What is IT procurement? A complete guide for modern organisations

Technology has become one of the biggest spending categories for many organisations, yet IT procurement is often treated as a transactional process instead of a tool for unlocking financial benefits. Effective IT procurement goes beyond purchasing hardware and software. It’s about optimising how you make purchases and manage vendor relationships. 

Every IT investment should directly support your business goals and deliver measurable returns. A modern approach can help streamline procurement processes while preventing shadow IT, compliance risks and missed cost-saving opportunities.
 

Defining IT procurement in a modern context

IT procurement is the process of identifying, sourcing, buying and managing technology products and services. Unlike general procurement it focuses specifically on information technology needs including hardware, software, cloud infrastructure and managed services.

Technology markets are always evolving. New solutions replace old ones. Updated software features require dynamic system integrations. This complexity and change of pace distinguish IT procurement from regular purchasing. Organisations must balance security standards and total cost of ownership with innovation, making processes more efficient and managing risk.

IT purchasing decisions can impact every employee from an executive in your finance team to your operations managers. For this reason procurement teams must collaborate across departments so that the business’s immediate needs align with its long-term business strategy.
 

What procurement includes

IT procurement covers a wide spectrum of technology products and services. Common examples include:

• Hardware and physical IT assets: laptops, mobile devices and servers

• Software and applications: software licences, productivity tools and security software

• Cloud services and infrastructure: infrastructure as a service (IaaS), platform as a service (PaaS) and hybrid cloud solutions

• IT services and support: managed IT services, systems training and maintenance contracts.

Each category requires a different approach. For instance hardware purchases typically involve capital expenses with depreciation timelines while cloud services operate on operational expenditure models with monthly or annual subscriptions.
 

From purchasing to value-focused procurement

Traditional IT purchasing focuses mostly on acquiring specific products and services at the best price. Technology is treated as a commodity. But after years of accelerated innovation with technology now at the centre of business operations this approach is no longer sufficient.

Modern procurement management has evolved. In the past it focused solely on minimising costs, but today it is an essential function that invests in technology based on how well it contributes to your organisation.

Sophisticated purchasing solutions are key to this transition as they enable procurement teams to:

• Maximise employee productivity through workflow automation

• Optimise purchasing with enforced buying controls ensuring this aligns with business needs

• Use data to support revenue growth and reduce costs.
   

Why alignment between IT and finance matters

Technology procurement often represents one of the largest spend categories in corporate budgets, yet IT and finance teams typically operate with different priorities.

While finance focuses on budget management, cost control and financial planning IT must balance budget constraints with making organisational processes more efficient and responding quickly to security threats.

However when aligned these departments complement each other. Through shared metrics and project planning IT and finance can work together to standardise approval workflows, create reliable audit trails and develop initiatives based on real-time spend analytics.
 

Common challenges in IT procurement

Traditional procurement isn’t just inefficient; it can be dangerous. When IT procurement goes wrong you’re left with limited organisational control, inflated costs and increased exposure to risks.
 

Shadow IT and compliance risks

Shadow IT (using technology products or services without company approval) is a common issue for modern organisations. Without effective controls in place employees can easily bypass official channels to make unauthorised purchases that undermine procurement and security.

Cybersecurity risks caused by unapproved IT products can affect your ability to safely manage data and meet regulatory requirements. 
 

Fragmented supplier management

When supplier management is fragmented you are less able to maintain clear oversight of supplier relationships and negotiate better contracts based on reliable performance data. This lack of insight also makes it difficult to optimise supplier portfolios resulting in higher costs and more manual effort.
 

Lack of centralised reporting

Centralised reporting and analytics are essential for making practical decisions around IT spending. Without them you can’t accurately determine which departments are spending the most on technology or which suppliers are delivering the most value to the organisation. It also becomes harder to establish informed budget strategies for each spend category.
 

Manual approval workflows

Manual approval processes can create bottlenecks in the procurement cycle. They are more error-prone than automated solutions and make it more difficult to enforce policy compliance.

Furthermore manual processes sap operational efficiency. A 2025 UK Government report found that the inefficiencies caused by the use of old, outdated technology cost the public sector £45 billion annually.
 

Key stages of the IT procurement process

Every stage of the IT procurement process supports continuous improvement and cost-effective purchasing. By understanding these roles you can establish best practices to get the most out of your procurement lifecycle.
 

Needs assessment and stakeholder alignment

IT procurement begins with a clear definition of your organisation’s IT needs. This involves working with stakeholders across the business to define:

• What goods or service they need

• Why they need these goods or services

• Time constraints

• Success criteria and expected outcomes.

Effective needs assessments come from understanding the reason behind stakeholder requests. Will the technology enhance productivity or save the organisation money? Is it essential for continuing daily operations or for enabling new capabilities?
 

Supplier identification and vetting

Once requirements have been approved your procurement team must identify and evaluate potential suppliers. Each supplier needs to be vetted on factors beyond price such as security practices, financial stability and reliability.

Supplier vetting is especially important when procuring software. Your organisation will likely rely on the provider for ongoing technical support, troubleshooting, security maintenance, integration assistance, software training and feature upgrades.
 

Purchase approval and contract negotiation

The next step in the IT procurement process is securing approvals from stakeholders across the organisation. This often requires collaboration between procurement, finance, legal and IT to ensure all aspects of the purchase are thoroughly evaluated. Modern solutions can streamline this workflow by automatically routing purchase requests to the correct approvers using pre-defined rules.

