IT Procurement: Definition, Types, and Benefits

What is IT Procurement?

IT procurement is buying and running technology aligned with your organizational goals. 

Any organization that relies on IT needs a straightforward approach to sourcing the products and services it depends on to function effectively. These practices vary widely—some might be quick and informal, while others are highly detailed and strategically planned.

IT procurement begins with a thorough assessment of your business's technology needs. You then find the right solutions, connect with vendors and services, and execute the purchases. 

Thus, it becomes the rudimentary phase for establishing and maintaining a scalable, robust IT infrastructure that includes physical devices, software solutions, and network components. 

Is Procurement Different from Purchase?

Yes. They’re two different processes.

Procurement involves more than just randomly placing a buying order. It begins with identifying your business’s needs and includes steps like supplier evaluation, contract negotiation, and record-keeping.

In contrast, purchasing is a more minor component or subset of procurement. It’s merely concerned with buying, such as placing and managing orders.

Procurement is a broader, more strategic function. 

It takes a proactive approach, starting with analyzing your organization's needs and deciding on the best way to fulfill them. Purchasing, on the other hand, is more task-oriented and reactive. It executes transactions once the need has already been identified. 

Types of Procurement in IT

Don’t expect a one-sock-fits-all approach in procurement. 

Organizations have different needs, and your chosen method will decide your impact costs, efficiency, and scalability. 

Traditional procurement

Traditional procurement is a straightforward method of purchasing IT equipment, software, or services outright. This usually starts with a Request for Quotation (RFQ) to gather vendor bids, followed by issuing a purchase order (PO) to seal the deal. 

With traditional procurement, you have complete ownership and control over assets. However, be prepared for challenges like managing hardware lifecycles and handling software licensing models. For example, choosing between perpetual licenses and subscriptions can affect both costs. 

Traditional procurement works best when you need long-term stability and control over your infrastructure.

Leasing

Leasing is an attractive alternative to outright purchases as it lets organizations rent IT assets for a fixed period. 

There are two main types: operating leases and capital leases. Operating leases are better suited for short-term needs or fast-paced environments, as they don’t transfer ownership. In contrast, capital leases are more like purchases, with an option to own the equipment at the end of the term. 

Leasing reduces upfront costs, but you must analyze the total cost of ownership (TCO) and ensure lease agreements include upgrade options to prevent obsolescence.

Read More: Buying or Leasing IT Equipment? Which Makes More Sense For Your Business

Managed services procurement

Managed services procurement involves partnering with an MSP to handle specific IT operations. These services, often governed by detailed Service Level Agreements (SLAs) offer you the infrastructure, platforms, or software as a subscription-based model.

MSPs take care of maintenance, monitoring, and scaling, which makes it best suited for businesses lacking in-house expertise. However, a trade-off is vendor lock-in and reduced control over configurations. A thorough SLA review is a must to avoid unpleasant surprises like inadequate uptime guarantees or slow issue resolution.

Cloud procurement

Cloud procurement includes Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). 

For instance, IaaS lets you rent virtual machines and storage, PaaS provides a foundation for app development, and SaaS delivers ready-to-use software. While the cloud offers unmatched scalability and convenience, you must review the provider’s security certifications (like SOC 2 or ISO 27001), API integration prowess, and data portability to mitigate risks.

Co-location services

Co-location services are the best option for organizations that need physical hardware but lack the space or resources for an in-house data center. 

In this model, companies rent space in a third-party data center to house their servers. However, you need to be careful with the power and cooling systems. Also, ensure high-speed connectivity and physical security measures like biometric access controls are standard.

The main draw is that co-location combines the benefits of owning your hardware with the reliability of a professional data center environment.

Outsourcing

Outsourcing is another popular procurement method in which organizations delegate IT functions—like help desk support or infrastructure management—to third-party vendors. 

Outsourcing can help reduce costs, mainly when vendors stick to standardized frameworks like ITIL (Information Technology Infrastructure Library). However, you need to monitor performance using clear KPIs like uptime and Mean Time to Repair (MTTR). 

Hybrid procurement

Finally, hybrid procurement uses multiple methods to suit complex needs. For example, you might lease hardware while also depending on cloud services for scalability. 

This approach needs high levels of interconnectedness, often courtesy of middleware or APIs, for friction-free communication between systems. Monitoring tools that unify on-premises and cloud resource management also enhance visibility and control.

💡Streamline IT Procurement & Asset Management with Workwize

Managing IT procurement across multiple regions is time-consuming, expensive, and complex. Traditional processes often involve:

❌ Delays due to multi-vendor coordination

❌ Inconsistent pricing and product availability

❌ High administrative overhead

With Workwize, IT teams can seamlessly procure, deploy, manage, and retrieve devices—without juggling multiple vendors.

