IT Procurement – Definition, Process + Examples

What is IT Procurement?

IT procurement utilizes automated software to manage tasks such as vendor analysis, contract management, and RFQs, enabling procurement teams to focus on strategic decisions rather than manual work. Traditional procurement processes are often slow and paperwork-heavy, requiring significant time for documentation and approvals.

With IT procurement systems, many of these steps can be completed digitally with just a few clicks. While software automates much of the process, such as sourcing, RFQs, and RFIs, the procurement manager remains responsible for oversight and final decisions. Overall, investing in IT procurement increases efficiency, reduces delays, and improves the effectiveness of procurement operations.

7 Steps of the IT Procurement Process

Below, we will explore seven essential steps that guide organizations in creating long-term value with their IT suppliers. These steps provide a structured approach, enhance decision-making, and support the development of stronger, more strategic IT supplier partnerships.

Step 1 – Sourcing Methodology

Before explaining how the IT procurement methodology works, it is important to differentiate it from the IT procurement strategy and IT sourcing policy.

The IT procurement methodology is the structured framework that guides the entire IT sourcing process, serving as a roadmap to achieve long-term value with technology suppliers. The IT procurement strategy is the specific plan developed within this framework to optimize costs, reduce IT-related risks, and promote technology innovation. Meanwhile, the IT sourcing policy provides the overarching rules and guidelines to ensure that all IT procurement activities comply with organizational standards, cybersecurity requirements, ethical principles, and regulations.

Once these distinctions are clear, the first step is to define the business IT requirements and strategic technology objectives. This ensures that everyone involved understands the expected outcomes and the value the organization aims to achieve through IT procurement.

Next, it is essential to secure management support and align key stakeholders across IT, finance, and operational departments, as IT procurement requires cross-functional collaboration. After that, a dedicated IT procurement team is formed to lead the process and implement the methodology effectively.

The team then conducts thorough analyses, including IT spend analysis, supplier market analysis, risk assessment, technology performance review, and portfolio analysis. The insights gained from these analyses are interpreted to define the IT procurement methodology, guiding subsequent sourcing decisions and supplier engagements.

Step 2 – Market Research

In IT procurement, the process begins with understanding the IT requirements and overall objectives of technology sourcing. Before engaging IT suppliers, the procurement team must conduct thorough market research to gather insights that will guide vendor selection and sourcing decisions.

IT market research helps identify the most suitable technology vendors, understand market trends, assess cybersecurity and operational risks, and determine the total cost of ownership for IT solutions. For example, if a company plans to implement a cloud infrastructure solution, the team needs to know which suppliers offer the required technology, their pricing models, delivery capabilities, service quality, and support options.

Key questions during IT procurement market research may include:

• Who are the current IT suppliers, and what is their performance history?
• Are there alternative IT vendors available if the primary provider cannot meet demand?
• What are the technology trends, licensing costs, and potential risks for the IT category?
• Are there innovative solutions or emerging technology providers that could provide better value?
• How will IT infrastructure constraints impact the company’s strategic goals and budget?

This market research provides critical data for the next steps of the IT procurement process. Insights such as vendor capabilities, pricing, support services, and technology innovation potential form the foundation for developing IT sourcing strategies and making informed decisions.

Step 3 – Request For Information (RFI)

In IT procurement, the third step involves gathering detailed information not only from potential technology vendors but also from internal stakeholders, such as IT, operations, and finance teams that will rely on the IT products or services. This ensures that procurement decisions align with both operational IT needs and long-term technology strategy.

The RFI helps determine the exact IT requirements, including software or hardware specifications, volumes, service levels, security requirements, and budget constraints. Key questions at this stage include:

• Which business units require the IT solution?
• What are the quantity, licensing, and duration requirements?
• Are there existing IT suppliers, and how reliable are they?
• Is there potential to engage new or innovative technology vendors?
• What technical, cybersecurity, or compliance standards must be met?

Once sufficient information is collected, it is reviewed and analyzed to inform budget allocation and the next procurement steps. Using RFIs in IT procurement allows the team to compare multiple technology vendors, uncover market options, and avoid reliance on a single source, ultimately supporting better value, innovation, and risk mitigation.

Step 4 – Request For Quotation (RFQ)

In IT procurement, the RFQ is the step where the procurement team formally requests detailed pricing and service information from shortlisted technology suppliers. This allows the organization to compare vendor offerings based on cost, quality, delivery, and other strategic IT criteria.

