Most IT suppliers can provide a broad range of hardware, software and services, although there may be some differences between them. For example:

• Manufacturers sell their own products and generally offer a basic level of service. This may suit you if you're confident that you don't need advice and simply need someone to supply the IT system.
• Resellers act as agents for hardware manufacturers. Some also offer software and a wide range of IT services and support.
• System integrators select the appropriate hardware and software for your specific needs and deliver an integrated, working system.
• Specialist suppliers have expertise in one specific area, such as customer relationship management systems.
• IT consultants usually provide consultancy tailored to your needs. They also sell services like IT set up and installation rather than equipment or maintenance.

How to identify potential IT suppliers?

You should consider several factors when deciding what type of IT supplier to use. These include:

• your IT budget
• your IT requirements, eg if you need equipment, services or both
• the desired level of service
• existing in-house IT skills, or the lack of
• the type of business relationship you hope to establish with the supplier
• the size and location of the supplier
• their previous experience and performance with the products/services you wish to buy
• their ability to provide systems, services and consultancy to businesses such as yours
• their technical support track-record and availability

See how to find potential IT suppliers and evaluate their proposals.

Advantages of consolidating your technology suppliers

Unless you have IT expertise in-house, it's generally best to consolidate your technology suppliers. This means using a single supplier for all hardware, software, services and support.

Consolidating your suppliers can sometimes:

• save you money and reduce your purchasing and procurement costs
• enable more efficient business processes and service delivery
• help you leverage consolidated spend and negotiate a lower price
• improve relations with a supplier due to their vested interest in your business' success
• minimise the risk of failure of business-critical services

If you buy from multiple suppliers, you'll have to decide which one is responsible when there's a problem - unless you have a service provider prepared to support your whole system.

See more on IT supplier contracts and service level agreements.

IT supplier selection process involves everything from doing market research and negotiating pricing, to establishing terms and conditions of services. It usually starts with specifying your IT requirements.

Step 1: Decide on your IT requirements

Before you buy any IT equipment or service, set your requirements and document them in detail. Define the products, equipment or services you need, and explain why you need them. Decide which requirements are essential and which are optional. Give potential suppliers your requirements document. This will provide a framework to compare the different quotations you may receive.

Step 2: Research IT solutions and suppliers

After setting your requirements, research your options. Compile a list of possible suppliers and identify three to five who can propose a solution for the budget you have set. Sources of information include:

• the internet, including the suppliers' own websites as well as independent sites
• recommendations from trusted colleagues
• recommendations from trading and business partners
• IT seminars and conferences
• computer trade magazines
• advice from relevant trade associations and professional bodies
• IT exhibitions

Step 3: Contact potential suppliers

After identifying the potential suppliers, send them either a request for proposal (RFP) or a request for quotation (RFQ).

Request for proposal

The RFP asks for suppliers to submit formal proposals. It should include:

• the agreed statement of requirements
• an indication of what format the proposal should follow
• an indication of the level of detail required in the proposal
• the timescales within which the proposal should be submitted
• the procedure for suppliers to request further information, if needed

Request for quotation

The RFQ asks potential suppliers to provide a cost for the desired product or service. You send solicitations to possible suppliers with your list of requirements, for example:

• part descriptions, specifications or numbers
• quantities or volumes
• a description or drawings of the product needed
• personnel skills or competencies for the product or service
• terms and conditions
• term of the contract
• any other value-added requirements or terms
• delivery requirements
• a draft contract

After you send requests and receive responses from interested parties, you will have to shortlist the candidates. Often, at this stage, you can ask them to provide presentations or demonstrations of their products and services to help with the final selection. See questions to ask a potential IT supplier.

To continue the selection process, you will then have to evaluate IT supplier proposals.

A new IT system can be a significant investment, so it's essential to choose the right supplier to provide it. As part of your IT supplier selection, you should interview prospective suppliers to help you assess how well they might suit your brief, and how comfortable your working relationship might be.

Here are some key questions to help you get the insight you need to choose the best IT supplier for your business.

• Will they provide all the hardware, software, licences, services, support and maintenance you need?
• Will they use subcontractors for any part of the supply (eg installation, cabling or manning a helpdesk)? If they do, make sure the subcontractors have the right kind of expertise for your system.
• Will they install and configure your system so it's fully operational?
• Will they train your staff?
• What frontline support they can provide - eg a telephone helpdesk?
• Will they take responsibility for system components purchased elsewhere?
• What sort of maintenance contracts do they provide?
• What exactly is included in their supply contract?
• What sort of warranty do they provide?
• Will they continue to provide support if you take responsibility for replacing faulty hardware yourself?
• Will they accept payment for the system only when it is installed and working to your satisfaction?
• What is and isn't included in the price - are upgrades and fixes to the software included?
• Can they provide references from other, similar companies they've helped in the past?
• Will they provide you with written documentation, such as training manuals, that will help you understand your system?
• How well do they understand your business needs?
• Do they have previous experience in your industry?
• Are they happy for you to test the proposed system, perhaps under a non-disclosure agreement?
• Are they financially viable and able to meet your requirements in the foreseeable future?

See also how to evaluate IT supplier proposals or read more about choosing the right suppliers.

After soliciting proposals from a number of IT suppliers, and receiving their responses, you will be able to shortlist, evaluate and choose a supplier.

When looking at their proposals, assess them against your IT supplier selection criteria. It might help to follow a systematic supplier selection process in deciding which supplier would best suit your needs.

STEP 1: Review the proposals

Compare proposals on a like-for-like basis and come up with a shortlist. Take into account:

• financial viability
• implementation track record
• quality and relevance of reference sites
• project management capability
• ability to understand your business at both the strategic and process levels
• technical knowledge and expertise
• confidence in the supplier's ability to provide the solution into the foreseeable future
• the cost of the proposed solution

STEP 2: Rank the candidates

Throughout the evaluation process, rank the suppliers and eliminate those that do not meet your technical requirements or fall outside your agreed budget.

This process should usually include a demonstration of their proposed offering by each of the suppliers. This gives you the opportunity to evaluate the system being proposed and the supplier.

STEP 3: Get to know them

Invite potential suppliers to visit your company. Do they understand your business needs and have experience in your industry? Do you feel comfortable dealing with them? Arrange a supplier interview and make sure to ask them key questions to help you assess the suitability and efficiency of their service.

Ensure that the shortlisted suppliers provide references and contact them as part of the evaluation process. Try to get references from businesses similar to your own as this is a useful way to assess the system and the supplier.

STEP 4: Test the solution

By this stage, you should be in a position to come up with a single preferred supplier. Consider further testing the proposed solution, particularly if the system is going to be critical to your business.

If you are happy with the proposed solution of the preferred supplier, you can begin negotiating the IT contract. You will need to formally agree on factors such as the levels of system maintenance and support, as well as the overall cost of the proposed solution.

See more on IT supplier contracts and service level agreements.

Once your new IT system is up and running, it is important to maintain it regularly to ensure optimum performance.

You will usually be able to undertake most of the basic IT maintenance tasks in-house, such as archiving or deleting old files and freeing up space on your hard drive. Tasks that are more complex may be better managed through an IT system contract.

System maintenance contracts

There are many different types of system maintenance contracts. Two main types are:

• on-site contracts - where an engineer comes to your premises to fix the problem
• return-to-depot contracts - where you need to return the equipment for repair

Maintenance contract costs vary considerably depending on the minimum response time and working hours you need. They may seem expensive, particularly for standard PCs and peripherals with extended on-site warranties.

After assessing the risks, you may decide not to get a maintenance contract and simply hold spares or purchase new parts when necessary. Keep in mind that some suppliers may be reluctant to offer helpdesk, software support and other services unless they're also maintaining the hardware.

Hardware maintenance contracts

Your IT supplier can offer you a range of hardware maintenance contracts - perhaps as part of an overall support contract. This can include tasks such as:

• annual servicing
• repairs
• technical troubleshooting
• warranty upgrades

Hardware failure, theft or damage are major risks to any business. System maintenance is an essential part of managing these risks. Many IT suppliers can monitor problems remotely and take action to prevent a system failure. See computer hardware for business.

Software maintenance contracts

Many IT suppliers offer software maintenance contracts when you purchase their software products. These can include:

• recurring licensing fees
• product upgrades
• new versions
• patches and bug fixes

Some suppliers charge for these, while others will include them free with your purchase. You should also look for a supplier who gives you the original disks and licences if your software comes pre-installed. Read about computer software for business.

If you don't have in-house experience, then look for a supplier that offers maintenance. Costs will vary depending on the type of software you're using, but the general rule of thumb is to have costs below 15 per cent of the purchase price.

If using cloud computing, maintenance and other upgrades will be managed 'off-site' by the service provider.

System management is usually the biggest cost over the lifetime of an IT system. It includes installation, upgrades, expansion, maintenance, support, training and the time your staff spend dealing with system problems.

It's essential to consider full system lifecycle costs. Saving on purchase costs could result in significant additional costs on an ongoing basis, while cutting back on services could waste a fortune in staff time or lost business.

Initial IT set up costs

Initial costs could include:

• consultancy
• hardware costs
• software licence fees
• software configuration and customisation work
• installation
• staff training
• providing the necessary infrastructure, such as network cabling or an electricity supply
• compliance with health and safety law relating to computer use

Ongoing IT maintenance costs

Ongoing management costs could include:

• software support contracts - fees for licence renewals and upgrades
• hardware upgrades
• expansion of memory, disk size, communications capacity
• support - telephone, email, online, on-site
• maintenance and replacements
• compliance with health and safety legislation relating to computer use
• staff training
• costs of consumables, such as printer cartridges, ink and paper
• communications charges - telephone costs, internet access and subscription charges

Agreeing an IT budget and contract with a supplier could take time. Specify every aspect of the project in as much detail as possible. This will help to control costs and highlight any problems you encounter during the project.

When you negotiate a contract for IT systems or services, your supplier will usually expect payment upon delivery of the system. However, it is worthwhile seeking to extend the payment period until the system is actually installed and you're happy with how it works.

See how to negotiate IT supplier contracts and service level agreements.

Technology can fail in any business, regardless of how big or small it is. To safeguard your systems, you should think about having some level of IT support in place.

Start by considering carefully how much technical support you need. This depends on how much IT expertise you have in-house, how important it is to keep systems running smoothly, and how much you can sensibly afford for a support contract.

Types of IT support contracts and services

Support services that could benefit your business include:

• set up tasks, such as installation and configuration
• staff training and upskilling
• remote monitoring and management, enabling rapid response to errors and failures
• telephone, email or online support
• guaranteed response times, as part of supplier SLA, reducing downtime and revenue loss
• on-site support
• IT asset management and inventory
• security management, including software patches, virus protection, and storage and backup task

Importance of IT support for your business

Running a business relies heavily on IT systems. Because of this, problems and issues with IT systems can cause significant difficulties for your business, including:

• data loss
• data storage and processing
• service interruption
• business interruption
• cyber attacks

Having a dedicated IT support service in place means that you have access to highly specialised talent and resources as and when you need them.

