When I worked with IT decision-makers, I noticed that procurement issues were rarely seen as strategic failures but rather treated as just another workaround.
Urgent onboarding tasks can lead managers to order hardware outside the procurement policy. Similarly, a team can rush to renew a software-as-a-service (SaaS) contract without checking if the previous license is still valid.
The list goes on, and when you multiply these issues across departments and geographies, the costs add up quickly.
For most companies, the total hidden cost of disorganized procurement can easily increase, especially for larger enterprises. Here, we’ll break down where all that money goes and how a centralized approach to IT asset management (ITAM) can help turn things around.
The Most Expensive Consequence of IT Procurement Chaos
Overall downtime is where the chaos becomes very much visible. It can manifest as delayed device deliveries or as software and hardware still in use despite having passed their end-of-life.
You’ll see some sources say the average cost of downtime is about $5,000 per minute, but more recent research says it’s about $9,000 per minute. It could be lower (but still significant) for small businesses, but the math can escalate quickly for larger companies.
Let’s try a very conservative example: 60 minutes of downtime caused by 10 new hires who haven’t received their work devices yet, with an average loss of $1,000 per minute. That would amount to $60,000 for one incident.
The reality is that reactive IT procurement is expensive.
Inflated Hardware and Software Pricing
More often than not, an unstructured approach to IT procurement results in higher prices. Emergency orders miss out on bulk pricing, redundant subscriptions pile up, and shadow IT (when employees use unapproved applications and software) adds even more expense.
Take emergency purchases as an example. If all your orders are last-minute, you might end up paying 20–50% more than usual.
As a conservative example:
- Annual hardware and software spend: $20,000
- Portion purchased reactively: 50% ($10,000)
- Average price inflation: 30%
That additional 30% on $10,000 adds $3,000 per year. And it could be avoided with the right IT inventory management software.
Blind Spots in Compliance, Contracts, and Assets
According to a 2021 EY survey, over 50% of respondent companies said contracting inefficiencies have “cost them business.” In IT procurement and ITAM, that could be in the form of missed renewals, redundancy in subscriptions, and untracked, unclear termination terms. There, companies open themselves to even more unnecessary spending and legal exposure.
Let’s consider another conservative example of a company with:
- 20 employees
- 2 SaaS tools
- Multiple hardware and software refresh cycles annually
Without any form of ITAM software, the total cost of ownership remains unclear. Purchase price becomes the focus, while maintenance, support renewals, logistics, and secure disposal go untracked.
Even with a small contract leakage of, say, 5% of annual IT spend on a $20,000 budget, you’ll arrive at $1,000 per year. Let’s now add that to one $60,000 downtime incident and $10,000 more spent on inflated IT procurement, and the total hidden cost of this conservative procurement chaos is a whopping $71,000. Even without that downtime incident, you’re still spending that unnecessary $11,000, on top of the stress of all the juggling.
Now, take note that it’s just a rough estimate. Small businesses may see lower figures, while mid-sized and large companies may see numbers in the millions. Either way, procurement chaos brings measurable financial impact.
How Does IT Asset Management Change the Equation?
It’s simple: with modern ITAM software, you get to centralize everything and get quick answers to the following questions:
- What assets do we own?
- Where are they located?
- Who is using them?
- When do they need refresh or renewal?
- What are we actually paying per asset across its lifecycle?
IT procurement becomes proactive, while volume purchasing becomes strategic. Your HR, IT, finance, and operations teams will also benefit from a shared view of what’s going on. That said, onboarding and offboarding become predictable.
From Chaos to Control with Dots: A Centralized ITAM Platform
Teams with procurement issues often struggle with a scattered vendor base. They have one for purchasing, another for shipping, and another for storage. But what if you could do all of those and more in one platform? You can with Dots.
Our software for IT asset management is an integrated platform for procurement, onboarding, offboarding, logistics, and even warehousing. We also use a multi-vendor sourcing approach, which helps you compare pricing across suppliers to secure more competitive rates.
Our platform can also communicate and integrate with human resources information systems (HRIS), mobile device management (MDM), security, and finance systems, making workflows easier across different teams.
From an IT leadership perspective, that centralization brings predictability, which eventually reduces downtime. Reduced downtime protects revenue.
If you think your organization’s procurement is eating up a huge chunk of your budget, now might be the time to evaluate a centralized approach. With Dots, you have a practical way to regain control of IT procurement and asset lifecycles in one platform.
Your next step? Book a demo with us today and see how much you can save with more predictable and strategic IT procurement.