Once the purchase is signed off your procurement team must negotiate fair and beneficial contract terms with the chosen supplier. This involves addressing terms like service level agreements, costs, renewal and termination conditions, data ownership and support response protocols.
 

Order management and delivery

After establishing the supplier contract and sending your purchase order your procurement team works with the supplier to manage the delivery process. For hardware this typically includes coordinating logistics, receiving protocols and delivery expectations. For software it can involve systems migration, onboarding processes, user access management and testing.
 

Performance monitoring and renewal management

The procurement process isn’t finished after your goods or services have been delivered. Ongoing supplier performance monitoring is vital for ensuring vendors continue to meet expectations and comply with contract terms. It also lets you verify whether your technology investments are fulfilling the expectations you identified during the needs-assessment stage.

For subscription-based IT purchases such as software as a service (SaaS) products and cloud services, proactive renewal management is crucial for making the most of your technology spending. Regularly monitor metrics like usage, productivity improvement and service level performance to assess whether these purchases are meeting the evolving needs of your organisation. 

It’s equally important you establish clear offboarding and data migration procedures before contracts end. This way you can smoothly extract your data, transfer it to new systems and terminate access without disruptions to operations if and when the time comes.
 

How to modernise IT procurement

Traditional IT procurement can be error-prone, slow and expensive. But when you rethink your buying operations you can ensure purchasing becomes less reactive and more focused on delivering practical benefits that align with your organisation’s financial goals.
 

Centralise spend visibility with analytics

Comprehensive spend visibility is the backbone of effective IT procurement today. Without it you’ll struggle to understand the potential risks and opportunities involved in optimising supplier management, streamlining procurement workflows and minimising company expenditure.

Invest in a sophisticated procurement analytics solution like Amazon Business to aggregate spend across multiple sources and develop a holistic view of where and how money is spent. This increased transparency will allow you to identify patterns like unauthorised spending, duplicate subscriptions across departments and lagging spend categories.
 

Integrate procurement systems

When your procurement systems operate in silos there’s a higher risk of duplicate data entry and limited visibility which results in inefficient spending. This fragmented approach to procurement provides a poor user experience and encourages employees to bypass company policies to get what they need.

To better understand your organisation’s needs and ongoing performance, integrate digital procurement solutions with existing systems like your IT service management tools and your enterprise resource planning (ERP), accounting and inventory management software. These integrations both keep data consistent and streamline purchasing workflows while providing users with a unified experience.
 

Standardise workflows and approvals

While some procurement processes need to be flexible enough to support differing requirements an inconsistent workflow leaves you open to delayed approvals and off-policy spending.

Standardise your IT procurement process with clearly defined approval rules, hierarchies and purchase requisition workflows. These may include:

• Establishing pre-approved supplier catalogues for regular purchases

• Creating unified documents for requests

• Developing a supplier onboarding checklist so that key information is never missed.
   

Encouraging diversity of suppliers

Supplier diversity contributes to fostering economic growth, social equity and innovation through fairer access to contracts and partnerships. A 2024 study by supplier intelligence platform Supplier.io found that 66% of businesses have implemented supplier diversity management solutions, while 59% are using registration portals to improve how they manage their diverse supplier bases.

For UK organisations this isn’t just a kind gesture; it’s essential for complying with the requirements laid out in the Procurement Act 2023. Namely that for covered procurements contracting authorities must ‘have regard to the importance of […] maximising public benefit’ and ‘treat suppliers the same unless a difference between the suppliers justifies different treatment’.

To ensure you meet both ethical and legal obligations incorporate supplier diversity metrics into your performance tracking and treat it as an organisational priority rather than a nice-to-have consideration.
 

The future of IT procurement

Few functions evolve as rapidly as IT procurement does to keep up with ongoing changes in technology, business models and regulatory compliance standards. To give your organisation the competitive edge prepare for these changes by understanding the capabilities and trends driving modern procurement best practices.
 

Predictive analytics that foster smarter buying

The next generation of procurement analytics goes beyond simple analysis to predicting future outcomes and prescribing practical solutions. 

Using AI-powered automation and machine-learning functionality modern solutions can identify hidden purchasing patterns and forecast IT requirements based on business growth trajectory. These minimise the need to wait for departments to request technology and allow you to negotiate favourable contract terms in advance.
 

Responsible purchasing as a technology imperative

Organisations face increasing pressure from governments, customers and investors to enact socially responsible purchasing (SRP). For IT procurement this means incorporating criteria like energy efficiency, supply chain sustainability and ethical labour practices into supplier evaluations.
 

The link between procurement maturity and innovation

On top of increasing your efficiency mature IT procurement facilitates innovation through stronger supplier relationships and early identification of emerging technologies. It allows you to experiment and deploy new solutions safely while controlling risk and costs.

In its traditional form procurement has run the risk of acting as a barrier to innovation. Mature procurement however makes room for the buyer–supplier collaboration and knowledge sharing needed to quickly learn, test and implement new technologies.
 

Building a smarter IT procurement strategy

The journey from traditional, reactive IT purchasing to optimised, proactive IT procurement doesn’t happen overnight. It requires focus and commitment to improving your spend management processes and strategy.

To be successful you must first assess the maturity of your procurement function and identify the biggest challenges and opportunities to optimise it. Speak to one of our procurement specialists today to discover how Amazon Business can give you invaluable insights and make the switch from fragmented purchases to managed spend.