It is highly likely that your company recently purchased IT products that it didn’t need. If so, you are not alone. According to a recent report by Morgan Stanley, between the years 2000 and 2002, U.S. companies spent about $130 billion on software and hardware that they ultimately didn’t need. And Gartner says these figures jump to $540 billion on a global scale. That translates into a lot of dollars sitting mostly in IT department closets.
Two key reasons for this waste are: (1) The solution was not able to do what was expected at the time it was purchased, and/or (2) Hidden costs that surfaced after the purchase did not leave any budget dollars available for implementation. Even when buyers select the right solutions, they often overpay.
As managers, how can you avoid buying inadequate products that can’t live up to their claims? Even if you can find the right products to meet your business needs, how can you avoid paying overblown prices and/or finding your budgets vanishing due to hidden costs?
Joe Santana, coauthor of the book Manage I.T., has written a resource document that will guide you in becoming more skilled at buying software and hardware for your organization. You can download the document here.
This resource explains the importance of developing a network of product experts (people who know products inside and out from personal usage experience), how to develop such a network, and how to engage the experts when you’re asked to buy a solution.
After you’ve gotten the expert feedback you need, you then have to negotiate with your vendors. You can leverage great value to your company by negotiating the best terms and conditions with your vendors.