IT Contractors Category Procurement Intelligence Report

Business practices within IT Contractors market are heavily influenced by changing trends across the category as well as within the broader IT Management and Change market. Rise in the cost of certain essential assets and supplies required to deliver IT Contractors is making a significant addition to the supplier's overall expenditure. This could have an inflationary impact on buyer's procurement expenditure in the IT Contractors market.

The cut-throat competition in the category is compelling suppliers to go aggressive on their pricing structure and increase their spend on sales and marketing activities. As a result, most suppliers are feeling a pressure on their margins and trying to offer higher margin value added services to have a better control on their profitability.

The supply market has undergone several structural changes including introduction of several new vendors every year, M&As and vertical integration efforts of suppliers. This has resulted in some issues such as erosion of previously established supplier relationships but has also opened new opportunities to onboard new suppliers that offer a solution with better fitment or a wider range of offerings in .

As a result, category managers need to closely monitor the IT Contractors procurement trends and identify changes required in their procurement environment for the category.

IT Contractors procurement best practices are moving towards a level of sophistication which is typically seen in traditional procurement categories. Category managers now have an attractive opportunity to adapt the best practices seen within this category as well as those being leveraged in other non-related categories. This report summarizes the best practices picked from across multiple categories that could work well for category managers involved with IT Contractors procurement strategy.

For example, Needs of buyers can vary depending on the industry where buyers operate. For instance, buyers from the financial services industry give high importance to regulatory compliance and data security, whereas buyers from the e-commerce industry prioritize high throughput, low response time, and high scalability. Hence, service providers with a strong knowledge of the security, compliance, and governance needs of buyers' industries and a proven track record of performance with respect to these aspects should be prioritized.

Category managers must explore opportunities to integrate planning and management activities using analytics to gain better control over category spend. This will also allow them to consolidate supply base easily as well as segment service providers depending on requirements and spend on each service provider.

Adequate RFP response time should be built in for prospective suppliers to enable them understand the scope and usage patterns properly.

IT Contractors procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for IT Contractors procurement. Some examples include: