One function of managing the tech in your business is procurement.
Art of purchasing stuff.
Depending on the IT provider you work with procurement typically happens in one of two ways.
One, they sell you stuff.
Or two, they help you buy stuff.
Both of these approaches come with their own challenges.
For example, if your IT provider sells you stuff.
You may question their pricing.
That’s because when your IT provider sells you stuff…
It typically costs a little more.
How much more?
5% to 10% more.
This is due to margins they make on the back end.
And this is determined by the wholesale pricing they in turn get from distributors.
On the flip side.
If the company you work with recommends products for you to purchase.
There’s an overhead burden on your staff to actually do the purchasing of the products and services.
As you can see….
Each one of these buying methods has its own challenges and costs money.
The cost in purchasing something from directly from your IT provider may result in a higher price than what you can find online.
But, the challenge with purchasing something yourself is it now your staff is involved in the purchase process.
This includes time spent performing procurement.
In the end and you’ll end up with a few dollars difference when comparing both processes.
Which leaves us with the question.
Which way is better?
For me personally, I would recommend at a company does the purchasing themselves—in conjunction with your IT provider so that your tech spend can be tracked and managed to a budget.
The reason I say this is because it helps to remove the barrier in a clients mind that their IT provider is somehow taking advantage of them by selling them stuff.
This may come as surprise to you.
But the number of companies that I’ve seen over the years that don’t trust their IT providers pricing is staggering.
It’s all too common mindset that occurs whenever an IT provider sells stuff.
People trust DELL pricing more than they trust their IT providers pricing.
It’s just a fact of life.
And fixing this mindset isn’t worth the time.
I’ve even seen businesses pay more when buying something themselves.
And you know what?
They’re fine with it.
Because they trust a website more than they trust a person or an IT provider.
It’s sad but true.
I kid you not.
But there is hope.
Find a provider that can be transparent with their pricing.
If you find one, you might have a good shot at building a trustworthy purchasing relationship with your IT provider.
I’ve worked with several vendors in the past that would provide me their cost as well as their markup to provide transparency across every transaction.
Yes I know…
Transparency is a crazy option to most vendors.
But when you have it.
The whole purchasing process just works.
So next time you are out purchasing some tech for your business think about the value, the time, and the dollars spent on the transaction.
Is everything in balance?
Or do you need to rethink how your company does it’s purchasing?