How a Centralized Strategy Can Cut Your Procurement Costs
Reading Time: 12 minutes
Procurement type: Centralized Procurement
Number of Destinations: 3
Client type: End-user
A Global Solution for Streamlining Your Procurement Process
Centralized tech procurement refers to the strategy of procuring from a trusted vendor/reseller/distributor in a central location with the need to deploy the gear across borders. In comparison, a decentralized approach is where separate offices procure their own gear from in-market vendors – no need for cross-border deployment.
One of our clients was in this exact situation. They needed to outfit both their headquarters and several foreign offices – all whilst maintaining a strict budget and keeping in-line to brand requirements.
By reassessing their purchasing strategy and partnering with TecEx, they were able to not only cut costs but also ensure that the gear was configured correctly as per their internal policies and procedures.
In-Market Versus Central Purchases
Outfitting global offices can be complex in itself. You are subject to budgets, equipment specifications, and internal processes. Having to then think about the logistics of the job can be overwhelming, putting you in a position where cross-border deployment feels completely out of your wheelhouse. The go-to strategy would often be purchasing IT gear for each office in each of the foreign countries.
In this particular scenario, our client had to outfit eight offices – five locally in the United States and three abroad.
At first, the decision was taken to procure within the US from their trusted vendor for the five local sites, while the foreign offices would procure their goods in-market – a decentralized model of procurement. Once looking at the actual scope of the project, the client realized the extent of the complexities involved.
Typical features of this deal:
- Various soft inefficiencies
- Compounding complex transactions
- Increased risk of non-compliances with internal requirements
In decentralized deals, the client is subject to different currencies, price negotiations, and product sourcing in each of the countries. It becomes a more complex project management exercise – they will be working with several global VARs – each with a different process, language, time zone, price lists, stock availability, and lead times.
While the above soft efficiencies may be enough to put someone off, two of the three sites had varying procurement issues. One site had stocking issues with the particular brand – this meant that the client would have to break company policy. The second site’s quote was triple the price the company paid locally and would sink their budget.
Making the Best Decision
The best route to streamline the entire process is to make use of a centralized purchasing model. Not only is the actual global IT budget based centrally, but some of the other benefits include:
- Simplicity: The client can work with their trusted VAR – dealing in one currency, price list, language, and time zone.
- Speed: If sufficient stock exists in the US, all sites can be fulfilled quickly versus waiting for in-country supply to catch up.
- Staging and consistency: The in-house engineering team can configure and test the product prior to shipping, allowing for a seamless “plug and play” installation overseas and ensuring better global build consistency.
The next big question is, how to get the gear to each of the three offices across borders?
Buy Local, Ship Global
This is where an Importer of Record (IOR) steps in. We make the deployment process not only possible but efficient. For this client, we made use of our warehousing options to stage and consolidate goods prior to leaving the US. From there, the goods were deployed globally to the three foreign destinations – each with their accompanying customs regulations and requirements.
TecEx supports centrally procured models by being a global specialist in importing IT hardware into over 200 destinations around the world. Our goal is simple – to simplify the process of procuring any form of IT hardware on a global scale, providing a reliable, globally consistent, highly transparent, and, above all, customer-obsessed service.
Looking for a
similar solution?
Contact TecEx to help with shopfitting, design, and architectural projects in foreign markets. Our global presence, project management, import compliance, and logistics network allow us to offer a comprehensive end-to-end solution for clients throughout the supply chain.
Looking for a
similar solution?
Contact TecEx to help with shopfitting, design, and architectural projects in foreign markets. Our global presence, project management, import compliance, and logistics network allow us to offer a comprehensive end-to-end solution for clients throughout the supply chain.