State agencies, public higher education institutions, and other government entities purchase billions of dollars of IT services using a centralized procurement function. Like any solution, there are essential advantages while the disadvantages are few. Key to those are changes to the single entity buying for many organizations.
Questions arise if state agencies can provide the best value and meet the standard objectives, which satisfy the needs of the single entity, and yield the best return on investment for the taxpayers. Saving money and reducing costs is a mighty task for a centralized procurement model.
Critical to the Centralized Model
The adequately constructed responsibility of the CIO is a fundamental component as is their expertise in IT and IT management, to make appropriate purchasing decisions.
Another constraint might be the balance between a centralized purchasing agency and their client’s department controlling the budget. Both the single entity and the centralized agent need to cooperate with each other and have equal power in decision-making. An absolute dominance by one or the other side can result in a waste of funds.
Having a consolidated IT department can be a benefit, as it permits better decision-making and avoids duplication. Strategic collaboration in a state government’s procurement process builds indispensable relationships with vendors who can reduce their costs when selling to a central organization.
Improving the Organizations’ Investment
The volumes achieved through consolidation of an organization’s requirements generates better pricing, which then amounts to saving. The procurement department can deliver a good, solid business strategy; provide unique processes, recruit, and retain top-notch talent that enables the state procurement agencies to make informed decisions. According to several experts, centralized purchasing saves billions of dollars annually for states.
Retarus, a global leader in enterprise cloud messaging, is a NASPO ValuePoint partner that allows U.S. states, territories, and authorized public entities to access and procure Retarus’ services expeditiously. With a portfolio of Enterprise Fax, SMS and Email Security, Retarus helps organizations reduce complex IT infrastructure, lower costs, and provide a higher standard of service for internal and external communications. For more information about Retarus’ Master Service Agreements, email email@example.com.