Comprehensive Analysis of IT Procurement Processes and Contracts

This report provides a detailed analysis of IT procurement, covering key aspects such as project procurement management processes, the components of an enforceable contract, essential elements of an offer, and the difference between independent and dependent demand. It also examines the h...Read More

Running head: IT PROCUREMENT
IT Procurement
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1IT PROCUREMENT
Table of Contents
Introduction......................................................................................................................................3
Processes of project procurement management...............................................................................3
Components of enforceable contract...............................................................................................5
Essential components of an offer.....................................................................................................6
Difference between independent and dependent demand...............................................................7
Some of the hidden cost of outsourcing..........................................................................................7
The process of relating TQM to IT procurement.............................................................................9
Psychological factors that may affect bargaining............................................................................9
Psychological factors affecting bargaining between sustainability IT procurement practices
compared to pure economic practices............................................................................................10
The key procurement consideration during evaluation of cloud SaaS offerings...........................11
The process of including within any services SOW......................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

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Introduction
Over the past years, value of procurement becomes increasingly apparent. Present
research has indicated that at current days, more people recognize that the efficiency of IT
procurement. Several types of trade transactions are important to it. The procurement role is
necessary to any business that helps to buy anything. Business buys products or services from
several vendors. In addition, procurement professionals can handle detailed procedure of
procuring the purchases at very optimal price. In knowledge-based economy, creation of value,
technical as well as scientific advancement are important. In the United States, jobs in service
sector have increased from the 50% of total jobs in the US economy. Several organizations in the
service sector offers transportation, financial as well as communication services. It has
encountered the changes in regulatory environment along with technological structure. The
changes have opened up new global markets and forced service industries in order to determine
the ways that it is required to remain competitive. Emerging technologies as well as enhanced
communications have altered tolerance of most customers. The business purchase products from
several vendors. Procurement professionals can handle the details of the process of procuring.
The element procurement management assists meeting expectations of partners. The study deals
with the procedures of project procurement management, elements of enforceable contract,
necessary elements of an offer and difference between independent and dependent demand. In
addition, process of relating TQM to IT procurement and the key procurement consideration
during evaluation of cloud SaaS is discussed in the current study.

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Processes of project procurement management
The procurement process is generally designed in order to gain a seller at reasonable
price. The procedure engages waiting time for sellers looking the requirements of the project as
well as responding. Hence, the process can take from a month to three months for the type of
procurement (Jonathan et al. 2017). The project manager requires being involved in the whole
procedure of procurement management and requires planning for procurements. The sequential
procurement management procedures are as followed.
 Plan procurements
 Conduct procurements
 Close procurements
 Administer procurement
The capabilities as well as knowledge bases are different as well as fast changing that the
organizations increasingly opt expanding the opportunity. The simplest form an acceptance of
contract offer is achieved verbally with the process of handshake with affirmative nod of head.
The knowledge as well as experience embodied in the human capital is the major
resources for the organizations. The inputs for procurement management process are as followed. Enterprise environmental factors: It engages culture of the organization as well
as existing systems that is made use of it.
 Organizational process assets: Procurement processes, standard contracts as well
as lessons learned from the project along with the list of prequalified seller, which
are considered as some organizational procedure assets.

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 Procurement manager assigned: Whether the amount of process is high, a
procurement manager requires to be assigned for the procedure.
 The Scope Baseline (WBS, WBS dictionary and Project Scope Statement ): It
assists in making the project members comprehend the requirement of
procurement.
 Risk register: A comprehension of risks uncovered to the date termed as risk
register.
 Any procurement in the place for the project: The project manager needs to
manage the interface between several sellers as well as various procurements on
the project.
 Detection of the resources not available within performing the enterprise: One
of the important aspects needs to be determined whether the services require to be
procured.
 The project schedule: Schedule of the project assists determining when the
procurements are required.
 Initial cost estimation for work to be generated: Initial cost estimation is needed
for the works that is procured for comparing between the prices of seller.
 Cost baseline: Understanding the cost baseline assists to ensure the procurement
fits within the cost of baseline.
Components of enforceable contract
The components of enforceable contract are as followed.

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Offer: The component is considered as promise as well as demand of some parts. In the
real estate, it is helpful for buying a home or other part of real estate.
Acceptance: The component is considered as acceptance of terms of offering the
presented process. It could be helpful for seller accepting offer to buy a part of real estate.
Whether the party responds to the offer that changes specific conditions. The party is accepting
the offer and presenting counteroffer.
Consideration: Naoum and Egbu (2015) stated that the component of contracts is
presented in the process of exchange for the contract. Considering the real estate consideration
could be helpful for monitoring compensation given in the process of exchanging a part of the
real estate.
Capacity: The component of a contract needs that a party is entering into the contract
that is able entering the contract. In addition, a party having any capacity could be intoxicated
and the time is mentally incompetent.
Essential components of an offer
The necessary elements of an offer are as followed.
Communicated: The person making the offer needs to communicate offering a person
and select accepting or rejecting the offer. In addition, it is a serious issue for analysis. The
offeror is free for communicating the offer in any ways.
Committed: It is important to make commitment of the analysis in the process of
communication. An indentation is bound arising with the help of conducting the course like
explicitly starting with the final offer.

