Internal IT Procurement processes
A transparent and comprehensive central IT procurement process within your organization will lead to increased efficiency, higher cost saving potentials, decreased Maverick Buying and lower risk. We will help you by analyzing your current procedures and optimizing them. It is not enough to draw some swim lanes but it is absolutely essential to
- consider the interaction between the different stakeholders (procurement, IT, legal, data protection, etc.)
- define together with the stakeholders their roles and responsibilities in the process
- communicate the process within your organization
- implement and follow it.
You will profit from more negotiation power with the suppliers when involving your internal stakeholders at early stages of the process. At the same time your Maverick Buying ratio will decrease rapidly.
Structured RFPs & Offer evaluation
A structured and organized RFP process will allow for high quality of the offers, competitive market prices and a good contractual basis. Finding the right potential providers, aligning internally on the requirements, preparing the RFP document, evaluating the offers qualitatively and financially are all crucial to make the RFP a success.
Depending on the deal size, the complexity of such an RFP process can be easily adjusted. Structure and transparency will not only be helpful for your shortlisted suppliers, but also your involved colleagues will benefit enormously.
We will support and/ or coach you through the whole process based on our best-practices as well as our templates and tools, amongst others:
- RFP planning
- RFP structure
- RFP document incl. KPIs/SLAs
- RFP evaluation (qualitative & financial)
If you want to know more about our big ITO and AMS outsourcing initiatives, then click here.
IT Contracting Framework
IT buyers are allrounders: They do not only need to have a profound comprehension of the required IT services and products, they also need to be project managers, provider managers, negotiators, good communicators and have a distinct understanding of legal aspects. This is a tough task especially as the IT world is constantly changing, and so do the various delivery models. IT contracts need to be adapted and legal clauses and conditions reconsidered. Most often IT buyers are struggling with the legal framework. However, it is crucial for them to understand the important legal constructs and their implications in the different contract types. We know what to look out for in contracts e.g. for:
- Managed Services
- Licenses/ Subscriptions
- Customization of standard software
- Software as a Services (SaaS)
- IT project services
- Agile development projects
Another big opportunity for quality improvements and cost savings is the consolidation and standardization of your existing IT contracts. You should opt for optimized Framework Agreements with a defined service catalogue rather than a big variety of small contracts. This will also decrease your internal efforts for contract negotiations and contract management.
IT Price Benchmarking
Although “price” should not be the only decision factor when purchasing IT products and services, most CFOs and CPOs expect to get the best financial conditions possible. IT Price Benchmarks are very helpful in assessing the competitiveness of prices in various situations, amongst others:
- Make-or-buy decisions
- Evaluation of offers
- Evaluation of existing contracts
Some of your contracts might already include a benchmarking clause. Apart from executing such formal benchmarks, Navisco performs a benchmark e.g. in the course of a sourcing strategy initiative, before a potential contract prolongation or for the cost assessment of the internal IT delivery.
If you do not have the data and no experience in normalizing prices to ensure the best possible comparability, then you will not be able to validate if your existing/ offered prices are on market level. This is where we can help you with our profound expertise.
We have a sophisticated benchmarking database which solely consists of negotiated prices from outsourcing deals we have conducted across industries. The perfect basis for your next price evaluation initiative!
The IT buyer needs a good overview of the IT contracts, their durations and termination clauses, the TCVs, the overall IT costs and the main cost drivers as well as a mapping of service providers into ABC-suppliers. Such data is not only relevant for the procurement department but also for the IT colleagues. It helps them to establish IT performance measurements as well as necessary standards, methods and organizational structures. How could you otherwise potentially manage something which you are not measuring?
However, in practice, establishing a company-wide IT cost transparency is a big challenge for most organizations. This challenge becomes even more complex, if (most of) your IT services are being delivered internally.
With our expertise and tools, we are able to support you e.g. in
- Achieving cost transparency via our pricing frameworks
- Cost-allocation, financial performance measurement, budgeting and forecasting
- Analyzing cost improvement potentials
- Assessing your vendor strategy
- Improving your contract management