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5 Things We’ve Learned From the IT Procurement Community in 2024
The NPI team never misses an opportunity to connect with the IT procurement community. Over the past few weeks, we’ve attended the Procurement Foundry’s Forge: Tech Sourcing conference and ProcureCon IT Sourcing 2024. Here are five key takeaways from these events:
1. While IT Procurement’s Role is Becoming More Critical, Resource Constraints are Serious
IT procurement has never been more crucial to the business, but teams are often under-resourced and under-budgeted. The rapid pace of change – from the broader tech marketplace to licensing and pricing at the vendor-specific level – leaves little time or resources for education and expertise development. One of the biggest concerns is the amount of time teams are spending on administrative tasks like tracking spend, order intakes, chasing renewal deadlines, etc. It’s hard to be strategic when you’re focused on the tactical. Almost everyone we spoke to mentioned they were hiring, pointing to significant organizational turnover and disruption. These challenges are further compounded by multiple rapidly evolving IT categories, especially cloud and cybersecurity.
2. Alignment with IT and Business Stakeholders is a Challenge and a Top Priority
Alignment between IT procurement, IT, and business stakeholders remains a challenge. Gaining internal credibility and ensuring timely engagement in projects is an ongoing struggle. Many procurement teams are still battling for visibility and true collaboration with their stakeholders. Continuously proving value to maintain their position at the decision-making table is essential, especially with limited resources and budget. To be effective, procurement must be methodical, strategic, and highly proactive. That brings us back to what we covered in the first takeaway: IT procurement teams need breathing room to be more focused and more strategic.
3. The Rise of AI is Prompting Demand for Practical Use Cases
Artificial Intelligence (AI) is a hot topic in the IT procurement space, but companies are looking for practical use cases that demonstrate meaningful impact quickly. The excitement around AI needs to be matched with real-world applications that provide tangible benefits to procurement processes and outcomes. Check out this video from Jeff Muscarella, NPI EVP of Digital Products and Services, on 3 things every IT practitioner should know about AI:
4. Better IT Spend Visibility is Needed
Improving spend visibility is a significant area of focus, especially as shadow IT spend continues to erode vendor negotiation leverage and cost transparency. Procurement must lead the way in consolidating spend for smarter IT purchasing and advocate for centralized IT spend management. While some companies are centralizing only large expenditures, managing tail spend remains a big question.
5. IT Buyers are Becoming Bolder in How They Approach Enterprise Software Renewals
A new boldness is emerging in how some companies approach enterprise software renewals. With vendors often delaying quotes until the last minute, some companies are now adding contract clauses requiring detailed, itemized renewal quotes six months in advance. This proactive stance helps companies gain visibility into renewals and create competitive leverage. Discussions at the conference highlighted how companies are negotiating to avoid overbuying, taking new measures to increase licensing flexibility (specifically around reallocation), and pushing back against vendor price increases that deliver little value and only serve to increase customer account revenue. IT procurement teams are taking a firm stand by indicating that even deeply entrenched vendors that don’t play fair could eventually find themselves unseated by a competitor in the future.
NPI Takes New Steps to Empower IT Procurement for Strategic Success
These insights highlight the evolving landscape of IT procurement and underscore the importance of strategic, proactive, and well-resourced procurement functions. As we move forward, addressing these challenges and leveraging these opportunities will be key to driving success in IT procurement. Just as we’re witnessing IT procurement teams become bolder, NPI is also taking steps to take on these challenges in new ways.
We recognize there is an immediate need for tools and resources that help IT procurement to:
- Reduce their administrative burden so they can be more strategic and focused on high-value, high-impact activities
- Stay on top of changing licensing, pricing and competitive landscapes at the SKU-level so they can elevate credibility and confidence
- Manage software renewals with ease – this is ground zero for the massive overspending patterns that plague most enterprises
- Implement low-risk/high-reward AI-enabled procurement tools that deliver immediate and measurable cost-savings
Today, over 130 of the Fortune 500 use NPI’s IT transaction optimization services to meet these requirements. We will soon be introducing new groundbreaking capabilities that will empower IT procurement teams even further. Stay tuned to this space over the next few weeks!
Interested in learning more about NPI’s IT purchase optimization services? Contact us today.
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