Key questions to address in an RFQ include:

• Does the IT supplier have the capacity and infrastructure to meet our technical requirements?
• Where are the IT products or services sourced from, and what are the delivery or implementation timelines?
• What are the unit costs, licensing fees, support costs, or total cost of ownership?
• Are there any current supply or technology constraints that could impact delivery?

Once vendors respond, the IT procurement team evaluates the quotations in combination with prior market research and RFI insights. This analysis helps identify the most competitive, reliable, and strategically aligned technology suppliers, setting the stage for negotiation and long-term partnership development.

Step 5 – Negotiation Phase

The negotiation phase in IT procurement is a critical step where the procurement team works with vendors to secure the best overall value, not just the lowest price. Negotiations focus on total cost, technical quality, delivery and implementation timelines, risk-sharing, innovation, and long-term IT partnership opportunities.

Key considerations during this phase include:

• Are the vendor’s capabilities sufficient to meet current and future IT demands?
• Are there opportunities for volume discounts, bundled services, or performance-based incentives?
• How flexible is the supplier regarding delivery schedules, payment terms, software updates, or service levels?
• Who are the key contacts on both sides to ensure smooth communication and follow-up?

Successful IT procurement negotiations rely on the insights gathered from market research, RFIs, and RFQs. The goal is to establish mutually beneficial agreements that maximize value, reduce risks, and strengthen the long-term technology supplier relationship.

Step 6 – Contracting Phase

In IT procurement, the contracting phase formalizes the agreements reached during negotiations, ensuring that all terms, conditions, and performance expectations are clearly documented. Contracts cover pricing, delivery or implementation schedules, service levels, risk-sharing, compliance requirements, cybersecurity, and long-term partnership obligations.

During this phase, the IT procurement team should ensure:

• All agreed-upon terms, KPIs, and obligations are clearly defined in the contract.
• Supplier responsibilities, including implementation timelines, technical support, and security standards, are explicitly stated.
• Payment terms, penalties, and incentives are properly documented to prevent disputes.
• All relevant documents and agreements are stored securely for future reference and audits.

A well-structured contracting phase ensures that both the organization and the IT supplier have a clear understanding of expectations, supports ongoing vendor performance management, and provides a foundation for future procurement initiatives.

Step 7 – Supplier Relationship Management (SRM)

The final step in IT procurement is SRM, which focuses on building and maintaining strong, long-term partnerships with both selected and potential IT suppliers. Maintaining good relationships with all technology vendors ensures alternatives are available for future IT procurement needs and supports competitive advantage.

In this phase, active collaboration with key IT suppliers is essential to ensure they meet contractual obligations, deliver agreed-upon technology solutions, and contribute to strategic technology goals. Regular communication, performance monitoring, and feedback exchange help identify improvement opportunities, mitigate IT risks, and foster innovation.

SRM in IT procurement goes beyond basic transactions, emphasizing trust, transparency, and alignment with shared IT objectives. By nurturing these relationships, organizations can enhance IT resilience, drive continuous improvement, and achieve sustainable long-term value from their technology supplier partnerships.

3 Real-Life Examples of IT Procurement

1. Walmart’s Digital Procurement Transformation

Walmart, one of the world’s largest retail companies, has modernized its IT procurement through the integration of digital tools, automation, and advanced sourcing platforms. The company implemented e-procurement systems that connect supplier data, purchase orders, and inventory in real-time, enabling automated order generation and delivery tracking. This approach allows IT teams to quickly identify alternative suppliers and make informed decisions without manually managing paperwork.

With digital procurement, Walmart also leverages AI and automated processes to improve supplier negotiations and optimize IT resource costs. For example, the company experiments with AI chatbots for contract negotiations and management, increasing efficiency and reducing the time needed to finalize agreements. This IT procurement transformation improves cost and supplier performance visibility across the global network, strengthens risk management, and enables a more agile response to market changes.

2. Balfour Beatty’s Sustainable IT Procurement Initiative

Balfour Beatty, a UK-based infrastructure and construction giant, implemented an IT procurement process focused on sustainability in acquiring laptops for its employees. The company opted to purchase 5,700 remanufactured HP laptops, which are technically equivalent to new devices but have significantly lower costs and carbon footprint. This approach allows Balfour Beatty to meet sustainability targets and reduce e-waste without compromising performance.

The IT procurement process for these devices included market evaluation, sample testing, and collaboration with specialized suppliers such as Circular Computing and Procurri to ensure quality and logistical support. The result was a significant reduction in total procurement costs while achieving ESG (Environmental, Social & Governance) objectives. 