You should weigh this against the costs of procuring such service to determine the real benefits to your business. See IT system cost evaluation.

When entering a contract with your IT supplier, make sure that the terms and conditions are fair to you both. Once you enter into an agreement, document the terms of your engagement in a written contract.

Be completely clear about what the contract with your supplier includes. Hidden extras can be expensive.

Things to consider before signing an IT service contract

Check if you'll receive:

• on-site service calls - a certain number may be included or charged at a reduced rate
• preventative maintenance, eg using anti-virus software and firewalls to protect your system
• remote monitoring and diagnosis - if included, check if you need any extra equipment or communication links
• telephone support - check if any limits apply
• warranties - check what warranties, if any, are included
• software upgrades - check if upgrades are free, or if you have to pay a subscription or licences for new versions
• software support - check if you can report problems and receive help, patches and bug fixes
• user training - a limited amount of training may be included in the system's purchase price, but some suppliers will charge extra
• manuals - you may need them if you terminate your supplier contract

IT service level agreements (SLAs)

When buying IT services, draw up a service level agreement with the supplier to specify exactly what you expect from them. A typical SLA should cover:

• scope - details of the hardware and software that is to be covered
• the range of services - what the supplier will be required to provide
• service availability - when the service should be available
• response times - usually the faster the response times, the greater the cost
• escalation procedures - the ability to intensify the response to problems, eg move from off-site diagnosis to on-site support
• record-keeping - ways to document problems and solutions, and keep records for dispute resolution
• performance review - to maintain acceptable levels of service over time
• supplier obligations - such as providing spare parts, the qualifications of support staff and the need to meet response times
• customer obligations - your responsibilities, eg informing the supplier about changes that affect the scope of the contract, and the cooperation of staff with the supplier
• termination of agreement - a formal process that defines how the contract may be terminated

For more tips on agreeing supplier contracts, see how to negotiate supplier contracts.

Building a successful relationship with your IT supplier is essential to your system's success.

Trying to buy IT systems and services at the lowest possible cost - with no regard to your business goals or the overall cost of ownership - is likely to lead to a strained relationship with your supplier. This can cause both system and business problems.

Advantages of a good supplier relationship

Ideally, your supplier should have a clear view of your business goals and the role of IT in achieving these. This will help you build a relationship that can deliver a number of benefits including:

• ensure that service level agreements are met and that system availability is high
• speedy resolution of problems or queries
• valuable guidance from the supplier on your business' future IT direction through their knowledge of your industry sector and the latest IT developments
• delivery of the anticipated business benefits

Tips for effective supplier relationship

To build a successful relationship with any IT supplier you should be clear from the outset about what you both expect from the arrangement. Make sure:

• you both have clear expectations of exactly what you'll get in terms of hardware, software and services
• the business relationship is mutually beneficial - your supplier will have no interest in whether you achieve your business goals if you just want goods as cheaply as possible
• there are specific targets to be reached at set dates representing what your business gets out of its IT systems - not the delivery of boxes and cables
• the supplier provides regular reports of progress towards the agreed business objectives for the system
• you hold regular reviews with your supplier to see how things are going
• you have enough flexibility to accommodate change - whether this is through new technologies, the business environment or refined business goals
• you have a signed contract that you both agree to, that includes details of each party's obligations and what should happen in the event of a disagreement or dispute

Find out more about how to manage your suppliers.

Most IT suppliers can provide a broad range of hardware, software and services, although there may be some differences between them. For example:

• Manufacturers sell their own products and generally offer a basic level of service. This may suit you if you're confident that you don't need advice and simply need someone to supply the IT system.
• Resellers act as agents for hardware manufacturers. Some also offer software and a wide range of IT services and support.
• System integrators select the appropriate hardware and software for your specific needs and deliver an integrated, working system.
• Specialist suppliers have expertise in one specific area, such as customer relationship management systems.
• IT consultants usually provide consultancy tailored to your needs. They also sell services like IT set up and installation rather than equipment or maintenance.

How to identify potential IT suppliers?

You should consider several factors when deciding what type of IT supplier to use. These include:

• your IT budget
• your IT requirements, eg if you need equipment, services or both
• the desired level of service
• existing in-house IT skills, or the lack of
• the type of business relationship you hope to establish with the supplier
• the size and location of the supplier
• their previous experience and performance with the products/services you wish to buy
• their ability to provide systems, services and consultancy to businesses such as yours
• their technical support track-record and availability

See how to find potential IT suppliers and evaluate their proposals.

Advantages of consolidating your technology suppliers

Unless you have IT expertise in-house, it's generally best to consolidate your technology suppliers. This means using a single supplier for all hardware, software, services and support.

Consolidating your suppliers can sometimes:

• save you money and reduce your purchasing and procurement costs
• enable more efficient business processes and service delivery
• help you leverage consolidated spend and negotiate a lower price
• improve relations with a supplier due to their vested interest in your business' success
• minimise the risk of failure of business-critical services

If you buy from multiple suppliers, you'll have to decide which one is responsible when there's a problem - unless you have a service provider prepared to support your whole system.

See more on IT supplier contracts and service level agreements.

IT supplier selection process involves everything from doing market research and negotiating pricing, to establishing terms and conditions of services. It usually starts with specifying your IT requirements.

Step 1: Decide on your IT requirements

Before you buy any IT equipment or service, set your requirements and document them in detail. Define the products, equipment or services you need, and explain why you need them. Decide which requirements are essential and which are optional. Give potential suppliers your requirements document. This will provide a framework to compare the different quotations you may receive.

Step 2: Research IT solutions and suppliers

After setting your requirements, research your options. Compile a list of possible suppliers and identify three to five who can propose a solution for the budget you have set. Sources of information include:

• the internet, including the suppliers' own websites as well as independent sites
• recommendations from trusted colleagues
• recommendations from trading and business partners
• IT seminars and conferences
• computer trade magazines
• advice from relevant trade associations and professional bodies
• IT exhibitions

Step 3: Contact potential suppliers

After identifying the potential suppliers, send them either a request for proposal (RFP) or a request for quotation (RFQ).

Request for proposal

The RFP asks for suppliers to submit formal proposals. It should include:

• the agreed statement of requirements
• an indication of what format the proposal should follow
• an indication of the level of detail required in the proposal
• the timescales within which the proposal should be submitted
• the procedure for suppliers to request further information, if needed

Request for quotation

The RFQ asks potential suppliers to provide a cost for the desired product or service. You send solicitations to possible suppliers with your list of requirements, for example:

• part descriptions, specifications or numbers
• quantities or volumes
• a description or drawings of the product needed
• personnel skills or competencies for the product or service
• terms and conditions
• term of the contract
• any other value-added requirements or terms
• delivery requirements
• a draft contract

After you send requests and receive responses from interested parties, you will have to shortlist the candidates. Often, at this stage, you can ask them to provide presentations or demonstrations of their products and services to help with the final selection. See questions to ask a potential IT supplier.

To continue the selection process, you will then have to evaluate IT supplier proposals.

A new IT system can be a significant investment, so it's essential to choose the right supplier to provide it. As part of your IT supplier selection, you should interview prospective suppliers to help you assess how well they might suit your brief, and how comfortable your working relationship might be.

Here are some key questions to help you get the insight you need to choose the best IT supplier for your business.

• Will they provide all the hardware, software, licences, services, support and maintenance you need?
• Will they use subcontractors for any part of the supply (eg installation, cabling or manning a helpdesk)? If they do, make sure the subcontractors have the right kind of expertise for your system.
• Will they install and configure your system so it's fully operational?
• Will they train your staff?
• What frontline support they can provide - eg a telephone helpdesk?
• Will they take responsibility for system components purchased elsewhere?
• What sort of maintenance contracts do they provide?
• What exactly is included in their supply contract?
• What sort of warranty do they provide?
• Will they continue to provide support if you take responsibility for replacing faulty hardware yourself?
• Will they accept payment for the system only when it is installed and working to your satisfaction?
• What is and isn't included in the price - are upgrades and fixes to the software included?
• Can they provide references from other, similar companies they've helped in the past?
• Will they provide you with written documentation, such as training manuals, that will help you understand your system?
• How well do they understand your business needs?
• Do they have previous experience in your industry?
• Are they happy for you to test the proposed system, perhaps under a non-disclosure agreement?
• Are they financially viable and able to meet your requirements in the foreseeable future?

See also how to evaluate IT supplier proposals or read more about choosing the right suppliers.

After soliciting proposals from a number of IT suppliers, and receiving their responses, you will be able to shortlist, evaluate and choose a supplier.

When looking at their proposals, assess them against your IT supplier selection criteria. It might help to follow a systematic supplier selection process in deciding which supplier would best suit your needs.

STEP 1: Review the proposals

Compare proposals on a like-for-like basis and come up with a shortlist. Take into account:

• financial viability
• implementation track record
• quality and relevance of reference sites
• project management capability
• ability to understand your business at both the strategic and process levels
• technical knowledge and expertise
• confidence in the supplier's ability to provide the solution into the foreseeable future
• the cost of the proposed solution

STEP 2: Rank the candidates

Throughout the evaluation process, rank the suppliers and eliminate those that do not meet your technical requirements or fall outside your agreed budget.

This process should usually include a demonstration of their proposed offering by each of the suppliers. This gives you the opportunity to evaluate the system being proposed and the supplier.

STEP 3: Get to know them

Invite potential suppliers to visit your company. Do they understand your business needs and have experience in your industry? Do you feel comfortable dealing with them? Arrange a supplier interview and make sure to ask them key questions to help you assess the suitability and efficiency of their service.

Ensure that the shortlisted suppliers provide references and contact them as part of the evaluation process. Try to get references from businesses similar to your own as this is a useful way to assess the system and the supplier.

STEP 4: Test the solution

By this stage, you should be in a position to come up with a single preferred supplier. Consider further testing the proposed solution, particularly if the system is going to be critical to your business.

If you are happy with the proposed solution of the preferred supplier, you can begin negotiating the IT contract. You will need to formally agree on factors such as the levels of system maintenance and support, as well as the overall cost of the proposed solution.

See more on IT supplier contracts and service level agreements.

Once your new IT system is up and running, it is important to maintain it regularly to ensure optimum performance.

You will usually be able to undertake most of the basic IT maintenance tasks in-house, such as archiving or deleting old files and freeing up space on your hard drive. Tasks that are more complex may be better managed through an IT system contract.

