Technology procurement—the process of selecting and acquiring technology—frequently disappoints. Projects fail, products underperform, and costs exceed expectations. Many failures trace to predictable procurement pitfalls that can be avoided with disciplined approaches.
This guide identifies common technology procurement mistakes and provides strategies for avoidance.
Understanding Procurement Failures
Why Procurements Fail
Common failure patterns:
Requirements problems: Vague, incomplete, or changing requirements.
Evaluation failures: Poor assessment of options.
Vendor relationship issues: Misaligned expectations.
Implementation problems: Procurement success, implementation failure.
Organizational issues: Political and change problems.
The Cost of Failure
Impact of procurement failures:
Financial cost: Wasted investment.
Time lost: Delayed capabilities.
Opportunity cost: What could have been done.
Organizational damage: Lost credibility, change fatigue.
Common Pitfalls
Requirement Pitfalls
Problems in defining needs:
Vague requirements: "Improve efficiency" isn't a requirement.
Shopping list syndrome: Features without priorities.
Current state bias: Automating broken processes.
Missing stakeholders: Not engaging all affected parties.
Changing requirements: Scope creep during procurement.
Evaluation Pitfalls
Problems in assessing options:
Demo theater: Scripted demos don't reveal reality.
Feature obsession: Counting features rather than assessing fit.
Price dominance: Lowest cost without total value assessment.
Reference reliance: Only calling provided references.
Groupthink: Not challenging conventional wisdom.
Vendor Relationship Pitfalls
Problems with vendors:
Unrealistic expectations: Believing vendor promises.
Adversarial relationships: Win-lose contracting.
Vendor lock-in: Underestimating switching costs.
Relationship decay: Post-contract relationship degradation.
Best Practices
Requirements Management
Getting requirements right:
Outcome focus: What you're trying to achieve.
Priority clarity: Must-have vs. nice-to-have.
Stakeholder inclusion: All perspectives represented.
Requirements stability: Lock requirements before evaluation.
Process assessment: Fix processes before automating.
Effective Evaluation
Assessing options properly:
Structured evaluation: Consistent criteria and process.
Hands-on testing: Use the product, don't just watch demos.
Reference due diligence: Talk to customers like you.
Total cost analysis: Full cost of ownership.
Risk assessment: Vendor viability and technology risk.
Vendor Management
Managing vendor relationships:
Realistic expectations: Clear, achievable commitments.
Partnership approach: Win-win contracting.
Governance structure: Ongoing relationship management.
Performance management: Tracking and accountability.
Procurement Process
Pre-Procurement
Before formal procurement:
Problem definition: Clear articulation of need.
Market assessment: Understanding available options.
Stakeholder alignment: Organizational agreement.
Approach decision: Buy, build, or partner.
Procurement Execution
During formal procurement:
RFP development: Clear, fair solicitation.
Vendor engagement: Appropriate interaction.
Evaluation process: Rigorous assessment.
Negotiation: Fair, complete agreements.
Post-Procurement
After selection:
Transition planning: From procurement to implementation.
Relationship establishment: Working relationship setup.
Quick wins: Early value demonstration.
Governance activation: Ongoing management.
Special Considerations
Government Procurement
Unique public sector considerations:
Regulatory compliance: Procurement rules and requirements.
Protest risk: Defensible process.
Incumbent bias: Fair treatment despite relationships.
Political dynamics: Stakeholder complexity.
Cloud and SaaS
Procurement for cloud services:
Subscription economics: Different financial model.
Security assessment: Cloud security due diligence.
Contract terms: SaaS-appropriate agreements.
Exit planning: Data portability and transition.
Key Takeaways
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Requirements determine success: Garbage in, garbage out.
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Hands-on evaluation is essential: Don't rely on demos and promises.
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Total cost matters: Initial price isn't the whole story.
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References must be independent: Vendor-provided references are marketing.
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Procurement isn't done at contract signing: Implementation determines success.
Frequently Asked Questions
How do we write better requirements? Focus on outcomes, involve stakeholders, prioritize ruthlessly, test with potential vendors.
How do we avoid demo theater? Define scenarios yourself, use your data, request ad-hoc demonstrations.
What about lowest-price requirements in government? Best-value procurement allows quality consideration. Structure evaluation for what matters.
How do we handle vendor lock-in? Assess switching costs early, negotiate data portability, use standards where possible.
When should we use consultants for procurement? Complex, high-stakes purchases where internal expertise is limited.
How do we handle post-contract relationship issues? Clear governance, regular reviews, documented expectations, escalation processes.