🚀 How Workwize Transforms IT Procurement:

✅ Global IT Procurement, Simplified: Order MDM-enrolled laptops, peripherals, and office equipment from a centralized platform—buy or lease through our extensive global supplier network.

✅ Fast & Cost-Effective Global Delivery: Ship devices to 100+ countries in just 5–7 days using local warehouses to reduce costs, lead times and customs delays.

✅ Automated Asset Tracking & Retrieval: Manage the entire IT asset lifecycle—from procurement to retrieval and disposal—without manual intervention.

✅ Minimized IT Workload: Reduce administrative overhead with automated procurement, onboarding, and offboarding workflows.

 HighLevel Case Study: $1.4M Annual Savings

A fast-growing SaaS company, HighLevel (991 employees across the US, India, and the Philippines), faced:

❌ Shipping delays due to fragmented IT procurement

❌ Difficulty standardizing IT equipment across global locations

❌ Heavy administrative burden from managing multiple vendors

With Workwize, they:

✔ Eliminated procurement bottlenecks by consolidating vendors into a single platform

✔ Standardized equipment across locations, ensuring consistency for remote teams

✔ Automated device retrieval & tracking, reducing IT overhead and saving $1.4M annually

Take Control of Your IT Procurement: Book a demo today and see how Workwize can streamline your IT operations!

The Challenges of IT Procurement

Procurement is a challenge in itself because you and your teams are tasked with a range of responsibilities. It is complicated and high-stakes—you will communicate with vendors, run compliance checks, manage payments, and analyze payment trends. 

At the same time, you have to handle hundreds of purchase orders, vendors, and suppliers. Some of the significant challenges you are likely to face with procurement include:

• Contract management: Procurement processes are at risk during inflation if contract lifecycle management isn’t efficient. This can lock you into pricing changes that you can’t afford. There’s also the hassle of managing and maintaining great vendor relationships. 

If you partner with us at Workwize, you quickly do away with the need for managing multiple vendors. Simply tell us what you need and we’ll get it delivered worldwide. 

• Source-to-Pay (S2P) transformation: Enterprise procurement software accelerates processes, increases transparency, and improves decision-making. However, implementing S2P tools is not easy. Transitioning to digital procurement tools is often disruptive without a clear plan.

• Inflation: Rising prices for goods and services make it harder to stick to budgets while maintaining quality. Inflation adds unpredictability and forces difficult decisions. Sometimes, fixed-price agreements become untenable as costs climb, which can lead to renegotiations and strained supplier relationships.

• Talent shortage: The need for procurement professionals with expertise in digital tools and analytics outpaces supply. Plus, overworked staff experience burnout and reduced efficiency in procurement functions.

Read More: Hardware Procurement Automation: All You Need to Know

A Reference Model of Organizational IT Procurement

Every company must have a flexible IT procurement framework to simplify the management of procurement activities. Such a framework facilitates stakeholder communication and guides the acquisition of essential IT hardware, software, and systems. 

We can break down a typical IT procurement framework into two sub-process groups—implementation and management.

Let’s find out what each group involves:

Group 1: IT procurement implementation

This group involves everything from defining initial requirements to signing contracts and ensuring timely delivery. Basically, it involves you overseeing the entire lifecycle of IT procurement for individual products or services. 

Step 1: Define the requirements

The process begins with you identifying what’s needed. You review the business case for the IT investment and determine if it’s justified. If the investment doesn’t justify the returns, you scrap the plan. Otherwise, you go ahead. 

Once you get the green light, pay attention to specifics like technical specifications, costs, and benefits, and again, verify if the procurement is worth pursuing. 

After that, your duties include

• Forming project teams to oversee the process.

• Carrying out cost-benefit analysis and risk assessments.

• Exploring alternative solutions and evaluating their potential.

• Collecting the necessary approvals to kick off the procurement process.

This introductory assessment also tells you what procurement method you will use.

Step 2: Acquiring the products or services

Once you finalize the requirements, you set your sights on finding and engaging with suppliers. You are responsible for connecting with the right vendors, choosing the options that benefit you the most, and securing favorable terms. 

This is also where you identify strategic sourcing options and establish effective communication channels with the vendors. Once the suppliers are in hand, review the proposals and start shortlisting candidates. Remember not to adhere to the suppliers' terms complacently; always negotiate delivery timelines and contract terms if there is scope.

Step 3: Executing the contracts

After you proceed to transact with the vendor, all your attention needs to be focused on fulfilling contractual obligations. This stage covers everything from order management to product installation and post-purchase services.