System maintenance contracts

There are many different types of system maintenance contracts. Two main types are:

• on-site contracts - where an engineer comes to your premises to fix the problem
• return-to-depot contracts - where you need to return the equipment for repair

Maintenance contract costs vary considerably depending on the minimum response time and working hours you need. They may seem expensive, particularly for standard PCs and peripherals with extended on-site warranties.

After assessing the risks, you may decide not to get a maintenance contract and simply hold spares or purchase new parts when necessary. Keep in mind that some suppliers may be reluctant to offer helpdesk, software support and other services unless they're also maintaining the hardware.

Hardware maintenance contracts

Your IT supplier can offer you a range of hardware maintenance contracts - perhaps as part of an overall support contract. This can include tasks such as:

• annual servicing
• repairs
• technical troubleshooting
• warranty upgrades

Hardware failure, theft or damage are major risks to any business. System maintenance is an essential part of managing these risks. Many IT suppliers can monitor problems remotely and take action to prevent a system failure. See computer hardware for business.

Software maintenance contracts

Many IT suppliers offer software maintenance contracts when you purchase their software products. These can include:

• recurring licensing fees
• product upgrades
• new versions
• patches and bug fixes

Some suppliers charge for these, while others will include them free with your purchase. You should also look for a supplier who gives you the original disks and licences if your software comes pre-installed. Read about computer software for business.

If you don't have in-house experience, then look for a supplier that offers maintenance. Costs will vary depending on the type of software you're using, but the general rule of thumb is to have costs below 15 per cent of the purchase price.

If using cloud computing, maintenance and other upgrades will be managed 'off-site' by the service provider.

System management is usually the biggest cost over the lifetime of an IT system. It includes installation, upgrades, expansion, maintenance, support, training and the time your staff spend dealing with system problems.

It's essential to consider full system lifecycle costs. Saving on purchase costs could result in significant additional costs on an ongoing basis, while cutting back on services could waste a fortune in staff time or lost business.

Initial IT set up costs

Initial costs could include:

• consultancy
• hardware costs
• software licence fees
• software configuration and customisation work
• installation
• staff training
• providing the necessary infrastructure, such as network cabling or an electricity supply
• compliance with health and safety law relating to computer use

Ongoing IT maintenance costs

Ongoing management costs could include:

• software support contracts - fees for licence renewals and upgrades
• hardware upgrades
• expansion of memory, disk size, communications capacity
• support - telephone, email, online, on-site
• maintenance and replacements
• compliance with health and safety legislation relating to computer use
• staff training
• costs of consumables, such as printer cartridges, ink and paper
• communications charges - telephone costs, internet access and subscription charges

Agreeing an IT budget and contract with a supplier could take time. Specify every aspect of the project in as much detail as possible. This will help to control costs and highlight any problems you encounter during the project.

When you negotiate a contract for IT systems or services, your supplier will usually expect payment upon delivery of the system. However, it is worthwhile seeking to extend the payment period until the system is actually installed and you're happy with how it works.

See how to negotiate IT supplier contracts and service level agreements.

Technology can fail in any business, regardless of how big or small it is. To safeguard your systems, you should think about having some level of IT support in place.

Start by considering carefully how much technical support you need. This depends on how much IT expertise you have in-house, how important it is to keep systems running smoothly, and how much you can sensibly afford for a support contract.

Types of IT support contracts and services

Support services that could benefit your business include:

• set up tasks, such as installation and configuration
• staff training and upskilling
• remote monitoring and management, enabling rapid response to errors and failures
• telephone, email or online support
• guaranteed response times, as part of supplier SLA, reducing downtime and revenue loss
• on-site support
• IT asset management and inventory
• security management, including software patches, virus protection, and storage and backup task

Importance of IT support for your business

Running a business relies heavily on IT systems. Because of this, problems and issues with IT systems can cause significant difficulties for your business, including:

• data loss
• data storage and processing
• service interruption
• business interruption
• cyber attacks

Having a dedicated IT support service in place means that you have access to highly specialised talent and resources as and when you need them.

You should weigh this against the costs of procuring such service to determine the real benefits to your business. See IT system cost evaluation.

When entering a contract with your IT supplier, make sure that the terms and conditions are fair to you both. Once you enter into an agreement, document the terms of your engagement in a written contract.

Be completely clear about what the contract with your supplier includes. Hidden extras can be expensive.

Things to consider before signing an IT service contract

Check if you'll receive:

• on-site service calls - a certain number may be included or charged at a reduced rate
• preventative maintenance, eg using anti-virus software and firewalls to protect your system
• remote monitoring and diagnosis - if included, check if you need any extra equipment or communication links
• telephone support - check if any limits apply
• warranties - check what warranties, if any, are included
• software upgrades - check if upgrades are free, or if you have to pay a subscription or licences for new versions
• software support - check if you can report problems and receive help, patches and bug fixes
• user training - a limited amount of training may be included in the system's purchase price, but some suppliers will charge extra
• manuals - you may need them if you terminate your supplier contract

IT service level agreements (SLAs)

When buying IT services, draw up a service level agreement with the supplier to specify exactly what you expect from them. A typical SLA should cover:

• scope - details of the hardware and software that is to be covered
• the range of services - what the supplier will be required to provide
• service availability - when the service should be available
• response times - usually the faster the response times, the greater the cost
• escalation procedures - the ability to intensify the response to problems, eg move from off-site diagnosis to on-site support
• record-keeping - ways to document problems and solutions, and keep records for dispute resolution
• performance review - to maintain acceptable levels of service over time
• supplier obligations - such as providing spare parts, the qualifications of support staff and the need to meet response times
• customer obligations - your responsibilities, eg informing the supplier about changes that affect the scope of the contract, and the cooperation of staff with the supplier
• termination of agreement - a formal process that defines how the contract may be terminated

For more tips on agreeing supplier contracts, see how to negotiate supplier contracts.

Building a successful relationship with your IT supplier is essential to your system's success.

Trying to buy IT systems and services at the lowest possible cost - with no regard to your business goals or the overall cost of ownership - is likely to lead to a strained relationship with your supplier. This can cause both system and business problems.

Advantages of a good supplier relationship

Ideally, your supplier should have a clear view of your business goals and the role of IT in achieving these. This will help you build a relationship that can deliver a number of benefits including:

• ensure that service level agreements are met and that system availability is high
• speedy resolution of problems or queries
• valuable guidance from the supplier on your business' future IT direction through their knowledge of your industry sector and the latest IT developments
• delivery of the anticipated business benefits

Tips for effective supplier relationship

To build a successful relationship with any IT supplier you should be clear from the outset about what you both expect from the arrangement. Make sure:

• you both have clear expectations of exactly what you'll get in terms of hardware, software and services
• the business relationship is mutually beneficial - your supplier will have no interest in whether you achieve your business goals if you just want goods as cheaply as possible
• there are specific targets to be reached at set dates representing what your business gets out of its IT systems - not the delivery of boxes and cables
• the supplier provides regular reports of progress towards the agreed business objectives for the system
• you hold regular reviews with your supplier to see how things are going
• you have enough flexibility to accommodate change - whether this is through new technologies, the business environment or refined business goals
• you have a signed contract that you both agree to, that includes details of each party's obligations and what should happen in the event of a disagreement or dispute

Find out more about how to manage your suppliers.

Most IT suppliers can provide a broad range of hardware, software and services, although there may be some differences between them. For example:

• Manufacturers sell their own products and generally offer a basic level of service. This may suit you if you're confident that you don't need advice and simply need someone to supply the IT system.
• Resellers act as agents for hardware manufacturers. Some also offer software and a wide range of IT services and support.
• System integrators select the appropriate hardware and software for your specific needs and deliver an integrated, working system.
• Specialist suppliers have expertise in one specific area, such as customer relationship management systems.
• IT consultants usually provide consultancy tailored to your needs. They also sell services like IT set up and installation rather than equipment or maintenance.

How to identify potential IT suppliers?

You should consider several factors when deciding what type of IT supplier to use. These include:

• your IT budget
• your IT requirements, eg if you need equipment, services or both
• the desired level of service
• existing in-house IT skills, or the lack of
• the type of business relationship you hope to establish with the supplier
• the size and location of the supplier
• their previous experience and performance with the products/services you wish to buy
• their ability to provide systems, services and consultancy to businesses such as yours
• their technical support track-record and availability

See how to find potential IT suppliers and evaluate their proposals.

Advantages of consolidating your technology suppliers

Unless you have IT expertise in-house, it's generally best to consolidate your technology suppliers. This means using a single supplier for all hardware, software, services and support.

Consolidating your suppliers can sometimes:

• save you money and reduce your purchasing and procurement costs
• enable more efficient business processes and service delivery
• help you leverage consolidated spend and negotiate a lower price
• improve relations with a supplier due to their vested interest in your business' success
• minimise the risk of failure of business-critical services

If you buy from multiple suppliers, you'll have to decide which one is responsible when there's a problem - unless you have a service provider prepared to support your whole system.

See more on IT supplier contracts and service level agreements.

IT supplier selection process involves everything from doing market research and negotiating pricing, to establishing terms and conditions of services. It usually starts with specifying your IT requirements.

Step 1: Decide on your IT requirements

Before you buy any IT equipment or service, set your requirements and document them in detail. Define the products, equipment or services you need, and explain why you need them. Decide which requirements are essential and which are optional. Give potential suppliers your requirements document. This will provide a framework to compare the different quotations you may receive.

Step 2: Research IT solutions and suppliers

After setting your requirements, research your options. Compile a list of possible suppliers and identify three to five who can propose a solution for the budget you have set. Sources of information include:

• the internet, including the suppliers' own websites as well as independent sites
• recommendations from trusted colleagues
• recommendations from trading and business partners
• IT seminars and conferences
• computer trade magazines
• advice from relevant trade associations and professional bodies
• IT exhibitions

Step 3: Contact potential suppliers

After identifying the potential suppliers, send them either a request for proposal (RFP) or a request for quotation (RFQ).

Request for proposal

The RFP asks for suppliers to submit formal proposals. It should include:

• the agreed statement of requirements
• an indication of what format the proposal should follow
• an indication of the level of detail required in the proposal
• the timescales within which the proposal should be submitted
• the procedure for suppliers to request further information, if needed

Request for quotation

The RFQ asks potential suppliers to provide a cost for the desired product or service. You send solicitations to possible suppliers with your list of requirements, for example:

• part descriptions, specifications or numbers
• quantities or volumes
• a description or drawings of the product needed
• personnel skills or competencies for the product or service
• terms and conditions
• term of the contract
• any other value-added requirements or terms
• delivery requirements
• a draft contract

After you send requests and receive responses from interested parties, you will have to shortlist the candidates. Often, at this stage, you can ask them to provide presentations or demonstrations of their products and services to help with the final selection. See questions to ask a potential IT supplier.