3. Atos and Circular Computing Sustainable IT Procurement Contract

Atos, a global IT services company focused on digital transformation, executed a strategic IT procurement contract within its Net Zero Transformation portfolio through a partnership with Circular Computing. The goal of this contract was to deliver carbon-neutral remanufactured laptops for clients, including a large public sector contract worth approximately £150 million for modernizing IT services for the UK DEFRA (Department for Environment, Food & Rural Affairs). Through this process, Atos implemented IT procurement with a clear focus on ecology and reducing the emissions associated with large-scale IT equipment procurement.

This example illustrates how IT procurement can become a crucial component of corporate sustainability goals, transitioning from traditional sourcing to products that minimize carbon footprints and align with national environmental policies. The strategy includes detailed market assessment, quality standardization, and long-term agreements with partners who share the same ESG objectives.

5 Key Steps to Create an IT Procurement Strategy

When creating an IT procurement strategy, organizations should focus on the following key steps to ensure efficiency, risk control, and data-driven decision-making.

1. Create a simplified purchasing chain

Your procurement process should not be too difficult to understand. The simpler it is, the better your procurement software can create the necessary adjustments for each process. This clarity not only simplifies overall operations but also ensures better collaboration among team members, leading to more efficient outcomes.

Example: Imagine your IT company procures software licenses for multiple departments. Instead of each team submitting individual requests and maintaining separate records, a single, simple procurement workflow is created: employees fill out a standardized form in the IT procurement system, which automatically routes the request to the manager for approval and then to the purchase order system. This streamlined chain makes all steps visible in the software, reduces errors, and accelerates the process because everyone knows when and where they need to intervene.

2. Managing supplier risk

The more aggressive your procurement process is, the more risk it’ll draw in. Make sure that your procurement software can be managed to handle risk during the whole procurement process. Additionally, you can further mitigate potential pitfalls by regularly updating and training your team on risk management strategies.

Example: Suppose you are sourcing servers from multiple vendors. The IT procurement software can track each supplier’s performance history, including delivery delays or quality issues. If the system detects that a supplier has increased risk (e.g., reputation or unstable delivery), it automatically alerts the team to consider an alternative supplier or negotiate additional guarantees. Additionally, the team regularly undergoes risk assessment training and uses scenario planning to be prepared for potential procurement chain disruptions.

3. Consolidating the supplier database

Your procurement software should be at the center in consolidating all supplier databases. It should have all records of important transactions created throughout the procurement process. This way, you don’t have to look or ask your team for specific invoices. Moreover, having a centralized system improves accountability and allows for quicker decision-making when addressing supplier inquiries.

Example: Your company uses different IT vendors for hardware, software, and cloud services. Instead of scattered information in emails and Excel sheets, all records are entered into a centralized IT procurement system. When someone on the IT team needs to check transaction history or retrieve an invoice, everything is available in one place. This allows faster decision-making, easier payment tracking, and greater accountability since approvals and request origins are clearly visible.

4. Building predictive analytics

The beauty of automated systems is that they can sometimes predict the flow of a process through analysis. The more advanced procurement software can even create the flow for you. This will allow you to proactively address potential bottlenecks and optimize procurement strategies.

Example: Imagine you procure laptops for employees and want to predict when new purchases will be needed. Advanced IT procurement software analyzes past usage patterns, hiring plans, and equipment failure data. The system can suggest when to order new devices or reduce procurement, avoiding unused inventory and reducing costs. It can also predict potential delivery bottlenecks and recommend alternative suppliers in advance.

5. Incorporating the department into the global system

With the help of your procurement software, your procurement team can also check for information regarding the procurement process in the global system. This access to real-time data helps make informed decisions and stay ahead of market trends.

Example: Your IT team is part of a multinational company with a centralized procurement platform. Using the software, the team can see global orders, vendor availability, and price changes in real-time.
For instance, when planning to purchase cloud services, the system shows the best current prices, which vendors have capacity, and which regions have a lower risk of service disruption. This enables the team to make fast, informed decisions aligned with the company’s global strategy.

Conclusion

As technology continues to evolve, procurement managers are urged to stay abreast of these trends and leverage the power of IT procurement software to drive efficiency, mitigate risks, and contribute to the global success of the procurement process.

The synergy between adept procurement professionals and cutting-edge IT procurement solutions holds the key to navigating the complexities of modern procurement in 2026 and beyond.