Having the right IT infrastructure in place is key for success when entering a new market. Discover how to nail your IT procurement strategy.
The decision to scale your business operations into another territory is never an easy one to make. But new market growth and economies of scale can have a significant, positive impact on your organization’s bottom line. Like any large-scale investment, there are several planning considerations you need to make before you have people on the ground and establish a HQ —particularly when it comes to your IT procurement.
In this blog we’ll look at the most common IT procurement challenges faced by organizations looking to scale in EMEA, and offer a four-point checklist on how to overcome these challenges to deal with growth—regardless of speed or scale.
Failing to prepare is preparing to fail
If you’re considering entering a region like EMEA, it’s likely that you don’t have an existing IT vendor relationship. In fact, your existing IT procurement function may reside in-house. But when you’re looking to scale in new markets, preparation is everything. In an effort to reduce costs, it may be tempting to keep your IT procurement in the US, but this can create several challenges—regardless of whether it’s in-house or outsourced—including:
- Lack of control—from managing several vendors across a diverse territory
- Vendor cost and complexity—due to vendor proliferation
- Non-compliance—when dealing with different and wide-ranging legislation
- Incorrect product specifications—which aren’t fit for purpose
- Sourcing delays and business downtime—that can create significant inefficiencies in your new operation
- Distribution and delivery—including the ability to react fast to, and fulfil requests
- Stockpiling—which takes up space and devours capital expenditure
The issue of managing IT procurement from a different time zone adds another layer of complexity. You can already find yourself on the backfoot before you’ve made the first step into your new market. So, what’s the answer?
Four IT focus areas for new market growth
We believe there are four areas which need careful consideration to build an IT procurement function fit for scale in new markets.
Your existing IT procurement strategy has served you well in the US, but when looking to new markets, there’s no one size fits all approach. Having a strategy that’s bespoke to your target market is key to addressing the major challenges—and fostering growth. What’s more, creating a roadmap to support this expansion is the most effective and efficient way to ensure your organization, your people, and your infrastructure are ready for growth.
You also need to decide whether you’re going to manage IT procurement internally or outsource it. Outsourcing is most certainly the lowest risk option. A good vendor will be able to provide the infrastructure, expertise, and vendor relationship management that you simply can’t replicate yourself without significant risk, and investment of time and capital. And their experience in your target market means that invaluable knowledge is already in place at your disposal. You can rest assured any local legislation will be accounted for. Simply, an outsourced IT procurement vendor will help to mitigate risk and enable you to capitalize on new opportunities.
As an organization grows, its policies and processes need to scale with it. Whether it’s a framework for procurement or rules around spending, these are all vitally important factors necessary to maintain control over costs and assets. The checks and balances you have in place to manage procurement spend today may no longer be fit for purpose in the future. And this will lead to issues and delays in getting the equipment or services you need down the line. It could be in the form of a rule that ensures spending requests over $25,000 need to be approved by the CIO or CFO, for example—or even a sense check by managers when purchasing a large number of assets. Either way, enhanced checks and balances will give you the ability to make swift and well-informed decisions in the future.
When thinking about your organization, you can’t underestimate the importance of having people with region-specific knowledge—including those with a comprehensive understanding of its challenges. Heading up this team could be a dedicated procurement lead, but it could also be a COO or CTO. Alternatively, an outsourced European IT fulfilment services provider can help centralize all your vendor and logistics management from day one. As the experts in this field—and the region you’re operating in—they can help you initially scale up while you appoint new people “on the ground”.
We’ve already covered the importance of checks and balances in your procurement strategy, and key to managing this is the right software or platform that can automate spend report analysis. But even with the best software and automation in place, without the right configuration and management, it can create more problems that it will solve. This is where the value of an expert IT procurement vendor comes into its own—enabling full procurement infrastructure analysis and checks and balances as part of the overall service.
Scaling IT procurement: your road to new market growth
Scaling your operations into EMEA doesn’t need to be difficult—and key to this is having an actionable IT procurement strategy, backed by the expertise of an experienced vendor. What’s more, as your organization grows, this experience can become ever more critical as you explore the possibilities of cross-border trade and even satellite offices.
If you’d like to learn more about IT procurement strategy for scalability and procuring IT in EMEA—including tips for success in cross-border operations—read our eBook.