In our last edition on the basic processes for ICT infrastructure purchase, we ended up talking about the importance of knowing the right original equipment manufacturer (OEM) to work with. This is very key and cannot be said to be overemphasized. You, as the end-user of such equipment, must get value for what you have purchased, especially knowing that the equipment in question is very expensive.
In this short piece, we shall look at the next stage of actions to be taken to procure the infrastructures.
The next thing to do is for the customer’s procurement team to engage the various OEMs in a discussion, asking each to come showcase what their infrastructures is capable of doing, showing their competitive advantage over others; they must convince the customer as to why their brand is better than their competitors. The customer, based on their internal assessment and conviction, chooses one OEM to work with and then proceed to the next stage of procurement.
The successful OEM the swings into action by sending their technical team to visit the customer’s environment with a view to scope the existing infrastructure, with a view to understanding what the customer intends to achieve when the infrastructures are procured; taking into cognizance every little detail needed to come up with a solution that would be helpful to the customer by way of getting values for the infrastructures they are about to procure. At this point, “no stone will be unturned”; every detail must be captured.
Next, the result of the scoping is reviewed with the customer’s technical team. When an understanding is reached between both teams, the result of the scoping exercise is then forwarded to the OEM’s IT solution architect, who then comes out with a bill of materials (BOM) which specifies the number of machines and other infrastructures, with a detailed architecture and configuration. The customer reviews the BOM and detailed solutions sent to them and revert to the OEM accordingly. In some cases, there will be a lot of back and forth between both parties with a view to come to a definite understanding of what solution and architecture to adopt. Once and agreement is reached, the OEM moves to the next stage, which is pricing.
Pricing for the purchase of ICT infrastructure also has a process. Here, there are companies known as distributors. Distributors are the ones that the OEMs uses to assign prices to their products. The way this works is such that the finalized BOMs is sent to the distributors through the OEM’s business partners. At this juncture, the business partners (BPs) and the distributors concludes the sales process.
Once the distributors release prices to the BPs, the prices are marked up by the BPs with a certain percentage as instructed by the OEMs. It is important to note that the BPs are not allowed to mark up prices irrationally, prices are duly controlled, and it is strictly a process based on high integrity. In some cases, the amount a BP is to use as mark-up prices is shared with the end-user by the OEM so the process can be seen to be transparent to all parties involved, especially to the customer.
Once the customer makes payment, based on agreed payment terms, the business partner, in conjunction with the distributor registers the deal with the OEM and make an order for same. The OEM then goes ahead to manufacture the ordered infrastructure, which will be delivered at an agreed period of time.
In conclusion, once the order arrives, the Business partner delivers to customer site and installation and configuration carried out, after which customer signs off. The signing off by customer closes this sales process.
Andrew Omeike
#MEMBA 11
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