Every cloud service and software license in your stack involved a procurement decision. Behind the scenes, IT procurement teams hunt for the right technology that contextually solves their business problems, all at the right price. Their decisions can either propel the business forward or hold it back. Technology procurement is a part of IT strategic planning that directly impacts operational costs and a company’s market position.
Plus, how organizations measure this success is changing. As the GEP Outlook 2025 explains, cost savings are usually more straightforward, but many new metrics are subjective and open to interpretation.
So, how do organizations adapt?
This guide unpacks what IT procurement involves, why it matters, and how organizations transform this function into a strategic driver.
What Is IT Procurement?
IT procurement standardizes the process of purchasing new software, IT services, and hardware, from sourcing, buying, managing, and renewing subscriptions. IT procurement turns scattered technology purchases into business assets while ensuring compliance, budget requirements, and technical needs. It requires you to carefully examine what you’re buying, why you need it, and how it fits your existing systems. It also eliminates duplicate software spending with centralized purchasing control. Effective IT procurement connects technology decisions directly to business outcomes and delivers measurable return on investment.
Why IT Procurement Matters
What impact does technology procurement have on business? Here’s why it’s worth paying attention to this practice.
1. Aligns technology with business outcomes
IT procurement connects technical possibilities to business realities. Strategic procurement teams clarify the problems new technology must solve before signing contracts. They ask the hard questions about integration requirements, user adoption barriers, and measurable success metrics. This discipline prevents the scenario where companies buy technology that looks great in theory but doesn’t solve specific challenges.
According to McKinsey, one international petrochemical player worked on all these dimensions as part of a significant project to transform its procurement performance. The company invested in new digital tools and analytics approaches and trained over 100 people to use them. It ran an in-depth analysis of its spending across more than 50 high-value categories, identifying total savings opportunities of around $100 million per year.
2. Prevents shadow IT proliferation
When official procurement channels feel too slow or restrictive, employees devise their own solutions. They may use unauthorized cloud services and create technical workarounds that aren’t in compliance. A Gartner prediction says that by 2027, 75% of employees will acquire, modify, or develop technology outside IT’s visibility, up from 41% in 2022.
This shadow IT creates security blind spots and unexpected costs. Structured procurement processes give employees legitimate channels to get the tools they need without resorting to shortcuts.
Leveraging Whatfix DAP, organizations can offer a sanctioned and engaging pathway to learning new software, reducing the temptation for employees to seek unapproved shortcuts. With step-by-step instructions and in-app guidance embedded within applications, Whatfix helps ensure that every user works with the most secure, compliant, and effective processes from day one.
Whatfix also provides an overview of software usage, identifies areas of user friction, and collects user behavior data to understand adoption, further enabling IT teams to maximize technology ROI and achieve business outcomes.
3. Eliminates tech stack redundancies
Around 43% of enterprise tech stacks are more complex than three years ago, and enterprise portfolios are expected to grow by 26% this year. However, most large organizations pay for multiple tools that do the same thing.
Marketing buys one analytics platform and sales purchases another with overlapping capabilities. A transparent approval process helps to prevent expensive overlap. Companies avoid paying twice for the same functionality when procurement provides visibility.
Whatfix Product Analytics delivers a consolidated view of software adoption across your organization. By monitoring usage data and user engagement across tools, you can quickly pinpoint overlaps and redundancies in your tech stack. This clarity enables smarter tech consolidation decisions that save money and simplify your digital ecosystem.
4. Tracks technology usage patterns
Shelfware is paid-for technology sitting unused, and it drains IT budgets. Procurement teams monitor adoption and usage to identify underutilized assets. One survey shows that 28% of respondents cited tools being too difficult to use as a reason to consider it shelfware. Low usage patterns can clue you in on where users need help.
With Whatfix, you can create, launch, segment, and test in-app experiences like product tours, interactive walkthroughs, task lists, tooltips, pop-ups, self-help centers, and field validations to assist users and guide them through every aspect of an application and its contextual tasks and workflows. Guidance Analytics provides insights into how end-users engage and use this content to understand who is (and isn’t) correcting using application and process governance.
Over time, insights on usage prevent automatic software renewals for businesses that aren’t using them. This can help redirect the budget toward genuinely valuable technology and software investments.
5. Shapes future technology architecture
Procurement decisions made today impact every day that follows. Strategic procurement teams consider how each purchase fits into long-term architecture plans. That way, technical debt doesn’t get out of control.
This is critical because technical debt isn’t something organizations can’t ignore. For example, one large North American bank learned that its more than 1,000 systems and applications together generated over $2 billion in tech-debt costs.
6. Reduces costs through strategic planning
When departments buy individually, companies miss bundling and negotiation opportunities. Strategic software procurement consolidates purchasing power and tracks renewal timelines. This makes technology spending into controlled investments with predictable costs and measurable returns.
