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Software and Hardware Procurement Policy

Policy Status: Draft

This policy is currently draft.

Purpose

To standardize the procurement of technology hardware, software, and services, ensuring all acquisitions meet Acme Corp's security standards, compatibility requirements, budgetary constraints, and regulatory compliance while optimizing costs and maintaining vendor accountability.

Scope

This policy covers all technology acquisitions for Acme Corp, including:

Hardware: - End-user devices (computers, laptops, tablets, mobile devices) - Servers and storage equipment - Network equipment (routers, switches, firewalls) - Peripherals and accessories - Audio/visual equipment

Software: - Operating systems and system software - Business applications and productivity software - Development tools and platforms - Security software and tools - Mobile applications - Software licenses and subscriptions

Services: - Cloud services and SaaS subscriptions - Professional services and consulting - Support and maintenance contracts - Managed services - Software development services

Exclusions: This policy does not cover office supplies, furniture, or non-technology equipment.

Policy Statement

Procurement Authorization

All technology procurements must be properly authorized:

Approval Thresholds: - < $500: Department manager approval - $500 - $5,000: IT Team Lead + Department Head approval - $5,000 - $25,000: CTO approval - > $25,000: CTO + CFO approval - New Vendor: CTO approval required regardless of amount - Multi-year Contracts: CTO + CFO approval required

Emergency Purchases: - May bypass normal approval for critical business needs - CTO or designee can authorize up to $10,000 - Full documentation required within 48 hours - Retroactive approval process within 5 business days

Approved Vendors

Technology purchases must use pre-approved vendors when available:

  • Preferred Vendors: Vendors with established contracts and negotiated pricing
  • Approved Vendors: Vendors that have passed security and compliance review
  • New Vendors: Require vendor assessment before use
  • Vendor List: Maintained by IT and Procurement teams, reviewed quarterly

Vendor Approval Requirements: - Security assessment completed - Contract terms reviewed by Legal - Compliance requirements verified (HIPAA, SOC2) - Data protection and privacy commitments - Service level agreements defined - Financial stability verification (for major vendors)

Security and Compliance Requirements

All technology acquisitions must meet security standards:

Hardware Security Requirements: - Support for full disk encryption - Secure boot capabilities - TPM (Trusted Platform Module) for devices storing sensitive data - Regular security updates available from manufacturer - Minimum 3-year warranty and support commitment

Software Security Requirements: - Regular security updates and patches - Authentication and access control capabilities - Data encryption at rest and in transit - Audit logging capabilities - Vendor security certifications (SOC2, ISO 27001) - Privacy policy review and approval - Data processing agreement (DPA) for systems handling sensitive data

Cloud Service Requirements: - SOC2 Type II certification - HIPAA compliance (for systems handling health data) - Data residency in approved regions - Data portability and export capabilities - Backup and disaster recovery capabilities - Clear data retention and deletion policies - Service level agreement (SLA) with >99.5% uptime

Compatibility and Standardization

Procurements must align with existing technology standards:

  • Standard Configurations: Follow approved standard configurations for hardware
  • Operating Systems: Windows 11 Pro or macOS latest for end-user devices
  • Office Suite: Microsoft 365 E3 or equivalent
  • Browsers: Chrome or Edge (current version)
  • Mobile Devices: iOS (latest-1) or Android (latest-1)
  • Integration Requirements: Must integrate with existing systems (Active Directory, SSO, etc.)
  • Exceptions: Require CTO approval with documented justification

Budget and Cost Management

Technology purchases must align with budget:

  • Budget Allocation: All purchases must have approved budget allocation
  • Total Cost of Ownership: Consider licensing, support, training, and maintenance costs
  • Cost Comparison: Obtain quotes from multiple vendors for purchases >$5,000
  • Volume Licensing: Leverage volume licensing and enterprise agreements when cost-effective
  • Annual Review: Review all recurring costs annually for optimization opportunities
  • Unused Licenses: Quarterly review to identify and eliminate unused licenses

