Why Infiniwiz Charges Markup: The Procurement Process

One of the services we provide is the procurement of equipment, software, and other materials and services on behalf of our clients.

The process may start with a client asking to suggest a piece of software or hiring a new employee. Or, Infiniwiz can initiate the conversation because the equipment is getting old, or a software license is due for renewal. There may be a large variety of situations triggering a procurement process, but in this article, I would like to talk about the most common one – equipment purchase.

What is the procurement process?

• Design

Once the need is identified, we will then inquire about the role of the new hire to understand what applications to be used and tasks to be performed. The engineer working on the ticket will need to determine the following:

1. Manufacturer/Brand: This may depend on whether it’s a stationary workstation, a mobile laptop, or a thin client.
2. Processing power and amount of memory: This will depend on the type of task to be performed and the applications to be used. For example, you will need more memory if this is a heavy Excel user. If this is a graphical design, then there will be a need for more CPU power and a better video card.
3. The size of storage: This will depend on how much data will be stored locally during work and, again, the type of applications to be used. For example, a mechanical or architectural engineer requiring AutoCAD will need more storage than a regular Microsoft Office user.

It is also common for the support engineer to escalate the ticket if they need help making the configuration decision.

• Sourcing

After all attributes of the equipment are defined, depending on brand and model, the engineer will either reach out to a wholesaler representative to check pricing and availability or go to a known website like Amazon. When using Amazon, we pick vendors we have ordered from before and know that we will get an item that is as described and will come without delays. When talking to a rep, we sometimes need to adjust the model and specs to have it available or within the budgeted price range.

• Purchasing

The next step is placing an order and processing payment, which is a fast process with Amazon. However, often, we end up working with a vendor representative. Some Wholesalers use Net30 terms, while others require credit card payment. In either case, working with a rep means a back-and-forth email communication to finish the purchasing process.

• Tracking

The associate who placed the order for a product will then change the ticket status to “waiting for the vendor,” note the expected delivery time, and assign the ticket back to the service coordinator. At that point, the service coordinator’s job is to keep track of shipments and update clients as needed.

• Delays

Sometimes, the item gets delayed significantly or gets placed on backorder, and the client cannot wait, in this case, our service coordinator will assign the ticket to an available engineer who will research a replacement, place a new order, cancel the old order, update billing by issuing credit or billing for the additional amount.

• Billing

Immediately after purchasing, the engineer will add the item to the ticket as a billable product indicating the full description, who or what it is for, quantity, and price. Once a week, usually on Thursdays, the billing department will create invoices for all billable products flagged as unbilled in our PSA system and send them out to clients via email.

• Receiving

Delivery may take days, weeks, or months. Once the item is delivered, the service coordinator locates the appropriate ticket, updates it with a delivery note, and assigns it to an available resource. The assigned engineer will inspect the item to ensure the correct model was delivered, that it is new and not refurbished, and that it has no defects or visible damage.

• Returns

The unsatisfactory condition of the item may result in a return process where we need to repackage, notify the sender, and arrange a replacement. It is also appropriate to cancel the order, in which case, the entire purchasing process starts from the beginning.

• Provisioning

The assigned engineer will provide the equipment assuming the received equipment is in the condition we expect it to be. Since we are talking about a computer for a new employee, the engineer will follow documented onboarding process unique to the client, where they have to set up email, applications, shared spaces, and permissions appropriate for the role. This process may take 3-6 hours.

• Delivery & installation

The service coordinator will take over the ticket when the computer is ready, communicate with the client to schedule installation, and put it on the engineer’s schedule in the future. When the time comes, the engineer will bring up all necessary equipment and install a computer with monitors and peripherals. It is also part of our service to show employees how to log in and access key applications.

• Warranty & RMA

It is common for equipment to go bad in future years. If we purchase the equipment and a warranty covers it, we will work with the manufacturer through their RMA process to replace or repair the equipment. This includes the entire process from us picking up the broken equipment to installing new and provisioned equipment at the client location.

So, why do we markup purchased equipment?

When procuring equipment for our clients, there is much more that goes into it than simply buying and delivering it. Multiple individuals are involved in the purchasing process, which adds to the cost and time involved. Potential issues could arise, such as delays in delivery, returns, or warranty replacements. These factors require time and resources, so it is common for Managed Service Providers (MSPs) to charge markups on equipment sales. The markup helps to recover the cost of procurement and ensure that we can continue to provide high-quality service to our clients.

Overall, our job is to help companies create more unified business functions, improve customer service, and utilize technology to move forward. Chicago-experienced IT consulting experts will make your technology work for you and keep you from spending endless, frustrating hours managing your business IT. Managed IT is when the Infiniwiz team proactively takes care of all the IT headaches and hassles for you…So you can get done on your “to-do” list – like growing the business! If you have any questions on our onboarding and alignment process and tools, feel free to contact us!