To continue the selection process, you will then have to evaluate IT supplier proposals.

A new IT system can be a significant investment, so it's essential to choose the right supplier to provide it. As part of your IT supplier selection, you should interview prospective suppliers to help you assess how well they might suit your brief, and how comfortable your working relationship might be.

Here are some key questions to help you get the insight you need to choose the best IT supplier for your business.

• Will they provide all the hardware, software, licences, services, support and maintenance you need?
• Will they use subcontractors for any part of the supply (eg installation, cabling or manning a helpdesk)? If they do, make sure the subcontractors have the right kind of expertise for your system.
• Will they install and configure your system so it's fully operational?
• Will they train your staff?
• What frontline support they can provide - eg a telephone helpdesk?
• Will they take responsibility for system components purchased elsewhere?
• What sort of maintenance contracts do they provide?
• What exactly is included in their supply contract?
• What sort of warranty do they provide?
• Will they continue to provide support if you take responsibility for replacing faulty hardware yourself?
• Will they accept payment for the system only when it is installed and working to your satisfaction?
• What is and isn't included in the price - are upgrades and fixes to the software included?
• Can they provide references from other, similar companies they've helped in the past?
• Will they provide you with written documentation, such as training manuals, that will help you understand your system?
• How well do they understand your business needs?
• Do they have previous experience in your industry?
• Are they happy for you to test the proposed system, perhaps under a non-disclosure agreement?
• Are they financially viable and able to meet your requirements in the foreseeable future?

See also how to evaluate IT supplier proposals or read more about choosing the right suppliers.

After soliciting proposals from a number of IT suppliers, and receiving their responses, you will be able to shortlist, evaluate and choose a supplier.

When looking at their proposals, assess them against your IT supplier selection criteria. It might help to follow a systematic supplier selection process in deciding which supplier would best suit your needs.

STEP 1: Review the proposals

Compare proposals on a like-for-like basis and come up with a shortlist. Take into account:

• financial viability
• implementation track record
• quality and relevance of reference sites
• project management capability
• ability to understand your business at both the strategic and process levels
• technical knowledge and expertise
• confidence in the supplier's ability to provide the solution into the foreseeable future
• the cost of the proposed solution

STEP 2: Rank the candidates

Throughout the evaluation process, rank the suppliers and eliminate those that do not meet your technical requirements or fall outside your agreed budget.

This process should usually include a demonstration of their proposed offering by each of the suppliers. This gives you the opportunity to evaluate the system being proposed and the supplier.

STEP 3: Get to know them

Invite potential suppliers to visit your company. Do they understand your business needs and have experience in your industry? Do you feel comfortable dealing with them? Arrange a supplier interview and make sure to ask them key questions to help you assess the suitability and efficiency of their service.

Ensure that the shortlisted suppliers provide references and contact them as part of the evaluation process. Try to get references from businesses similar to your own as this is a useful way to assess the system and the supplier.

STEP 4: Test the solution

By this stage, you should be in a position to come up with a single preferred supplier. Consider further testing the proposed solution, particularly if the system is going to be critical to your business.

If you are happy with the proposed solution of the preferred supplier, you can begin negotiating the IT contract. You will need to formally agree on factors such as the levels of system maintenance and support, as well as the overall cost of the proposed solution.

See more on IT supplier contracts and service level agreements.

Once your new IT system is up and running, it is important to maintain it regularly to ensure optimum performance.

You will usually be able to undertake most of the basic IT maintenance tasks in-house, such as archiving or deleting old files and freeing up space on your hard drive. Tasks that are more complex may be better managed through an IT system contract.

System maintenance contracts

There are many different types of system maintenance contracts. Two main types are:

• on-site contracts - where an engineer comes to your premises to fix the problem
• return-to-depot contracts - where you need to return the equipment for repair

Maintenance contract costs vary considerably depending on the minimum response time and working hours you need. They may seem expensive, particularly for standard PCs and peripherals with extended on-site warranties.

After assessing the risks, you may decide not to get a maintenance contract and simply hold spares or purchase new parts when necessary. Keep in mind that some suppliers may be reluctant to offer helpdesk, software support and other services unless they're also maintaining the hardware.

Hardware maintenance contracts

Your IT supplier can offer you a range of hardware maintenance contracts - perhaps as part of an overall support contract. This can include tasks such as:

• annual servicing
• repairs
• technical troubleshooting
• warranty upgrades

Hardware failure, theft or damage are major risks to any business. System maintenance is an essential part of managing these risks. Many IT suppliers can monitor problems remotely and take action to prevent a system failure. See computer hardware for business.

Software maintenance contracts

Many IT suppliers offer software maintenance contracts when you purchase their software products. These can include:

• recurring licensing fees
• product upgrades
• new versions
• patches and bug fixes

Some suppliers charge for these, while others will include them free with your purchase. You should also look for a supplier who gives you the original disks and licences if your software comes pre-installed. Read about computer software for business.

If you don't have in-house experience, then look for a supplier that offers maintenance. Costs will vary depending on the type of software you're using, but the general rule of thumb is to have costs below 15 per cent of the purchase price.

If using cloud computing, maintenance and other upgrades will be managed 'off-site' by the service provider.

System management is usually the biggest cost over the lifetime of an IT system. It includes installation, upgrades, expansion, maintenance, support, training and the time your staff spend dealing with system problems.

It's essential to consider full system lifecycle costs. Saving on purchase costs could result in significant additional costs on an ongoing basis, while cutting back on services could waste a fortune in staff time or lost business.

Initial IT set up costs

Initial costs could include:

• consultancy
• hardware costs
• software licence fees
• software configuration and customisation work
• installation
• staff training
• providing the necessary infrastructure, such as network cabling or an electricity supply
• compliance with health and safety law relating to computer use

Ongoing IT maintenance costs

Ongoing management costs could include:

• software support contracts - fees for licence renewals and upgrades
• hardware upgrades
• expansion of memory, disk size, communications capacity
• support - telephone, email, online, on-site
• maintenance and replacements
• compliance with health and safety legislation relating to computer use
• staff training
• costs of consumables, such as printer cartridges, ink and paper
• communications charges - telephone costs, internet access and subscription charges

Agreeing an IT budget and contract with a supplier could take time. Specify every aspect of the project in as much detail as possible. This will help to control costs and highlight any problems you encounter during the project.

When you negotiate a contract for IT systems or services, your supplier will usually expect payment upon delivery of the system. However, it is worthwhile seeking to extend the payment period until the system is actually installed and you're happy with how it works.

See how to negotiate IT supplier contracts and service level agreements.

Technology can fail in any business, regardless of how big or small it is. To safeguard your systems, you should think about having some level of IT support in place.

Start by considering carefully how much technical support you need. This depends on how much IT expertise you have in-house, how important it is to keep systems running smoothly, and how much you can sensibly afford for a support contract.

Types of IT support contracts and services

Support services that could benefit your business include:

• set up tasks, such as installation and configuration
• staff training and upskilling
• remote monitoring and management, enabling rapid response to errors and failures
• telephone, email or online support
• guaranteed response times, as part of supplier SLA, reducing downtime and revenue loss
• on-site support
• IT asset management and inventory
• security management, including software patches, virus protection, and storage and backup task

Importance of IT support for your business

Running a business relies heavily on IT systems. Because of this, problems and issues with IT systems can cause significant difficulties for your business, including:

• data loss
• data storage and processing
• service interruption
• business interruption
• cyber attacks

Having a dedicated IT support service in place means that you have access to highly specialised talent and resources as and when you need them.

You should weigh this against the costs of procuring such service to determine the real benefits to your business. See IT system cost evaluation.

When entering a contract with your IT supplier, make sure that the terms and conditions are fair to you both. Once you enter into an agreement, document the terms of your engagement in a written contract.

Be completely clear about what the contract with your supplier includes. Hidden extras can be expensive.

Things to consider before signing an IT service contract

Check if you'll receive:

• on-site service calls - a certain number may be included or charged at a reduced rate
• preventative maintenance, eg using anti-virus software and firewalls to protect your system
• remote monitoring and diagnosis - if included, check if you need any extra equipment or communication links
• telephone support - check if any limits apply
• warranties - check what warranties, if any, are included
• software upgrades - check if upgrades are free, or if you have to pay a subscription or licences for new versions
• software support - check if you can report problems and receive help, patches and bug fixes
• user training - a limited amount of training may be included in the system's purchase price, but some suppliers will charge extra
• manuals - you may need them if you terminate your supplier contract

IT service level agreements (SLAs)

When buying IT services, draw up a service level agreement with the supplier to specify exactly what you expect from them. A typical SLA should cover:

• scope - details of the hardware and software that is to be covered
• the range of services - what the supplier will be required to provide
• service availability - when the service should be available
• response times - usually the faster the response times, the greater the cost
• escalation procedures - the ability to intensify the response to problems, eg move from off-site diagnosis to on-site support
• record-keeping - ways to document problems and solutions, and keep records for dispute resolution
• performance review - to maintain acceptable levels of service over time
• supplier obligations - such as providing spare parts, the qualifications of support staff and the need to meet response times
• customer obligations - your responsibilities, eg informing the supplier about changes that affect the scope of the contract, and the cooperation of staff with the supplier
• termination of agreement - a formal process that defines how the contract may be terminated

For more tips on agreeing supplier contracts, see how to negotiate supplier contracts.

Building a successful relationship with your IT supplier is essential to your system's success.

Trying to buy IT systems and services at the lowest possible cost - with no regard to your business goals or the overall cost of ownership - is likely to lead to a strained relationship with your supplier. This can cause both system and business problems.

Advantages of a good supplier relationship

Ideally, your supplier should have a clear view of your business goals and the role of IT in achieving these. This will help you build a relationship that can deliver a number of benefits including:

• ensure that service level agreements are met and that system availability is high
• speedy resolution of problems or queries
• valuable guidance from the supplier on your business' future IT direction through their knowledge of your industry sector and the latest IT developments
• delivery of the anticipated business benefits

Tips for effective supplier relationship

To build a successful relationship with any IT supplier you should be clear from the outset about what you both expect from the arrangement. Make sure:

• you both have clear expectations of exactly what you'll get in terms of hardware, software and services
• the business relationship is mutually beneficial - your supplier will have no interest in whether you achieve your business goals if you just want goods as cheaply as possible
• there are specific targets to be reached at set dates representing what your business gets out of its IT systems - not the delivery of boxes and cables
• the supplier provides regular reports of progress towards the agreed business objectives for the system
• you hold regular reviews with your supplier to see how things are going
• you have enough flexibility to accommodate change - whether this is through new technologies, the business environment or refined business goals
• you have a signed contract that you both agree to, that includes details of each party's obligations and what should happen in the event of a disagreement or dispute

Find out more about how to manage your suppliers.