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Definite terms: All the offers need to be definite as well as terms. The necessary term of
deal like price, way of acceptance as well as timing needs to be stated.
Difference between independent and dependent demand
Usually the higher price of products, the units of products generated as well as consumed.
The precise number generated as well as consumed at the prices that happens on the integration
of demand as well as supply of the products. The differences between independent as well as
dependent demands are as followed.
Independent demand: Independent demand is influenced through economic factors
external to the demands-supply model like general consumer sentiment as well as available
disposal of the customers. On the other hand, businesses are required to predict the number of
products with independent demand required in order to state customer making easier in the
business (Woldesenbet and Worthington 2018). It is required to calculate the demand for the
products that are helpful to make the process as there are less number of factors for
consideration.
Dependent demand: Dependent demands are the demand for products influenced through
the demand for some products. In addition, demand for the products can move in tandem as well
as in opposite direction. The categories are counted as products with the help of dependent
demand. Thus, generating estimates are based on products with the dependent demands. It is
more difficult as the business needs to take into account regarding the demands for consumers
that are likely to have impact on the products.

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Some of the hidden cost of outsourcing
There are several sources of outsourcing includes cost areas offering scopes for
enhancement.
Cost of outdated strategy for outsourcing: Minimization of cost scope engages a
rationalization as well as reevaluation of present portfolio of present outsourcing portfolio in the
revenue topology. An effective strategy is important for reviewing the outsourcing content as
well as commitment. In addition, it is required to respond the process for emerging market
scopes in the countries (Igarashi et al. 2015). For an instance, designing as well as manufacturing
for the products would be challenging in order to serve fast developing market.
Cost of management as well as coordination of contractors: People are generally
shocked during calculation of total annualized cost of managing the process. It consists of the
cost of time as well as travel expenses during visiting suppliers. In order to keep the costs under
taking control, collection and analysis of the process, the cost of activities can add up to several
millions of dollars.
Cost of subpar inventory performance: The outsourcing manufacturing can minimize
flexibility in designing and ability in order to respond for schedule changes. It can generally
translate more inventories in the process. In addition, it is helpful to ensure that selling of the
products in higher margin. On the other hand, depending on the product as well as back orders
can be helpful to push customers, which are helpful in the process.
Cost of unplanned logistics activities as well as premium freight: Outsourcing can
minimize flexibility as well as makes the process difficult to be responsive according to the

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changing demands of customers. Organizations can prevent mistakes and resulting to generate
better planning as well as control over the deliveries.
The process of relating TQM to IT procurement
The role of Total Quality Management deals with the fact that the processing of the
functionality deals with the processing of the Information Technology ensures the fact that the
quality of the entire project stays efficient. The processing of the Total Quality Management
officers is to have a hold of the checking of the quality of the project. This will take into
consideration that the data of the organizations of the Information Technology are to be handled
with efficiency (Butt et al. 2015). This will take into consideration the methodology of
maintaining the innovative quality of the projects that are being performed in the course of the
processing the new projects with innovation molded in the projection of the data management of
the innovation that are intruded in the project management of the information technology
organization.
This ensures the fact that the processing of the data is the most important aspect of the
data management in the Information Technology will enable the fact that the efficiency of the
management is termed for the processing of the Information Technology. This technology takes
into account the processing of the data base management as the information Technology depends
on the data base of the organization hence the transcription of the data base management ensures
the progression of the application of the role of Total Quality Management in terms of the
Information Technology

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Psychological factors that may affect bargaining
The psychological factors that affect the processing of the bargaining are as follows: -
• The demand of the product: the demand of the product acts as the main
component for the psychological deployment of the vendors. In case the demand of the product
is high, the vendor of the product will be having high psychological strength and the power of
the processing of the bargaining intensity decreases
• The processing of the bargaining ensures the fact that the data that with the
procession of the strength of the union also dictates the psychology of the bargaining if the
project
Witjes and Lozano (2016) mentioned that the bargaining procession deals with the fact
that the availability of the product in the market. In case the product is highly available in the
market, the bargaining of the product gets more difficult and the mount that is bargained is high,
in case the availability of the product is very low, the bargaining of the product has to be low.
The bargaining of the product and the availability of the products are inversely proportional to
each other. This fact ensures that the availability of the product will be dependent on the
processing of the bargaining if the product.
Psychological factors affecting bargaining between sustainability IT procurement practices
compared to pure economic practices
The problem between the procurement of the IT sustainability with the inference of the
economic prosecution includes the fact that the entire business of IT management will include
the processing of the entire business. The terminology ensures the fact that the probation of the
terminology of the entire business is dependent in the processing of the economic stature of the

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organization. This fact ensures that the business organization that has the terminology of the
economic problems maintains the processing of the data in the business organization that deals
with the projection of information technology. The data base management of the Information
Technology depends on the fact that the processions of the data are maintained with proper
efficiency. In case the economic stature of the organization is in a declining stage, the processing
of the project will ensure the lessening of the terminologies that ensure the robustness f the data
base maintenance of the project (da Rosa and de Almeida 2018). In case of the decrease in the
lack of the robustness in the processing of the project the database gets vulnerable in nature and
this vulnerability deals the fact that the data procuring will be done by the intruders who will not
be processing with the job.
The key procurement consideration during evaluation of cloud SaaS offerings
Software as a Service is the unique methodology that is used for the processing if the
model distribution of the software that includes the facility regarding the processing of the data
management if the software application. This fact takes into account the fact that the data
management of the application stays moderate in nature and the data transcription endures the
processing of the networking application of the project. In case of using the Software as a
Service the process is termed as the data center of the processing software plays a major role in
the functioning of the process. The customer access is performed with the terminology of the
standard web browser. This fact takes into acknowledgement of the fact that the application of
the database is directly related to the processing of the database. This ensures the fact that the
data related to the Software as a Service deals with the processing of the products.

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The process of including within any services SOW
The procession will include the defining of the termination of the process that includes
the definition of the project terminologies that are required in the processing of the project. This
incurs the fact that the processing of the data will include the fact that the data that are to be
submitted are defined during the initiation of the project. After defining the terminologies that
are incurred in the project, the background of the project will also be discussed and the
procession of the data will ensure the fact that the data regarding the background of the project is
defined as the processing of the project is defined in this stage. After completion of the
discussion of the background of the project the purpose of the project is then defined and after
that the entire body of the project which implies to discussion portion gets processed.
Conclusion
From the above discussion, it concludes that it is important for an organization focusing
on IT procurement in order to gain competitive advantages. The major consideration is that the
service is purchased in the subscription of the processing subscription of the entire database. The
requirement of the hardware of the component deals with the processing of the software. IT
procurement helps to gain better chance to encounter the business goals. In addition, it assists to
reduce cost in business process. There are lower supply chain risks and advanced process
management can be achieved with the help of IT procurement.

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References
Butt, A.A., Toller, S. and Birgisson, B., 2015. Life cycle assessment for the green procurement
of roads: a way forward. Journal of Cleaner Production, 90, pp.163-170.
da Rosa, I. and de Almeida, J., 2018. Digital transformation in the public sector: Electronic
procurement in Portugal. In Digital Multimedia: Concepts, Methodologies, Tools, and
Applications(pp. 497-518). IGI Global.
Dillon, S. and Vossen, G., 2015. SaaS cloud computing in small and medium enterprises: A
comparison between Germany and New Zealand. International Journal of Information
Technology, Communications and Convergence, 3(2), pp.87-104.
Flint, D., 2017. Storms Ahead for Cloud Service Providers. Business Law Review, 38(3), pp.125-
126.
Igarashi, M., de Boer, L. and Michelsen, O., 2015. Investigating the anatomy of supplier
selection in green public procurement. Journal of Cleaner Production, 108, pp.442-450.
Johnson, T., 2017. Measuring the Creative Plea Bargin. Indiana Law Journal, 92(3), p.2.
Jonathan, K., Napitupulu, T.A. and Sari, R., 2017, November. IT good governance: A case of the
role of e-Procurement in Indonesia. In Information Management and Technology (ICIMTech),
2017 International Conference on (pp. 328-333). IEEE.
McNider, R.T. and Lee, P., 2015. Statement of Work.
Meurer, M.J., 2016. Bargaining Failure and to Bargin. BUL Rev., 96, p.655.

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Naoum, S. and Egbu, C., 2015. Critical review of procurement method research in construction
journals. Procedia Economics and Finance, 21, pp.6-13.
Vanyek, S. and Block, R., 2015. 2015-2016 EBD# 12.24-Statement of Work for IT Eternal
Review.
Witjes, S. and Lozano, R., 2016. Towards a more Circular Economy: Proposing a framework
linking sustainable public procurement and sustainable business models. Resources,
Conservation and Recycling, 112, pp.37-44.
Woldesenbet, K. and Worthington, I., 2018. Public procurement and small businesses: estranged
or engaged?. Journal of Small Business Management.