A guide to indirect spend #2: IT consumables

19 March 2012

Last week we began our series of blogs looking at indirect spend categories with office supplies. The category up for review this week is IT consumables.

You might wonder why I am focusing on this category this week, as many companies consider it to be the same category as office supplies. But I believe the pursuit of best value for any big spender on IT consumables can be best achieved when it is treated as a category on its own. This is because the IT consumables market has a ‘personality’ of its own that can only really be leveraged when sourcing is in isolation to general office supplies. Constant price fluctuations on these global technology commodities driven by demand, manufacturing capacity and input prices makes this a complex category, requiring close attention. Faced with a myriad of choices and options, sourcing teams must take special care to distil down to the right product shortlist and suppliers. The use of e-sourcing and e-auctions can simplify this process of supplier and contract choice across many standard variables that must be properly explored, for example core and non-core item splits and single or multiple supplier routes across a wide range of products. Top Trade - IT Consumables Printer consumables alone offer the options of OEM, compatible or remanufactured products. And the choice of ink or toner needs to be considered alongside hardware options to accurately ascertain and compare total price per page offered from different solutions. Most organisations have significant scope for standardising their printer hardware and this is also one way of reducing the number of print consumable variants and consolidating budgets. If evaluating remanufactured products, the inclusion of the recycling value of spent cartridges should be factored into the sourcing process too. In other sub-categories - such as memory devices and storage media - standardising to a limited range of products, tendering bulk orders, ensuring demand management and considering grouping linked products are all valid options. With the potential for price fluctuation in IT consumables sourcing teams must also keep a close eye on market forces throughout. Separating IT consumables as a standalone category can be a wise choice for large consumers. You really need to play this market individually based on its scale of choices, fluctuations in demand and pricing, and also consider your organisation’s carbon agenda as part of the approach. ☛ Temeena Hussain is a sourcing consultant at Wax Digital. Next week: IT hardware
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