7. Strengthens security and compliance
Every new technology introduces potential security vulnerabilities and compliance challenges. Procurement teams make security and legal reviews part of their purchasing workflows. This helps to prevent impulsive technology adoption that could expose sensitive data or violate industry regulations.
8. Improves vendor relationships
Strategic technology procurement isn’t just about transactions. Structured engagement creates clear communication channels and escalation paths when problems arise. Vendor management doesn’t require reactive firefighting. Instead, strategic collaboration leads to better results for all parties.
Key Steps in the IT Procurement Process
Now you know why it matters, but how does the software procurement process actually work? Follow these steps
1. Nail down actual needs
Stakeholders need to understand their must-haves and nice-to-haves before shopping for solutions. Document concrete problems the technology could solve. Ask questions like “What happens if we don’t buy anything?” and “How will we measure success six months after implementation?” These answers will help create selection criteria that count.
2. Set budget boundaries
In 60% of cases, the cloud cost associated with digital exceeds the company’s budget significantly. You have to put a price tag on solving the problem. Calculate visible costs like licenses and more “hidden” expenses like training and maintenance. This approach prevents scope creep and helps you evaluate options early in the process.
3. Scout the right vendors
Cut through the noise and marketing hype. Knowing about a solution is just one piece of the IT procurement puzzle. You also need to do your due diligence to choose the right vendor. To do this, you can:
- Talk to actual users of shortlisted platforms
- Check community or support forums where customers communicate
- Look through the resources that vendors offer
You want to get a sense of which vendors will support your organization. That will help you get as much as possible out of your technology investments.
4. Create meaningful RFPs
A request for proposal (RFP) is a business document that announces a project, describes it, and solicits bids from qualified contractors to complete it. A good RFP will set the foundation for meaningful technology investments.
Come up with specific questions and scenarios for potential vendors. Set clear evaluation criteria upfront and share them with vendors to focus their responses. For example, you may need to know about specific integrations with other tools in your stack. Centering conversations around your unique needs makes spotting the differences between solutions easier.
5. Scrutinize contract terms
Make sure you understand the fine print before you invest in a solution. For example, termination clauses might require notice periods extending your commitment by months. Smart technology procurement teams negotiate specific performance benchmarks and flag any issues that may not work for their organization.
6. Build productive vendor partnerships
The strongest vendor relationships are more than buying and selling. Start by connecting with multiple people at your vendor’s organization instead of depending on just one account manager.
Create clear escalation paths so everyone knows who to call when issues arise. When appropriate, share your company’s plans with technology partners. This openness benefits everyone: vendors get insights to improve their products, and your organization gets better support.
Common Obstacles IT Owners Face When Procuring New Software
What are the pitfalls that come with technology procurement? Look out for these obstacles and mistakes.
1. Vague requirements syndrome
Fuzzy requirements lead to bloated solutions stuffed with features nobody uses. Companies will pay for powerful features that gather digital dust and problems still leave employees stuck. While businesses use an average of over 300 SaaS products, 53% of SaaS licenses remain unused.
That’s why it’s so important for teams to identify exactly which workflows need improvement. They should be able to explain which metrics will show success and which capabilities matter most for their work.
2. Vendor management chaos
When no one manages vendor relationships properly, confusion takes over. Technical teams sign contracts without legal review, and department heads may make verbal promises that never appear in agreements. Companies find their vendor relationships quickly deteriorating into unproductive blame games in these situations. Organizations should invest in a SaaS management tool to help centralize all software contracts and vendor relationships into one dashboard.
3. Rogue purchasing
Each small purchase seems harmless until security gaps appear and duplicate spending balloons. For example, you could waste thousands of dollars if each department uses different project management tools with overlapping capabilities.
This problem is more prevalent than most organizations realize. According to research from Zylo, it now accounts for 3.8% of SaaS spend and 33.6% of apps, an 11.1% increase in spending. Clear software procurement channels stop this fragmentation in its tracks.
4. Approval purgatory
Lengthy approval chains create procurement paralysis. When purchasing drags on for months, requirements shift and business cases become outdated. Use tiered approval frameworks based on strategic importance and investment level. Clear timelines prevent your purchases from becoming irrelevant.
5. Implementation resistance
Employees are likely to cling to familiar workflows and express resistance to change. Successful IT procurement includes software implementation and adoption planning, too. Include training strategies and success metrics in your procurement decisions to prevent wasting investment on tools nobody uses.
When rolling out new software, resistance can slow progress. With Whatfix Mirror, employees experience a seamless transition through interactive, hands-on training directly within the application. This practical approach accelerates onboarding and builds confidence, making change feel natural rather than disruptive.