Most IT suppliers can provide a broad range of hardware, software and services, although there may be some differences between them. For example:

• Manufacturers sell their own products and generally offer a basic level of service. This may suit you if you're confident that you don't need advice and simply need someone to supply the IT system.
• Resellers act as agents for hardware manufacturers. Some also offer software and a wide range of IT services and support.
• System integrators select the appropriate hardware and software for your specific needs and deliver an integrated, working system.
• Specialist suppliers have expertise in one specific area, such as customer relationship management systems.
• IT consultants usually provide consultancy tailored to your needs. They also sell services like IT set up and installation rather than equipment or maintenance.

How to identify potential IT suppliers?

You should consider several factors when deciding what type of IT supplier to use. These include:

• your IT budget
• your IT requirements, eg if you need equipment, services or both
• the desired level of service
• existing in-house IT skills, or the lack of
• the type of business relationship you hope to establish with the supplier
• the size and location of the supplier
• their previous experience and performance with the products/services you wish to buy
• their ability to provide systems, services and consultancy to businesses such as yours
• their technical support track-record and availability

See how to find potential IT suppliers and evaluate their proposals.

Advantages of consolidating your technology suppliers

Unless you have IT expertise in-house, it's generally best to consolidate your technology suppliers. This means using a single supplier for all hardware, software, services and support.

Consolidating your suppliers can sometimes:

• save you money and reduce your purchasing and procurement costs
• enable more efficient business processes and service delivery
• help you leverage consolidated spend and negotiate a lower price
• improve relations with a supplier due to their vested interest in your business' success
• minimise the risk of failure of business-critical services

If you buy from multiple suppliers, you'll have to decide which one is responsible when there's a problem - unless you have a service provider prepared to support your whole system.

See more on IT supplier contracts and service level agreements.

IT supplier selection process involves everything from doing market research and negotiating pricing, to establishing terms and conditions of services. It usually starts with specifying your IT requirements.

Step 1: Decide on your IT requirements

Before you buy any IT equipment or service, set your requirements and document them in detail. Define the products, equipment or services you need, and explain why you need them. Decide which requirements are essential and which are optional. Give potential suppliers your requirements document. This will provide a framework to compare the different quotations you may receive.

Step 2: Research IT solutions and suppliers

After setting your requirements, research your options. Compile a list of possible suppliers and identify three to five who can propose a solution for the budget you have set. Sources of information include:

• the internet, including the suppliers' own websites as well as independent sites
• recommendations from trusted colleagues
• recommendations from trading and business partners
• IT seminars and conferences
• computer trade magazines
• advice from relevant trade associations and professional bodies
• IT exhibitions

Step 3: Contact potential suppliers

After identifying the potential suppliers, send them either a request for proposal (RFP) or a request for quotation (RFQ).

Request for proposal

The RFP asks for suppliers to submit formal proposals. It should include:

• the agreed statement of requirements
• an indication of what format the proposal should follow
• an indication of the level of detail required in the proposal
• the timescales within which the proposal should be submitted
• the procedure for suppliers to request further information, if needed

Request for quotation

The RFQ asks potential suppliers to provide a cost for the desired product or service. You send solicitations to possible suppliers with your list of requirements, for example:

• part descriptions, specifications or numbers
• quantities or volumes
• a description or drawings of the product needed
• personnel skills or competencies for the product or service
• terms and conditions
• term of the contract
• any other value-added requirements or terms
• delivery requirements
• a draft contract

After you send requests and receive responses from interested parties, you will have to shortlist the candidates. Often, at this stage, you can ask them to provide presentations or demonstrations of their products and services to help with the final selection. See questions to ask a potential IT supplier.

To continue the selection process, you will then have to evaluate IT supplier proposals.

A new IT system can be a significant investment, so it's essential to choose the right supplier to provide it. As part of your IT supplier selection, you should interview prospective suppliers to help you assess how well they might suit your brief, and how comfortable your working relationship might be.

Here are some key questions to help you get the insight you need to choose the best IT supplier for your business.

• Will they provide all the hardware, software, licences, services, support and maintenance you need?
• Will they use subcontractors for any part of the supply (eg installation, cabling or manning a helpdesk)? If they do, make sure the subcontractors have the right kind of expertise for your system.
• Will they install and configure your system so it's fully operational?
• Will they train your staff?
• What frontline support they can provide - eg a telephone helpdesk?
• Will they take responsibility for system components purchased elsewhere?
• What sort of maintenance contracts do they provide?
• What exactly is included in their supply contract?
• What sort of warranty do they provide?
• Will they continue to provide support if you take responsibility for replacing faulty hardware yourself?
• Will they accept payment for the system only when it is installed and working to your satisfaction?
• What is and isn't included in the price - are upgrades and fixes to the software included?
• Can they provide references from other, similar companies they've helped in the past?
• Will they provide you with written documentation, such as training manuals, that will help you understand your system?
• How well do they understand your business needs?
• Do they have previous experience in your industry?
• Are they happy for you to test the proposed system, perhaps under a non-disclosure agreement?
• Are they financially viable and able to meet your requirements in the foreseeable future?

See also how to evaluate IT supplier proposals or read more about choosing the right suppliers.

After soliciting proposals from a number of IT suppliers, and receiving their responses, you will be able to shortlist, evaluate and choose a supplier.

When looking at their proposals, assess them against your IT supplier selection criteria. It might help to follow a systematic supplier selection process in deciding which supplier would best suit your needs.

STEP 1: Review the proposals

Compare proposals on a like-for-like basis and come up with a shortlist. Take into account:

• financial viability
• implementation track record
• quality and relevance of reference sites
• project management capability
• ability to understand your business at both the strategic and process levels
• technical knowledge and expertise
• confidence in the supplier's ability to provide the solution into the foreseeable future
• the cost of the proposed solution

STEP 2: Rank the candidates

Throughout the evaluation process, rank the suppliers and eliminate those that do not meet your technical requirements or fall outside your agreed budget.

This process should usually include a demonstration of their proposed offering by each of the suppliers. This gives you the opportunity to evaluate the system being proposed and the supplier.

STEP 3: Get to know them

Invite potential suppliers to visit your company. Do they understand your business needs and have experience in your industry? Do you feel comfortable dealing with them? Arrange a supplier interview and make sure to ask them key questions to help you assess the suitability and efficiency of their service.

Ensure that the shortlisted suppliers provide references and contact them as part of the evaluation process. Try to get references from businesses similar to your own as this is a useful way to assess the system and the supplier.

STEP 4: Test the solution

By this stage, you should be in a position to come up with a single preferred supplier. Consider further testing the proposed solution, particularly if the system is going to be critical to your business.

If you are happy with the proposed solution of the preferred supplier, you can begin negotiating the IT contract. You will need to formally agree on factors such as the levels of system maintenance and support, as well as the overall cost of the proposed solution.

See more on IT supplier contracts and service level agreements.

Once your new IT system is up and running, it is important to maintain it regularly to ensure optimum performance.

You will usually be able to undertake most of the basic IT maintenance tasks in-house, such as archiving or deleting old files and freeing up space on your hard drive. Tasks that are more complex may be better managed through an IT system contract.

System maintenance contracts

There are many different types of system maintenance contracts. Two main types are:

• on-site contracts - where an engineer comes to your premises to fix the problem
• return-to-depot contracts - where you need to return the equipment for repair

Maintenance contract costs vary considerably depending on the minimum response time and working hours you need. They may seem expensive, particularly for standard PCs and peripherals with extended on-site warranties.

After assessing the risks, you may decide not to get a maintenance contract and simply hold spares or purchase new parts when necessary. Keep in mind that some suppliers may be reluctant to offer helpdesk, software support and other services unless they're also maintaining the hardware.

Hardware maintenance contracts

Your IT supplier can offer you a range of hardware maintenance contracts - perhaps as part of an overall support contract. This can include tasks such as:

• annual servicing
• repairs
• technical troubleshooting
• warranty upgrades

Hardware failure, theft or damage are major risks to any business. System maintenance is an essential part of managing these risks. Many IT suppliers can monitor problems remotely and take action to prevent a system failure. See computer hardware for business.

Software maintenance contracts

Many IT suppliers offer software maintenance contracts when you purchase their software products. These can include:

• recurring licensing fees
• product upgrades
• new versions
• patches and bug fixes

Some suppliers charge for these, while others will include them free with your purchase. You should also look for a supplier who gives you the original disks and licences if your software comes pre-installed. Read about computer software for business.

If you don't have in-house experience, then look for a supplier that offers maintenance. Costs will vary depending on the type of software you're using, but the general rule of thumb is to have costs below 15 per cent of the purchase price.

If using cloud computing, maintenance and other upgrades will be managed 'off-site' by the service provider.

System management is usually the biggest cost over the lifetime of an IT system. It includes installation, upgrades, expansion, maintenance, support, training and the time your staff spend dealing with system problems.

It's essential to consider full system lifecycle costs. Saving on purchase costs could result in significant additional costs on an ongoing basis, while cutting back on services could waste a fortune in staff time or lost business.

Initial IT set up costs

Initial costs could include:

• consultancy
• hardware costs
• software licence fees
• software configuration and customisation work
• installation
• staff training
• providing the necessary infrastructure, such as network cabling or an electricity supply
• compliance with health and safety law relating to computer use

Ongoing IT maintenance costs

Ongoing management costs could include:

• software support contracts - fees for licence renewals and upgrades
• hardware upgrades
• expansion of memory, disk size, communications capacity
• support - telephone, email, online, on-site
• maintenance and replacements
• compliance with health and safety legislation relating to computer use
• staff training
• costs of consumables, such as printer cartridges, ink and paper
• communications charges - telephone costs, internet access and subscription charges

Agreeing an IT budget and contract with a supplier could take time. Specify every aspect of the project in as much detail as possible. This will help to control costs and highlight any problems you encounter during the project.

When you negotiate a contract for IT systems or services, your supplier will usually expect payment upon delivery of the system. However, it is worthwhile seeking to extend the payment period until the system is actually installed and you're happy with how it works.

See how to negotiate IT supplier contracts and service level agreements.

Technology can fail in any business, regardless of how big or small it is. To safeguard your systems, you should think about having some level of IT support in place.

Start by considering carefully how much technical support you need. This depends on how much IT expertise you have in-house, how important it is to keep systems running smoothly, and how much you can sensibly afford for a support contract.

Types of IT support contracts and services

Support services that could benefit your business include:

• set up tasks, such as installation and configuration
• staff training and upskilling
• remote monitoring and management, enabling rapid response to errors and failures
• telephone, email or online support
• guaranteed response times, as part of supplier SLA, reducing downtime and revenue loss
• on-site support
• IT asset management and inventory
• security management, including software patches, virus protection, and storage and backup task

Importance of IT support for your business

Running a business relies heavily on IT systems. Because of this, problems and issues with IT systems can cause significant difficulties for your business, including:

• data loss
• data storage and processing
• service interruption
• business interruption
• cyber attacks

Having a dedicated IT support service in place means that you have access to highly specialised talent and resources as and when you need them.

