IT Procurement Challenges and Recommendations: University Report

This report delves into the challenges of IT procurement within the retail industry. It begins with an analysis of the importance of IT procurement, its role in supporting business strategy, and an overview of organizational structures and purchasing procedures specific to the retail sector. The report also examines crucial legal aspects relevant to the industry. Furthermore, it provides an in-depth analysis of the key challenges faced in IT procurement, offering recommendations for improvement. The research covers various areas including procurement's impact on business strategy, the organizational structure of the retail industry, purchasing procedures, and relevant legal aspects. Ultimately, the report aims to provide a comprehensive understanding of IT procurement challenges and propose effective solutions for the retail sector.

Running head: IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
IT Procurement Challenges and Recommendations
Name of student
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1IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
Abstract
The research paper gives information about the IT Procurement Challenges in the Retail Industry
Sector and provide in-depth analysis of the importance of IT Procurement within the Industry. It
discusses the role that support the Business Strategy. It gives some description about the
Organizational structures of the Retail Industry. It specifies the Procedures of Purchasing from
the Retail Industry. There are some important Legal aspects that has been considered for this
Industry. Therefore, recommending some solutions to overcome the challenges.

2IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
Table of Contents
Introduction..................................................................................................................................................3
Analysis of IT Procurement’s Importance...................................................................................................3
Procurement’s role in supporting Business Strategy...................................................................................4
Organizational structures within the industry sector...................................................................................6
Purchasing Procedures specific to the industry sector.................................................................................7
Legal aspects that are important to the industry sector................................................................................8
In-depth analysis of IT Procurement Challenges.........................................................................................8
Recommendations........................................................................................................................................9
Conclusion...................................................................................................................................................9
References..................................................................................................................................................10

3IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
Introduction
Every Industry faces their own procurement challenges, similarly based on the analysis
done on the IT procurement in the retail industry, this paper will provide qualitative information
about the challenges that the retail industry faces. The in-depth analysis will make understand
about the role of the Procurement that has support the Business Strategy. () The industry contains
some Organizational Structures with specific Purchasing Procedures. The legal aspect is the very
important part in the industry sector, as it provides legal information about the procedure and
policies that the overall industry will have to follow. Finally, the research will have an in-depth
analysis about the Challenges faced through the IT Procurement. It will provide some
recommendation that will be helpful to overcome the challenges.
Analysis of IT Procurement’s Importance
The efficiency of procurement has been recognized with various kind of trade transactions. The
function of procurement works better for those industry who purchase something. If the retailer
company buys goods, services or anything, they make more money with better procurement (Jain
2015). Typically, suppose the grocery retailer buys the products and services from multiple
vendors. The individual who are professional in procurement handle the procuring purchases
details at an optimal price (Scheer and Rubik 2017). As grocery retail is a small business, the
procurement policies and procedures enables them to arrange a long-term goals and objectives of
buying strategy. The manager of the procurement identifies the complete purchase orders,
consider the times of delivery, review and accept the items, receive products and services from
suppliers, and approve the payments of the supplier. For building a successful industry,
procurement management is a key factor. The significant benefits provided by the procurement

4IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
helps both vendors and customers on higher level. Through procurement management both
buyers and suppliers meet their goals (Gruber et al. 2015). It increases the productivity in daily
transactions for the buyer to get items faster and within time. If it increases the service quality
and reduce the delivery errors, it can even achieve savings. Procurement and IT industry has to
work together. If the procurement purchases the IT resources without consulting the IT
department then it would not help the organization. In the similar manner if the IT department
does not understand the procedures and the processes of the procurement properly for the cost
effective purchases, then it will not benefit the company. So when both works together then they
can understand in a more effective manner.
Procurement’s role in supporting Business Strategy
Strategy can be effective in two ways, either performing similar activities in a better way or
performing activities that are different from the competitors. In either of the approach
procurement provide support in a distinct manner. Today, in this competitive industry,
organizations expect from the professional of procurement to develop an options for them to stay
competitive (Johnson, Leenders and McCue 2017). The organization has a procured input
resources that help them to develop a leverage against their competitors. With the competitive
strategy of the organization’s, the procurement actions are consistent. The competitive priorities
of the organizations are reinforcing to design the actions of procurement. The figure below
shows the linkages for procurement strategy and its component.

5IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
Figure 1: Procurement Strategy and its component
Competitive priorities articulated the competitive strategy of an organization’s. An organization
competing on cost and differentiation enhance values perceived by the customers. It can be
quality or speed or flexibility or cost or combination of all the four.
Strategic procurement links the actions and decision-making procurement to the corporate
business strategies. The formation of organizational strategies involve procurement that the top
management has perceived through competitive advantages (Hingley, Angell and Lindgreen
2015). Even in one of the research it has stated that such things often depend on the importance
of strategic procurement added by the total cost of the material percentage and the line of the
product. It also depends on the pace of technology, supply market complexity, gauged by supply
scarcity, and substitution of materials, logistics complexity or cost, entry barriers, and oligopoly
or monopoly conditions.

6IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
Organizational structures within the industry sector
Today Grocery retail industry sector has recovered rapidly as compare to the rest of the economy
earnings and profits. For every retail organization, procurement function is the center of success.
The function is concern with the right material that has selected, in right quantity, from right
source and right price (Witjes and Lozano 2016). This is done for the customer satisfaction and
fulfil the goal of the company. The process of procurement undertaken to replenish and supply
stock within the rental organizations. Which include purchase of planning, quality and quantity
of the purchased items, selection and search of the supplier, financing, value analysis,
purchasing, price negotiations, Disposal and other related function, contract administration of the
supplier, inventory stores and control (Simon, Fischbach and Schoder 2014). Thus, these clear
that the process of procurement is difficult and complex as thousands of products has involve at a
more global scale. Buyers face certain challenges in the level of professionalism. Procurement
management improve their procedures while working with the organizations. The first challenge
that has been analyzed was the Qualified suppliers finding and evaluation. There are so many
option of purchasing. The purchasing decisions cannot be based on price alone. It paramount the
levels of vendor service, application overall suitability, offering a large product, and the delivery
speed. The second challenge is handling invoice variances. While staff resources are spending
manually to review and scrutinize the variance and processing a purchase order of low-dollar for
large number are not that cost-effective (Kurnia et al. 2015). No one has such time to find the
difference between an invoice and an order that has purchased. With the use of invoice matching
variance a certain threshold has match automatically with the invoice. It safe the valuable time of
the Account Payable staff during the process of invoice matching. This is one of the effective
procurement systems. The third challenge is reducing the cost and generating the savings. For

7IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
every business function, the most common challenge is cutting a cost, but more than this
spending money is the more challenging function for the core business (Bronnenberg and
Ellickson 2015). The procurement manager must perform diligence in analyzing the proposals
and vendors, managing entire process of purchasing, and seeking a quotes. The forth challenge is
to eliminate the Un-Managed Spend (Brammer and Walker 2016). When purchasing
classifications are left unmanaged, there is a vast inefficiencies and the opportunity to save
money and time also lose with the increase in the level of services. The fifth challenge is proving
the contribution and relevancy of the industry. Previously procurement was necessary but not a
strategic component of any business operations. The challenge here is to prove that management
of procurement is not just a series of necessary transactions but is an integral part of the
performance in the corporate.
Purchasing Procedures specific to the industry sector
The role of the purchasing department is pivotal for grocery retailer success. For this a clear
procedure, policies and practices were applied to both the international and domestic suppliers. It
has become necessary to inquire the exist of the procurement policies and the capacity of the
grocery retailers to use their benefit (Mackintosh et al. 2016). The research was carried out by
the researchers in order to identify, discover and describe the policies and practices of
procurement that are applicable to the industry sector. Researchers has also determined the
measures to prevent from the buyers’ unethical practices as a result of flawed practices and
policies (Pedersen, Gwozdz and Hvass 2016). A study has been done on ten major grocery
retailers who have resale their commodities for their personal consumption or families. The ten
major retailers are Adro Foods, Stoppa Shoppa, OK Zimbabwe, Food World, Spar, Food Chain,
Nyaningwe, TM Supermarket, Gutsia and Mohammed Mussa that procure products in large

8IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
volumes both internationally and locally (Franco 2017). Thus, have a complex buying process
that require adherence and policy for certain practices. The study consist of purchasing
executives who were mostly under the age of 40 years. The working experience of three of the
manager were less than a year. Two has the degree of qualifications, one had a secondary school
qualification. The formal procurement or buying qualifications were held to only two.
Legal aspects that are important to the industry sector
The laws of the country have abided through small business that the society expects and they
owe to understand the legal responsibilities for all the stakeholders. The legal responsibilities
were imposed on small businesses by all levels of the government. Any business when
established for the first time, the name for that business has to be registered with the Australian
Securities and Investments Commission (ASIC), unless the trading is done by their own personal
name (Johnson, Leenders and McCue 2017). Patterns and trademarks were registered with the
federal government body. The registration of the new name for the business require an
Australian business number (ABN), and a company or partnership requires number for their own
tax file. Later when the business has established in a company, then it has to registered with the
ASIC (Oliveira, Thomas and Espadanal 2014). Once registered they will receive a Registration
Certificate and an Australian company number (ACN) from the ASIC. The acquisition,
development, Parking Regulations and Fire Regulations will affect the location and layout of the
business premises. Financial and Legal responsibilities were imposed on leasing or purchase of
equipment, that have involved in contractual arrangements with equipment suppliers, banks and
other financial institutions (Knoppen and Sáenz 2015). All businesses have Taxation laws that
are required for Business Activity Statement (BAS) on a quarterly basis.

9IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
In-depth analysis of IT Procurement Challenges
After study the organizational structure, purchasing procedure and the legal aspects of the
industry sector, it has been analyzed that every industry faces a unique challenge in their IT
procurement (Parise, Guinan and Kafka 2016). An in-depth study of the multiple case study of
the grocery retailers regarding the buying policies and practices was not peculiar. However,
researchers were convinced about the important insight of the study that has emerge at a
conceptual level. Among the ten grocery retailers three were the local household players in the
business (Dias and Braga Junior 2016). Of the three, one has operated of independent retailers of
grocery as a guild. The seven retailers were the newer players concentrated in Harare and three
retailers have sub branches around Zimbabwe. All the ten retailers were operated using the
format of supermarket. Among them two were departmental store that were spread across the
country. One with two wholesale outlets. The similar patterns were observed in New York.
Recommendations
There are many challenges in the business that can be solved effectively with the tools of
technology. There is no exception for the challenges in IT procurement. In a country the retailers
need to engage a procurement manager well qualified in buying. The researcher gathered data
which reveal that buyers had never attended any courses that aimed at improving the skills of the
buyers. It is recommended to use the management software of procurement that helps the process
of procurement and automate the entire requisition, reduce the un-managed spend, track the
performance of vendor, gain real-time control and visibility, compare the proposals, and strong
delivery of the ROI across the organization. It is also recommended to integrate the ERP solution
that will help the transmission of the organization’s purchasing data instantly to make it available
on operational and financial reports.

10IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
Conclusion
From the above study, it has concluded that efficiency of procurement was recognized through
various kind of trade transactions. The significant benefits provided by the procurement helps
both vendors and customers on higher level. Through procurement management both buyers and
suppliers meet their goals. Buyers able to get items in a faster manner and in time. The process of
procurement is difficult and complex as thousands of products has involve at a more global scale.
In the study it has also been found buyers face certain challenges in the level of professionalism.
Procurement management improve their procedures while working with the organizations.
Researchers has also determined the measures to prevent from the buyers’ unethical practices as
a result of flawed practices and policies. Thus, the legal aspects of the industry sector have been
analyzed that every industry faces a unique challenge in their IT procurement.

11IT PROCUREMENT CHALLENGES AND RECOMMENDATIONS
References
Brammer, S. and Walker, H., 2016. Sustainable procurement, institutional context and top
management commitment: an international public sector study. In Sustainable Value Chain
Management (pp. 67-86). Routledge.
Bronnenberg, B.J. and Ellickson, P.B., 2015. Adolescence and the path to maturity in global
retail. Journal of Economic Perspectives, 29(4), pp.113-34.
Dias, K.T. and Braga Junior, S.S., 2016. The use of reverse logistics for waste management in a
Brazilian grocery retailer. Waste Management & Research, 34(1), pp.22-29.
Franco, M.A., 2017. Circular economy at the micro level: A dynamic view of incumbents’
struggles and challenges in the textile industry. Journal of Cleaner Production, 168, pp.833-845.
Gruber, M., De Leon, N., George, G. and Thompson, P., 2015. Managing by design. Academy of
Management Journal, 58(1), pp.1-7.
Hingley, M., Angell, R. and Lindgreen, A., 2015. The current situation and future
conceptualization of power in industrial markets. Industrial Marketing Management, 48, pp.226-
230.
Jain, R., 2015. Analysis of Urban Customer Purchase Decision Making Parameters in Organized
Retail Sector in India. IJITKM Journal, 9, pp.6-12.
Johnson, P.F., Leenders, M.R. and McCue, C., 2017. A comparison of purchasing’s
organizational roles and responsibilities in the public and private sector. Journal of Public
Procurement, 3(1), pp.57-74.