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Chapter 11 - IT Procurement Planning and Strategic Sourcing

11.8 IT spend management

Strategic sourcing begins with a spend analysis and identification of commodities. Spend analysis is the structured process of critically analyzing a public body's IT spend and then using this information to make business decisions about to acquire needed commodities and services effectively and efficiently. This process helps optimize performance, minimize price, evaluate total life cycle management costs, and increase the value of each IT dollar spent. Spend management in conjunction with procurement planning may be used to achieve the following procurement objectives:

  • Understanding the potential for savings with a higher degree of certainty.
  • Revising sourcing approaches to generate savings.
  • Improving procurement processes and practices.

A broad overview of the spend management assessment process includes these steps:

  • Examine and collect data and establish baselines on what is being bought in current spending. (What is being bought where and for how much?)
  • Assess the supply market. (Who offers what?)
  • Identify leverage opportunities by evaluating top spending areas.
  • Identify savings opportunities and demand management opportunities.

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