You should weigh this against the costs of procuring such service to determine the real benefits to your business. See IT system cost evaluation.

When entering a contract with your IT supplier, make sure that the terms and conditions are fair to you both. Once you enter into an agreement, document the terms of your engagement in a written contract.

Be completely clear about what the contract with your supplier includes. Hidden extras can be expensive.

Things to consider before signing an IT service contract

Check if you'll receive:

• on-site service calls - a certain number may be included or charged at a reduced rate
• preventative maintenance, eg using anti-virus software and firewalls to protect your system
• remote monitoring and diagnosis - if included, check if you need any extra equipment or communication links
• telephone support - check if any limits apply
• warranties - check what warranties, if any, are included
• software upgrades - check if upgrades are free, or if you have to pay a subscription or licences for new versions
• software support - check if you can report problems and receive help, patches and bug fixes
• user training - a limited amount of training may be included in the system's purchase price, but some suppliers will charge extra
• manuals - you may need them if you terminate your supplier contract

IT service level agreements (SLAs)

When buying IT services, draw up a service level agreement with the supplier to specify exactly what you expect from them. A typical SLA should cover:

• scope - details of the hardware and software that is to be covered
• the range of services - what the supplier will be required to provide
• service availability - when the service should be available
• response times - usually the faster the response times, the greater the cost
• escalation procedures - the ability to intensify the response to problems, eg move from off-site diagnosis to on-site support
• record-keeping - ways to document problems and solutions, and keep records for dispute resolution
• performance review - to maintain acceptable levels of service over time
• supplier obligations - such as providing spare parts, the qualifications of support staff and the need to meet response times
• customer obligations - your responsibilities, eg informing the supplier about changes that affect the scope of the contract, and the cooperation of staff with the supplier
• termination of agreement - a formal process that defines how the contract may be terminated

For more tips on agreeing supplier contracts, see how to negotiate supplier contracts.

Building a successful relationship with your IT supplier is essential to your system's success.

Trying to buy IT systems and services at the lowest possible cost - with no regard to your business goals or the overall cost of ownership - is likely to lead to a strained relationship with your supplier. This can cause both system and business problems.

Advantages of a good supplier relationship

Ideally, your supplier should have a clear view of your business goals and the role of IT in achieving these. This will help you build a relationship that can deliver a number of benefits including:

• ensure that service level agreements are met and that system availability is high
• speedy resolution of problems or queries
• valuable guidance from the supplier on your business' future IT direction through their knowledge of your industry sector and the latest IT developments
• delivery of the anticipated business benefits

Tips for effective supplier relationship

To build a successful relationship with any IT supplier you should be clear from the outset about what you both expect from the arrangement. Make sure:

• you both have clear expectations of exactly what you'll get in terms of hardware, software and services
• the business relationship is mutually beneficial - your supplier will have no interest in whether you achieve your business goals if you just want goods as cheaply as possible
• there are specific targets to be reached at set dates representing what your business gets out of its IT systems - not the delivery of boxes and cables
• the supplier provides regular reports of progress towards the agreed business objectives for the system
• you hold regular reviews with your supplier to see how things are going
• you have enough flexibility to accommodate change - whether this is through new technologies, the business environment or refined business goals
• you have a signed contract that you both agree to, that includes details of each party's obligations and what should happen in the event of a disagreement or dispute

Find out more about how to manage your suppliers.

Most IT suppliers can provide a broad range of hardware, software and services, although there may be some differences between them. For example:

• Manufacturers sell their own products and generally offer a basic level of service. This may suit you if you're confident that you don't need advice and simply need someone to supply the IT system.
• Resellers act as agents for hardware manufacturers. Some also offer software and a wide range of IT services and support.
• System integrators select the appropriate hardware and software for your specific needs and deliver an integrated, working system.
• Specialist suppliers have expertise in one specific area, such as customer relationship management systems.
• IT consultants usually provide consultancy tailored to your needs. They also sell services like IT set up and installation rather than equipment or maintenance.

How to identify potential IT suppliers?

You should consider several factors when deciding what type of IT supplier to use. These include:

• your IT budget
• your IT requirements, eg if you need equipment, services or both
• the desired level of service
• existing in-house IT skills, or the lack of
• the type of business relationship you hope to establish with the supplier
• the size and location of the supplier
• their previous experience and performance with the products/services you wish to buy
• their ability to provide systems, services and consultancy to businesses such as yours
• their technical support track-record and availability

See how to find potential IT suppliers and evaluate their proposals.

Advantages of consolidating your technology suppliers

Unless you have IT expertise in-house, it's generally best to consolidate your technology suppliers. This means using a single supplier for all hardware, software, services and support.

Consolidating your suppliers can sometimes:

• save you money and reduce your purchasing and procurement costs
• enable more efficient business processes and service delivery
• help you leverage consolidated spend and negotiate a lower price
• improve relations with a supplier due to their vested interest in your business' success
• minimise the risk of failure of business-critical services

If you buy from multiple suppliers, you'll have to decide which one is responsible when there's a problem - unless you have a service provider prepared to support your whole system.

See more on IT supplier contracts and service level agreements.

IT supplier selection process involves everything from doing market research and negotiating pricing, to establishing terms and conditions of services. It usually starts with specifying your IT requirements.

Step 1: Decide on your IT requirements

Before you buy any IT equipment or service, set your requirements and document them in detail. Define the products, equipment or services you need, and explain why you need them. Decide which requirements are essential and which are optional. Give potential suppliers your requirements document. This will provide a framework to compare the different quotations you may receive.

Step 2: Research IT solutions and suppliers

After setting your requirements, research your options. Compile a list of possible suppliers and identify three to five who can propose a solution for the budget you have set. Sources of information include:

• the internet, including the suppliers' own websites as well as independent sites
• recommendations from trusted colleagues
• recommendations from trading and business partners
• IT seminars and conferences
• computer trade magazines
• advice from relevant trade associations and professional bodies
• IT exhibitions

Step 3: Contact potential suppliers

After identifying the potential suppliers, send them either a request for proposal (RFP) or a request for quotation (RFQ).

Request for proposal

The RFP asks for suppliers to submit formal proposals. It should include:

• the agreed statement of requirements
• an indication of what format the proposal should follow
• an indication of the level of detail required in the proposal
• the timescales within which the proposal should be submitted
• the procedure for suppliers to request further information, if needed

Request for quotation

The RFQ asks potential suppliers to provide a cost for the desired product or service. You send solicitations to possible suppliers with your list of requirements, for example:

• part descriptions, specifications or numbers
• quantities or volumes
• a description or drawings of the product needed
• personnel skills or competencies for the product or service
• terms and conditions
• term of the contract
• any other value-added requirements or terms
• delivery requirements
• a draft contract

After you send requests and receive responses from interested parties, you will have to shortlist the candidates. Often, at this stage, you can ask them to provide presentations or demonstrations of their products and services to help with the final selection. See questions to ask a potential IT supplier.

To continue the selection process, you will then have to evaluate IT supplier proposals.

A new IT system can be a significant investment, so it's essential to choose the right supplier to provide it. As part of your IT supplier selection, you should interview prospective suppliers to help you assess how well they might suit your brief, and how comfortable your working relationship might be.

Here are some key questions to help you get the insight you need to choose the best IT supplier for your business.

• Will they provide all the hardware, software, licences, services, support and maintenance you need?
• Will they use subcontractors for any part of the supply (eg installation, cabling or manning a helpdesk)? If they do, make sure the subcontractors have the right kind of expertise for your system.
• Will they install and configure your system so it's fully operational?
• Will they train your staff?
• What frontline support they can provide - eg a telephone helpdesk?
• Will they take responsibility for system components purchased elsewhere?
• What sort of maintenance contracts do they provide?
• What exactly is included in their supply contract?
• What sort of warranty do they provide?
• Will they continue to provide support if you take responsibility for replacing faulty hardware yourself?
• Will they accept payment for the system only when it is installed and working to your satisfaction?
• What is and isn't included in the price - are upgrades and fixes to the software included?
• Can they provide references from other, similar companies they've helped in the past?
• Will they provide you with written documentation, such as training manuals, that will help you understand your system?
• How well do they understand your business needs?
• Do they have previous experience in your industry?
• Are they happy for you to test the proposed system, perhaps under a non-disclosure agreement?
• Are they financially viable and able to meet your requirements in the foreseeable future?

See also how to evaluate IT supplier proposals or read more about choosing the right suppliers.

After soliciting proposals from a number of IT suppliers, and receiving their responses, you will be able to shortlist, evaluate and choose a supplier.

When looking at their proposals, assess them against your IT supplier selection criteria. It might help to follow a systematic supplier selection process in deciding which supplier would best suit your needs.

STEP 1: Review the proposals

Compare proposals on a like-for-like basis and come up with a shortlist. Take into account:

• financial viability
• implementation track record
• quality and relevance of reference sites
• project management capability
• ability to understand your business at both the strategic and process levels
• technical knowledge and expertise
• confidence in the supplier's ability to provide the solution into the foreseeable future
• the cost of the proposed solution

STEP 2: Rank the candidates

Throughout the evaluation process, rank the suppliers and eliminate those that do not meet your technical requirements or fall outside your agreed budget.

This process should usually include a demonstration of their proposed offering by each of the suppliers. This gives you the opportunity to evaluate the system being proposed and the supplier.

STEP 3: Get to know them

Invite potential suppliers to visit your company. Do they understand your business needs and have experience in your industry? Do you feel comfortable dealing with them? Arrange a supplier interview and make sure to ask them key questions to help you assess the suitability and efficiency of their service.

Ensure that the shortlisted suppliers provide references and contact them as part of the evaluation process. Try to get references from businesses similar to your own as this is a useful way to assess the system and the supplier.

STEP 4: Test the solution

By this stage, you should be in a position to come up with a single preferred supplier. Consider further testing the proposed solution, particularly if the system is going to be critical to your business.

If you are happy with the proposed solution of the preferred supplier, you can begin negotiating the IT contract. You will need to formally agree on factors such as the levels of system maintenance and support, as well as the overall cost of the proposed solution.

See more on IT supplier contracts and service level agreements.

Once your new IT system is up and running, it is important to maintain it regularly to ensure optimum performance.

You will usually be able to undertake most of the basic IT maintenance tasks in-house, such as archiving or deleting old files and freeing up space on your hard drive. Tasks that are more complex may be better managed through an IT system contract.

