The importance of Software Procurement to your company’s

Value ChainBy Qahir Makhani

Introduction

• My name is Qahir Makhani and I am a young professional who has worked in both the IT Software and FMCG industries, in both Sales and Supply Chain Management respectively.

• In addition to the experience, I hold a Bachelor’s Degree in Global Supply Chain Management and Marketing, a course that was heavily focused on Michael Porter’s Value Chain.

• The combination of my educational background and work experience has led to me developing strong interests in the integration of demand and supply, along with consumer driven value chains.• This in turn has led to me wanting to pursue a career in the field of IT

Procurement in order to apply the knowledge gained from my experiences in order to add further value to any company’s organisation

Why Qahir?

• I am someone who is ambitious, confident and has the ability to work autonomously or as part of a team.• I am a quick learner with a collaborative outlook and an

intellectual curiosity to learn about how my actions impact other business areas and vice versa. I also have a proven ability to work cross-functionally in a multicultural environment.• Furthermore, I am a quick learner who is able to balance

conflicting priorities and multiple projects simultaneously while still being able to perform

The Value Chain

The “Value Chain” is a concept devised by Harvard Professor Michael Porter that details the primary and supporting activities within an organisation that need to work in sync with each other in order to create value for an organisation, it’s shareholders and its customers.

Information

Information

Choices, choices

• However, due to the fact that there are several vendors for almost anything, companies now have the choice to :• Consolidate their supply base• Buy from multiple vendors• Buy a product from one vendor that contains Software from other

vendors, therefore allowing you to have the benefit of quality software from multiple sources

An example

• Imagine that it is a hot day and you are really wanting to eat a Kinder Bueno bar, but also want to have a milkshake too. You’re also on a diet while you only have £4. Other factors include:• £3 for Chocolate Milkshake• £2 for Kinder Bueno

• However, the shop also has the option of a Kinder Bueno Milkshake for £4, which allows you to have:• The Kinder Bueno and the Milkshake• Within your budget• And fitting the constraints of your diet

The missing link

Consumer Demand Information

Consumer Dem

and

Questions to ask prior to making a decision?• As we all know, IT Procurement, especially that of Software is now a

more strategic decision than it has ever been before. So here are a few questions/factors needing to be considered prior to making a decision or even putting together an RFQ:• Which company provides the hardware being used?• Do the same company provide all of the Software due to incompatibility with

other vendors?• How many vendors am I buying from?• Which ERP,MRP and CRM systems am I using?• Is any of my Software open-source/compatible with any Hardware?• Does my current IT Estate provide me with visibility across the value chain?• Am I paying for the same product twice?• Am I looking to reduce spend on Hardware/reduce the level of Hardware in my

IT estate?• How long will it take to make changes if needed?

AN IT Value Chain based on Porter’s Concept

A one-stop shop

Option 1

Option 2- a bit of everything

But please don’t choose option 3

Because like the milkshake example, you get both without paying for both separately!!!

Due to this

• SAP Hana runs on HP- therefore providing the best Application Solution Testing Product as part of a comprehensive Business Suite.

Other Considerations

• When selecting a Software Vendor(s), you must ensure that the Software is Open-Source or contains Open-source Software in order to optimise the value of your IT Estate. Reasons for this include:• No replacement costs• The possibility of moving data to the cloud• Being able to use Virtual Servers• The chance to reduce your Hardware Estate and therefore Carbon

Footprint along with freeing physical space.