• IT departments typically approach sourcing a new vendor or negotiating a contract renewal as an ad hoc event.
• There is a lack of understanding on how category planning governance can save money.
• IT vendor “go to market” or sourcing activities are typically not planned and are a reaction to internal client demands or vendor contract expiration.

Our Advice

Critical Insight

• Lack of knowledge of the benefits and features of category management, including the perception that the sourcing process takes too long, are two of the most common challenges that prevent IT from category planning.
• Other challenges include the traditional view of contract renegotiation and vendor acquisition as a transactional event vs. an ongoing strategic process.
• Finally, allocating resources and time to collect the data, vendor information, and marketing analysis prevents us from creating category plans.

Impact and Result

• An IT category plan establishes a consistent and proactive methodology or process to sourcing activities such as request for information (RFI), request for proposals, (RFPs), and direct negotiations with a specific vendor or“targeted negotiations” such as renewals.
• The goal of an IT category plan is to leverage a strategic approach to vendor selection while identify cost optimizing opportunities that are aligned with IT strategy and budget objectives.