You will also be tasked with coordinating the delivery of products or services, administering contracts, and ensuring compliance with terms. That’s not all; oversee system installations and testing to avoid issues later on.

Group 2: IT procurement management

The second component of our model IT procurement framework is concerned solely with governance. This means overseeing and managing the processes that apply universally to all organizational purchasing activities.

The processes that make up this group include;

Vendor management

In a nutshell, it's strengthening customer-supplier relationships to maximize value for the business. 

Effective vendor management involves creating plans for managing supplier portfolios, maintaining strong relationships with IT vendors, and regularly monitoring supplier performance. 

Clear communication with contractors and consistent monitoring of procurement activities are essential to this process.

Asset management

Asset management is where you ensure that all IT assets are utilized effectively throughout their lifecycle. 

Key activities in this stage include

• Developing and updating asset management strategies.

• Managing information systems related to IT asset usage.

• Conducting cost analyses to determine the total cost of ownership.

• Establishing and enforcing policies for asset disposal.

Quality Management

It is essential to maintain high standards for IT products and services. Quality management enforces this through continuous improvements in procurement processes. This sub-process also verifies that all IT assets meet the required standards before they are fully implemented.

Core activities here involve:

• Conducting product and acceptance testing.

• Performing quality checks on purchased items.

• Reviewing the performance of procurement contractors.

• Auditing facilities for compliance with quality benchmarks.

Together, these sub-processes provide the structure needed for effective IT procurement management. By integrating these practices into a cohesive framework, you can establish a reliable foundation for purchasing activities.

Benefits of Streamlined IT Procurement

Optimizing your IT procurement guarantees measurable technical and operational advantages. Over 28% of procurement and sourcing specialists agree that proper procurement systems made them much more productive (that too over just one quarter!).

• Increased productivity through optimization: If your process is optimized, you save on procurement cycle times, thanks to predefined workflows that cut down manual dependencies. This is all the more important for cloud services, where pay-as-you-go models need precise consumption monitoring to avoid cost overruns.

• Better compliance and reduced risk: From a compliance perspective, standardized procurement workflows fit perfectly with frameworks like ISO 27001 or ITIL. This translates to fewer risks associated with data security breaches or non-conformance.

• Higher efficiency with automation: Automated procurement tools, such as e-procurement platforms, enhance this efficiency gain by integrating with ERP systems that track budgets, inventory, and approvals in real time.

• Reduced Total Cost of Ownership (TCO): A well-structured process reduces TCO by relying on bulk purchasing discounts, optimizing lifecycle management, and avoiding hidden contract fees. It also improves vendor management since you are actively keeping an eye on SLAs and KPIs for accountability. 

• Better finance management: According to IBM, the costs associated with purchasing technology account for a large percentage of business expenses, often ranging from 35% to over 70% of each sales dollar. These expenditures influence profitability and the strength and reliability of supplier relationships. In short, they impact your entire supply chain

What Lies Ahead for IT Procurement?

The biggest change we see on the radar is the digital transformation of procurement practices, which is fundamentally reshaping how procurement is approached. According to Deloitte, organizations that have already implemented digital procurement solutions are reporting a 30% to 50% reduction in processing time for routine IT purchases and a 15% to 20% improvement in pricing. 

Moving away from the traditional cost-center model, IT procurement is becoming a function that results in technology innovation and risk management. Thanks to advanced analytics, cost management is also experiencing much-needed improvement.

ML models analyze historical pricing data across hardware categories, software licenses, and cloud services to predict future cost trends with 85-90% accuracy. Visualization tools can create increasingly detailed breakdowns of IT spending across departments, projects, and vendors.

Last but not least, be prepared to hear about Robotic Process Automation, or RPA, a lot more. When a software license is nearing its usage limit, for instance, RPA bots automatically create purchase orders, route them for approval, and process the renewal with vendors. 

Get Hassle-Free IT Procurement With Workwize

Workwize simplifies global IT procurement by automating processes and managing the entire IT asset lifecycle, from sourcing to disposal.

Key Features of Workwize:

• Procurement: Access a global supplier network to minimize costs and logistics challenges.

• Deployment: Pre-configured laptops will be shipped worldwide within 5-7 days with your chosen MDM.

• Management: Centralized dashboard for real-time asset tracking and maintenance.

• Retrieval and Disposal: Automated workflows for secure offboarding and sustainable ITAD (IT Asset Disposal).

This lets you save up to 40 hours per month on manual tasks. Local sourcing and centralized invoicing can also reduce costs. Finally, local warehousing promotes sustainability with reduced CO2 emissions. 

Book a Workwize demo now to see how it can make your IT procurement a literal walk in the park.