System maintenance contracts

There are many different types of system maintenance contracts. Two main types are:

• on-site contracts - where an engineer comes to your premises to fix the problem
• return-to-depot contracts - where you need to return the equipment for repair

Maintenance contract costs vary considerably depending on the minimum response time and working hours you need. They may seem expensive, particularly for standard PCs and peripherals with extended on-site warranties.

After assessing the risks, you may decide not to get a maintenance contract and simply hold spares or purchase new parts when necessary. Keep in mind that some suppliers may be reluctant to offer helpdesk, software support and other services unless they're also maintaining the hardware.

Hardware maintenance contracts

Your IT supplier can offer you a range of hardware maintenance contracts - perhaps as part of an overall support contract. This can include tasks such as:

• annual servicing
• repairs
• technical troubleshooting
• warranty upgrades

Hardware failure, theft or damage are major risks to any business. System maintenance is an essential part of managing these risks. Many IT suppliers can monitor problems remotely and take action to prevent a system failure. See computer hardware for business.

Software maintenance contracts

Many IT suppliers offer software maintenance contracts when you purchase their software products. These can include:

• recurring licensing fees
• product upgrades
• new versions
• patches and bug fixes

Some suppliers charge for these, while others will include them free with your purchase. You should also look for a supplier who gives you the original disks and licences if your software comes pre-installed. Read about computer software for business.

If you don't have in-house experience, then look for a supplier that offers maintenance. Costs will vary depending on the type of software you're using, but the general rule of thumb is to have costs below 15 per cent of the purchase price.

If using cloud computing, maintenance and other upgrades will be managed 'off-site' by the service provider.

System management is usually the biggest cost over the lifetime of an IT system. It includes installation, upgrades, expansion, maintenance, support, training and the time your staff spend dealing with system problems.

It's essential to consider full system lifecycle costs. Saving on purchase costs could result in significant additional costs on an ongoing basis, while cutting back on services could waste a fortune in staff time or lost business.

Initial IT set up costs

Initial costs could include:

• consultancy
• hardware costs
• software licence fees
• software configuration and customisation work
• installation
• staff training
• providing the necessary infrastructure, such as network cabling or an electricity supply
• compliance with health and safety law relating to computer use

Ongoing IT maintenance costs

Ongoing management costs could include:

• software support contracts - fees for licence renewals and upgrades
• hardware upgrades
• expansion of memory, disk size, communications capacity
• support - telephone, email, online, on-site
• maintenance and replacements
• compliance with health and safety legislation relating to computer use
• staff training
• costs of consumables, such as printer cartridges, ink and paper
• communications charges - telephone costs, internet access and subscription charges

Agreeing an IT budget and contract with a supplier could take time. Specify every aspect of the project in as much detail as possible. This will help to control costs and highlight any problems you encounter during the project.

When you negotiate a contract for IT systems or services, your supplier will usually expect payment upon delivery of the system. However, it is worthwhile seeking to extend the payment period until the system is actually installed and you're happy with how it works.

See how to negotiate IT supplier contracts and service level agreements.

Technology can fail in any business, regardless of how big or small it is. To safeguard your systems, you should think about having some level of IT support in place.

Start by considering carefully how much technical support you need. This depends on how much IT expertise you have in-house, how important it is to keep systems running smoothly, and how much you can sensibly afford for a support contract.

Types of IT support contracts and services

Support services that could benefit your business include:

• set up tasks, such as installation and configuration
• staff training and upskilling
• remote monitoring and management, enabling rapid response to errors and failures
• telephone, email or online support
• guaranteed response times, as part of supplier SLA, reducing downtime and revenue loss
• on-site support
• IT asset management and inventory
• security management, including software patches, virus protection, and storage and backup task

Importance of IT support for your business

Running a business relies heavily on IT systems. Because of this, problems and issues with IT systems can cause significant difficulties for your business, including:

• data loss
• data storage and processing
• service interruption
• business interruption
• cyber attacks

Having a dedicated IT support service in place means that you have access to highly specialised talent and resources as and when you need them.

You should weigh this against the costs of procuring such service to determine the real benefits to your business. See IT system cost evaluation.

When entering a contract with your IT supplier, make sure that the terms and conditions are fair to you both. Once you enter into an agreement, document the terms of your engagement in a written contract.

Be completely clear about what the contract with your supplier includes. Hidden extras can be expensive.

Things to consider before signing an IT service contract

Check if you'll receive:

• on-site service calls - a certain number may be included or charged at a reduced rate
• preventative maintenance, eg using anti-virus software and firewalls to protect your system
• remote monitoring and diagnosis - if included, check if you need any extra equipment or communication links
• telephone support - check if any limits apply
• warranties - check what warranties, if any, are included
• software upgrades - check if upgrades are free, or if you have to pay a subscription or licences for new versions
• software support - check if you can report problems and receive help, patches and bug fixes
• user training - a limited amount of training may be included in the system's purchase price, but some suppliers will charge extra
• manuals - you may need them if you terminate your supplier contract

IT service level agreements (SLAs)

When buying IT services, draw up a service level agreement with the supplier to specify exactly what you expect from them. A typical SLA should cover:

• scope - details of the hardware and software that is to be covered
• the range of services - what the supplier will be required to provide
• service availability - when the service should be available
• response times - usually the faster the response times, the greater the cost
• escalation procedures - the ability to intensify the response to problems, eg move from off-site diagnosis to on-site support
• record-keeping - ways to document problems and solutions, and keep records for dispute resolution
• performance review - to maintain acceptable levels of service over time
• supplier obligations - such as providing spare parts, the qualifications of support staff and the need to meet response times
• customer obligations - your responsibilities, eg informing the supplier about changes that affect the scope of the contract, and the cooperation of staff with the supplier
• termination of agreement - a formal process that defines how the contract may be terminated

For more tips on agreeing supplier contracts, see how to negotiate supplier contracts.

Building a successful relationship with your IT supplier is essential to your system's success.

Trying to buy IT systems and services at the lowest possible cost - with no regard to your business goals or the overall cost of ownership - is likely to lead to a strained relationship with your supplier. This can cause both system and business problems.

Advantages of a good supplier relationship

Ideally, your supplier should have a clear view of your business goals and the role of IT in achieving these. This will help you build a relationship that can deliver a number of benefits including:

• ensure that service level agreements are met and that system availability is high
• speedy resolution of problems or queries
• valuable guidance from the supplier on your business' future IT direction through their knowledge of your industry sector and the latest IT developments
• delivery of the anticipated business benefits

Tips for effective supplier relationship

To build a successful relationship with any IT supplier you should be clear from the outset about what you both expect from the arrangement. Make sure:

• you both have clear expectations of exactly what you'll get in terms of hardware, software and services
• the business relationship is mutually beneficial - your supplier will have no interest in whether you achieve your business goals if you just want goods as cheaply as possible
• there are specific targets to be reached at set dates representing what your business gets out of its IT systems - not the delivery of boxes and cables
• the supplier provides regular reports of progress towards the agreed business objectives for the system
• you hold regular reviews with your supplier to see how things are going
• you have enough flexibility to accommodate change - whether this is through new technologies, the business environment or refined business goals
• you have a signed contract that you both agree to, that includes details of each party's obligations and what should happen in the event of a disagreement or dispute

Find out more about how to manage your suppliers.

Most IT suppliers can provide a broad range of hardware, software and services, although there may be some differences between them. For example:

• Manufacturers sell their own products and generally offer a basic level of service. This may suit you if you're confident that you don't need advice and simply need someone to supply the IT system.
• Resellers act as agents for hardware manufacturers. Some also offer software and a wide range of IT services and support.
• System integrators select the appropriate hardware and software for your specific needs and deliver an integrated, working system.
• Specialist suppliers have expertise in one specific area, such as customer relationship management systems.
• IT consultants usually provide consultancy tailored to your needs. They also sell services like IT set up and installation rather than equipment or maintenance.

How to identify potential IT suppliers?

You should consider several factors when deciding what type of IT supplier to use. These include:

• your IT budget
• your IT requirements, eg if you need equipment, services or both
• the desired level of service
• existing in-house IT skills, or the lack of
• the type of business relationship you hope to establish with the supplier
• the size and location of the supplier
• their previous experience and performance with the products/services you wish to buy
• their ability to provide systems, services and consultancy to businesses such as yours
• their technical support track-record and availability

See how to find potential IT suppliers and evaluate their proposals.

Advantages of consolidating your technology suppliers

Unless you have IT expertise in-house, it's generally best to consolidate your technology suppliers. This means using a single supplier for all hardware, software, services and support.

Consolidating your suppliers can sometimes:

• save you money and reduce your purchasing and procurement costs
• enable more efficient business processes and service delivery
• help you leverage consolidated spend and negotiate a lower price
• improve relations with a supplier due to their vested interest in your business' success
• minimise the risk of failure of business-critical services

If you buy from multiple suppliers, you'll have to decide which one is responsible when there's a problem - unless you have a service provider prepared to support your whole system.

See more on IT supplier contracts and service level agreements.

IT supplier selection process involves everything from doing market research and negotiating pricing, to establishing terms and conditions of services. It usually starts with specifying your IT requirements.

Step 1: Decide on your IT requirements

Before you buy any IT equipment or service, set your requirements and document them in detail. Define the products, equipment or services you need, and explain why you need them. Decide which requirements are essential and which are optional. Give potential suppliers your requirements document. This will provide a framework to compare the different quotations you may receive.

Step 2: Research IT solutions and suppliers

After setting your requirements, research your options. Compile a list of possible suppliers and identify three to five who can propose a solution for the budget you have set. Sources of information include:

• the internet, including the suppliers' own websites as well as independent sites
• recommendations from trusted colleagues
• recommendations from trading and business partners
• IT seminars and conferences
• computer trade magazines
• advice from relevant trade associations and professional bodies
• IT exhibitions

Step 3: Contact potential suppliers

After identifying the potential suppliers, send them either a request for proposal (RFP) or a request for quotation (RFQ).

Request for proposal

The RFP asks for suppliers to submit formal proposals. It should include:

• the agreed statement of requirements
• an indication of what format the proposal should follow
• an indication of the level of detail required in the proposal
• the timescales within which the proposal should be submitted
• the procedure for suppliers to request further information, if needed

Request for quotation

The RFQ asks potential suppliers to provide a cost for the desired product or service. You send solicitations to possible suppliers with your list of requirements, for example:

• part descriptions, specifications or numbers
• quantities or volumes
• a description or drawings of the product needed
• personnel skills or competencies for the product or service
• terms and conditions
• term of the contract
• any other value-added requirements or terms
• delivery requirements
• a draft contract

After you send requests and receive responses from interested parties, you will have to shortlist the candidates. Often, at this stage, you can ask them to provide presentations or demonstrations of their products and services to help with the final selection. See questions to ask a potential IT supplier.

