plans in place by now it’s still worth considering some of Gartner’s “procurement shift” recommendations and how they could complement your own indirect IT device procurement plans this year. 

We’ve picked out a few key shifts that are worth a closer look. 

Value Drivers: Moving from Cost Saving & Risk Mitigation to Execution Speed and Business Insight 

Procurement should adopt new technologies and increase their focus on analytics to enable quick action on insight regarding the supply market, supplier performance and business buying behavior. 

  • 79% of procurement executives consider gaining visibility into stakeholder needs an urgent issue. 
  • 75% of procurement executives consider displacing low-value activities to spend more time working with business partners an urgent issue. 

At Markit we wholeheartedly agree that understanding the key stakeholders’ opinions is essential to identify where additional value can be created – in fact, this sits at the core of our “helping clients succeed” methodology, and one thing that’s almost universal – CPOs and their teams want more time! 

Procurement’s Role: Shifting from Procurement Executor to Procurement Advisor ​​​​​​​

Procurement should continue to focus on top-tier buys, and at the same time enable the business e.g. IT device end users, to independently source mid- and low-tier buys e.g. headphones and other IT accessories, with procurement acting as a sourcing advisor when needed. Experienced IT category managers will in future tend to focus their efforts only on top-tier buys and spend more time developing and managing category strategies. 

Markit clients confirm that they save a considerable amount of time (compared to their previous solution for buying IT equipment) and so, indirectly, Markit is enabling CPOs and their teams to spend less time on transactional tasks and more time on urgent or strategic issues including identifying new sources of value within the procurement function, as a whole. 

Business Role: Shift from “Procurement’s Client” to Disciplined Sourcing Agent 

The business will gain more responsibility over its sourcing decisions and own more of the consequences of irresponsible/maverick sourcing, as well as more of the partnership activity with suppliers. This extends in the case of IT devices down to end users being able to purchase their own requirements from pre-approved product lists from marketplaces/suppliers. Procurement will enhance its training and coaching capabilities to help ease the transition to business partners sourcing IT devices on their own. 

 Simplicity and transparency are key issues here. It’s worth noting that 69% of business users prefer a system that’s easy to use as opposed to 31% who prefer to understand the value of the system. Source: Procurement Business Partners Sourcing Effectiveness Survey 

Markit recognises the CPO’s challenges here and facilitates this through personalised onboarding of their company's “authorised buyers”. At the same time, we provide the procurement function with mechanisms and full transparency of pricing & purchase history to evaluate and monitor IT device sourcing and spend discipline by the business. In the case of IT hardware and accessory procurement we also see a trend towards supplier consolidation, customised IT catalogues and punchout integration to facilitate procurement’s goal to create, and manage, disciplined IT sourcing agents within their companies. 

Procurement process expertise and category management skills will become more valued as the procurement function moves away from purely transactional tasks and sourcing expertise. In the case of IT procurement for example, we see (in the larger companies) CIOs and CTOs making more of the sourcing (product and supplier) decisions whilst CPOs focus on process, insight gathering and business-buyer management. Of course, where the business has limited or insufficient IT buying expertise the procurement function takes back (or never releases) the transactional tasks. This illustrates the need for simplicity in whichever IT device procurement system is used.  

Resources: Moving from Core Technology to Customer-Oriented Technology

In making the decision to work with Markit, clients have not only produced (average) annual savings of 12.5% on product prices but perhaps equally importantly (or some might say even more importantly) their spend visibility and control have increased significantly, as has their execution speed of IT purchasing.