6. Technology acceleration
Technology is always changing, and long contracts can lock you into outdated approaches to solving a problem. Build exit ramps and technology refresh options into your contracts. These flexibility clauses help you adapt to accelerating change without financial risk.
Best Practices and Smart Strategies for Successful IT Procurement
Want to set your organization up for success with technology procurement? Use these best practices to get more from the process and your software.
1. Link every purchase to business impact
Don’t buy technology for technology’s sake. Have requestors complete business impact statements that explain the outcomes they expect. Sales software may directly affect revenue, and a new project management tool could increase productivity. Make these connections before you lock in with a vendor.
2. Write everything down
Create simple documentation for your technology procurement processes. Write down who can approve what, how selections should be made, and what criteria matter most. Using templates makes the whole process smoother and prevents disputes later. When people change roles, your documentation helps maintain consistency, too.
3. Pull stakeholders in early
Nothing derails a project faster than security concerns that surface after contracts are signed or line items that weren’t accounted for. Don’t surprise people with new technology decisions. Involve finance, IT, legal, and end users from the beginning. You’ll catch potential problems early when they’re still easy to fix.
4. Demand room to grow
The solution that fits perfectly today may not be the right fit tomorrow. Think about where your business will be in three years, not just next quarter. For example, maybe you believe you’ll increase your headcount by 25% in the next five years. Ask vendors about scaling options and what happens if you need more users or features later. Try to negotiate flexible licensing that grows with you. This prevents tough renegotiations when your needs change.
5. Budget for adoption, not just acquisition
Set aside a budget for training and implementation. New tech that nobody uses is money wasted. For every dollar spent on software, consider additional spending on adoption activities, like expert-led sessions or knowledge base development. This gets you to positive ROI faster by reducing the learning curve that comes with change.
6. Audit ruthlessly
Software subscriptions have a way of piling up. Schedule regular reviews of what’s being used and not part of workflows. Look at actual usage data, not just what people say they use. Set clear thresholds for “underutilized” software and have a process for sunsetting tools that don’t meet these thresholds. This frees up your budget for more valuable investments.
Whatfix Product Analytics empowers application owners and product managers with a no-code event-tracking solution to analyze user behavior on internal software. This makes it easier to understand users’ paths while navigating through an application, allowing you to optimize the parts of the user experience that matter most.
7. Score vendors consistently
Create a simple scorecard that aligns with your priorities. For your team, maybe support matters more than fancy features. Go beyond the initial price tag to total costs over time. Include licenses, support fees, training needs, and internal resources.
Here’s an example of what that may look like:
Aligning IT Procurement with Governance & Compliance
How do you manage software procurement and stay in compliance? Here’s how you can make it all work.
1. Importance of compliance
Regulations impact your tech choices. Healthcare companies have to follow HIPAA rules for patient data, and financial firms have SOX requirements for documentation. Build simple compliance checkpoints into your technology procurement process. Take a proactive approach and look for vendors who know your compliance needs.
With Whatfix Mirror, you can quickly create interactive, replica versions of any web application to provide end-users with a sandbox environment for hands-on software training or user testing. This reduces the risk of costly errors and compliance issues.
2. Risk assessment and mitigation
Vendor claims require verification. Ask for proof of security practices like SOC 2 reports. Check how they handle your data and who has access to it. Get specific in your contracts about what happens if things go wrong. This turns marketing promises into actual commitments with consequences.
3. Building a governance framework
Set up simple guidelines showing who can buy what. Maybe managers can approve software up to $1,000, but anything over $10,000 needs executive sign-off. Write your rules in everyday language that makes sense to everyone. When rules are easy to follow, people actually follow them instead of finding workarounds.
Software Clicks Better with Whatfix
Strategic IT procurement helps businesses eliminate wasteful spending and gain a competitive advantage. Organizations need structured processes to choose the right software and secure important information.
From there, it’s possible to align people, processes, and technology to maximize the value of software investments. Whatfix supports this with:
- Whatfix Mirror: Accelerates adoption of newly procured software by enabling hands-on, interactive training. This reduces implementation time and ensures employees quickly master new systems, preventing expensive shelfware.
- Productive Analytics: Provides real-time visibility into software usage patterns, helping IT procurement teams identify shelfware and make data-driven renewal decisions based on actual value delivered.
- Whatfix DAP: Supports users directly within applications through step-by-step guidance, reducing training costs and increasing adoption rates for new technology investments.
Using Whatfix’s complete digital adoption platform, organizations can drive measurable improvements in IT procurement, boost technology ROI, and convert software investments into actual business value.
Discover how aligning people, processes, and technology with Whatfix can turn your digital transformation journey into a competitive advantage. Get a demo today.