To continue the selection process, you will then have to evaluate IT supplier proposals.

A new IT system can be a significant investment, so it's essential to choose the right supplier to provide it. As part of your IT supplier selection, you should interview prospective suppliers to help you assess how well they might suit your brief, and how comfortable your working relationship might be.

Here are some key questions to help you get the insight you need to choose the best IT supplier for your business.

• Will they provide all the hardware, software, licences, services, support and maintenance you need?
• Will they use subcontractors for any part of the supply (eg installation, cabling or manning a helpdesk)? If they do, make sure the subcontractors have the right kind of expertise for your system.
• Will they install and configure your system so it's fully operational?
• Will they train your staff?
• What frontline support they can provide - eg a telephone helpdesk?
• Will they take responsibility for system components purchased elsewhere?
• What sort of maintenance contracts do they provide?
• What exactly is included in their supply contract?
• What sort of warranty do they provide?
• Will they continue to provide support if you take responsibility for replacing faulty hardware yourself?
• Will they accept payment for the system only when it is installed and working to your satisfaction?
• What is and isn't included in the price - are upgrades and fixes to the software included?
• Can they provide references from other, similar companies they've helped in the past?
• Will they provide you with written documentation, such as training manuals, that will help you understand your system?
• How well do they understand your business needs?
• Do they have previous experience in your industry?
• Are they happy for you to test the proposed system, perhaps under a non-disclosure agreement?
• Are they financially viable and able to meet your requirements in the foreseeable future?

See also how to evaluate IT supplier proposals or read more about choosing the right suppliers.

After soliciting proposals from a number of IT suppliers, and receiving their responses, you will be able to shortlist, evaluate and choose a supplier.

When looking at their proposals, assess them against your IT supplier selection criteria. It might help to follow a systematic supplier selection process in deciding which supplier would best suit your needs.

STEP 1: Review the proposals

Compare proposals on a like-for-like basis and come up with a shortlist. Take into account:

• financial viability
• implementation track record
• quality and relevance of reference sites
• project management capability
• ability to understand your business at both the strategic and process levels
• technical knowledge and expertise
• confidence in the supplier's ability to provide the solution into the foreseeable future
• the cost of the proposed solution

STEP 2: Rank the candidates

Throughout the evaluation process, rank the suppliers and eliminate those that do not meet your technical requirements or fall outside your agreed budget.

This process should usually include a demonstration of their proposed offering by each of the suppliers. This gives you the opportunity to evaluate the system being proposed and the supplier.

STEP 3: Get to know them

Invite potential suppliers to visit your company. Do they understand your business needs and have experience in your industry? Do you feel comfortable dealing with them? Arrange a supplier interview and make sure to ask them key questions to help you assess the suitability and efficiency of their service.

Ensure that the shortlisted suppliers provide references and contact them as part of the evaluation process. Try to get references from businesses similar to your own as this is a useful way to assess the system and the supplier.

STEP 4: Test the solution

By this stage, you should be in a position to come up with a single preferred supplier. Consider further testing the proposed solution, particularly if the system is going to be critical to your business.

If you are happy with the proposed solution of the preferred supplier, you can begin negotiating the IT contract. You will need to formally agree on factors such as the levels of system maintenance and support, as well as the overall cost of the proposed solution.

See more on IT supplier contracts and service level agreements.

Once your new IT system is up and running, it is important to maintain it regularly to ensure optimum performance.

You will usually be able to undertake most of the basic IT maintenance tasks in-house, such as archiving or deleting old files and freeing up space on your hard drive. Tasks that are more complex may be better managed through an IT system contract.

System maintenance contracts

There are many different types of system maintenance contracts. Two main types are:

• on-site contracts - where an engineer comes to your premises to fix the problem
• return-to-depot contracts - where you need to return the equipment for repair

Maintenance contract costs vary considerably depending on the minimum response time and working hours you need. They may seem expensive, particularly for standard PCs and peripherals with extended on-site warranties.

After assessing the risks, you may decide not to get a maintenance contract and simply hold spares or purchase new parts when necessary. Keep in mind that some suppliers may be reluctant to offer helpdesk, software support and other services unless they're also maintaining the hardware.

Hardware maintenance contracts

Your IT supplier can offer you a range of hardware maintenance contracts - perhaps as part of an overall support contract. This can include tasks such as:

• annual servicing
• repairs
• technical troubleshooting
• warranty upgrades

Hardware failure, theft or damage are major risks to any business. System maintenance is an essential part of managing these risks. Many IT suppliers can monitor problems remotely and take action to prevent a system failure. See computer hardware for business.

Software maintenance contracts

Many IT suppliers offer software maintenance contracts when you purchase their software products. These can include:

• recurring licensing fees
• product upgrades
• new versions
• patches and bug fixes

Some suppliers charge for these, while others will include them free with your purchase. You should also look for a supplier who gives you the original disks and licences if your software comes pre-installed. Read about computer software for business.

If you don't have in-house experience, then look for a supplier that offers maintenance. Costs will vary depending on the type of software you're using, but the general rule of thumb is to have costs below 15 per cent of the purchase price.

If using cloud computing, maintenance and other upgrades will be managed 'off-site' by the service provider.

System management is usually the biggest cost over the lifetime of an IT system. It includes installation, upgrades, expansion, maintenance, support, training and the time your staff spend dealing with system problems.

It's essential to consider full system lifecycle costs. Saving on purchase costs could result in significant additional costs on an ongoing basis, while cutting back on services could waste a fortune in staff time or lost business.

Initial IT set up costs

Initial costs could include:

• consultancy
• hardware costs
• software licence fees
• software configuration and customisation work
• installation
• staff training
• providing the necessary infrastructure, such as network cabling or an electricity supply
• compliance with health and safety law relating to computer use

Ongoing IT maintenance costs

Ongoing management costs could include:

• software support contracts - fees for licence renewals and upgrades
• hardware upgrades
• expansion of memory, disk size, communications capacity
• support - telephone, email, online, on-site
• maintenance and replacements
• compliance with health and safety legislation relating to computer use
• staff training
• costs of consumables, such as printer cartridges, ink and paper
• communications charges - telephone costs, internet access and subscription charges

Agreeing an IT budget and contract with a supplier could take time. Specify every aspect of the project in as much detail as possible. This will help to control costs and highlight any problems you encounter during the project.

When you negotiate a contract for IT systems or services, your supplier will usually expect payment upon delivery of the system. However, it is worthwhile seeking to extend the payment period until the system is actually installed and you're happy with how it works.

See how to negotiate IT supplier contracts and service level agreements.

Technology can fail in any business, regardless of how big or small it is. To safeguard your systems, you should think about having some level of IT support in place.

Start by considering carefully how much technical support you need. This depends on how much IT expertise you have in-house, how important it is to keep systems running smoothly, and how much you can sensibly afford for a support contract.

Types of IT support contracts and services

Support services that could benefit your business include:

• set up tasks, such as installation and configuration
• staff training and upskilling
• remote monitoring and management, enabling rapid response to errors and failures
• telephone, email or online support
• guaranteed response times, as part of supplier SLA, reducing downtime and revenue loss
• on-site support
• IT asset management and inventory
• security management, including software patches, virus protection, and storage and backup task

Importance of IT support for your business

Running a business relies heavily on IT systems. Because of this, problems and issues with IT systems can cause significant difficulties for your business, including:

• data loss
• data storage and processing
• service interruption
• business interruption
• cyber attacks

Having a dedicated IT support service in place means that you have access to highly specialised talent and resources as and when you need them.

You should weigh this against the costs of procuring such service to determine the real benefits to your business. See IT system cost evaluation.

When entering a contract with your IT supplier, make sure that the terms and conditions are fair to you both. Once you enter into an agreement, document the terms of your engagement in a written contract.

Be completely clear about what the contract with your supplier includes. Hidden extras can be expensive.

Things to consider before signing an IT service contract

Check if you'll receive:

• on-site service calls - a certain number may be included or charged at a reduced rate
• preventative maintenance, eg using anti-virus software and firewalls to protect your system
• remote monitoring and diagnosis - if included, check if you need any extra equipment or communication links
• telephone support - check if any limits apply
• warranties - check what warranties, if any, are included
• software upgrades - check if upgrades are free, or if you have to pay a subscription or licences for new versions
• software support - check if you can report problems and receive help, patches and bug fixes
• user training - a limited amount of training may be included in the system's purchase price, but some suppliers will charge extra
• manuals - you may need them if you terminate your supplier contract

IT service level agreements (SLAs)

When buying IT services, draw up a service level agreement with the supplier to specify exactly what you expect from them. A typical SLA should cover:

• scope - details of the hardware and software that is to be covered
• the range of services - what the supplier will be required to provide
• service availability - when the service should be available
• response times - usually the faster the response times, the greater the cost
• escalation procedures - the ability to intensify the response to problems, eg move from off-site diagnosis to on-site support
• record-keeping - ways to document problems and solutions, and keep records for dispute resolution
• performance review - to maintain acceptable levels of service over time
• supplier obligations - such as providing spare parts, the qualifications of support staff and the need to meet response times
• customer obligations - your responsibilities, eg informing the supplier about changes that affect the scope of the contract, and the cooperation of staff with the supplier
• termination of agreement - a formal process that defines how the contract may be terminated

For more tips on agreeing supplier contracts, see how to negotiate supplier contracts.

Building a successful relationship with your IT supplier is essential to your system's success.

Trying to buy IT systems and services at the lowest possible cost - with no regard to your business goals or the overall cost of ownership - is likely to lead to a strained relationship with your supplier. This can cause both system and business problems.

Advantages of a good supplier relationship

Ideally, your supplier should have a clear view of your business goals and the role of IT in achieving these. This will help you build a relationship that can deliver a number of benefits including:

• ensure that service level agreements are met and that system availability is high
• speedy resolution of problems or queries
• valuable guidance from the supplier on your business' future IT direction through their knowledge of your industry sector and the latest IT developments
• delivery of the anticipated business benefits

Tips for effective supplier relationship

To build a successful relationship with any IT supplier you should be clear from the outset about what you both expect from the arrangement. Make sure:

• you both have clear expectations of exactly what you'll get in terms of hardware, software and services
• the business relationship is mutually beneficial - your supplier will have no interest in whether you achieve your business goals if you just want goods as cheaply as possible
• there are specific targets to be reached at set dates representing what your business gets out of its IT systems - not the delivery of boxes and cables
• the supplier provides regular reports of progress towards the agreed business objectives for the system
• you hold regular reviews with your supplier to see how things are going
• you have enough flexibility to accommodate change - whether this is through new technologies, the business environment or refined business goals
• you have a signed contract that you both agree to, that includes details of each party's obligations and what should happen in the event of a disagreement or dispute

Find out more about how to manage your suppliers.