Asset Management Integration

All procurements must be tracked:

  • Asset Registration: All hardware and software registered in asset management system within 24 hours of receipt
  • Asset Tagging: Physical asset tags applied before deployment
  • License Tracking: Software licenses documented with purchase details, expiration dates
  • Inventory Integration: Procurement data flows to asset inventory automatically
  • Warranty Tracking: Warranty and support contract details recorded

Roles and Responsibilities

Role Responsibility
Chief Technology Officer Approve IT strategy, major purchases, new vendors; ensure alignment with business needs
Chief Financial Officer Approve budgets, review major expenditures, ensure financial controls
IT Team Lead Evaluate technical requirements, recommend solutions, approve standard purchases
Procurement Manager Manage vendor relationships, negotiate contracts, coordinate purchasing process
IT Team Members Identify technology needs, submit purchase requests, evaluate products
Security Team Review security requirements, assess vendor security posture, approve security tools
Finance Team Process purchase orders, track spending, manage vendor payments
Department Heads Approve purchases for their teams, ensure alignment with department needs
Legal Counsel Review contracts, ensure legal compliance, negotiate terms
Requestor Submit complete purchase request, provide business justification, coordinate receipt

Procedures

Purchase Request Process

1. Identify Need

  1. Requestor identifies technology need
  2. Checks existing inventory for available resources
  3. Consults IT for approved alternatives
  4. Verifies budget availability

2. Research Options

  1. Review approved vendor list
  2. Research compatible products meeting requirements
  3. Obtain quotes from multiple vendors (if >$5,000)
  4. Compare features, pricing, support

3. Submit Request

  1. Complete purchase request form with:
  2. Detailed description of item/service
  3. Business justification
  4. Technical specifications
  5. Vendor information
  6. Cost estimate and budget code
  7. Urgency and timeline
  8. Attach quotes and supporting documentation

  9. Submit through procurement system

  10. Technical Review (IT Team):

  11. Verify technical requirements
  12. Confirm compatibility with existing systems
  13. Check for security and compliance requirements
  14. Validate against standards

  15. Approve or request modifications

  16. Security Review (if applicable):

  17. Security team reviews for new vendors or security tools
  18. Assess data protection and privacy
  19. Verify compliance requirements
  20. Request additional information if needed
  21. Approve or reject with feedback

4. Budget Approval

  1. Finance verifies budget availability
  2. Department head approves budget allocation

  3. Route for appropriate spending approval

  4. Executive Approval (if required):

  5. CTO approval for technical alignment
  6. CFO approval for financial commitment
  7. Legal review for contracts

5. Procurement

  1. Procurement team processes approved request
  2. Creates purchase order
  3. Submits order to vendor
  4. Tracks order status

6. Receipt and Verification

  1. Receiving team inspects delivery
  2. Verifies items match purchase order
  3. Reports any discrepancies
  4. Registers assets in asset management system

7. Deployment

  1. IT configures hardware/software per standards
  2. Tests functionality
  3. Deploys to requestor
  4. Provides necessary training/documentation

8. Invoice Processing

  1. Finance receives and reviews invoice
  2. Matches to purchase order and receipt
  3. Processes payment per vendor terms
  4. Updates financial records

New Vendor Evaluation

For vendors not on approved list:

9. Initial Assessment

  1. Business need justification
  2. Vendor background research
  3. Financial stability check
  4. Customer references requested

10. Security Assessment

  1. Security questionnaire completed
  2. Review security certifications (SOC2, ISO 27001)
  3. Assess data handling practices
  4. Evaluate access controls and encryption
  5. Review incident response capabilities

11. Compliance Review

  1. HIPAA compliance verification (if handling PHI)
  2. Data processing agreement review
  3. Privacy policy assessment
  4. Regulatory compliance confirmation
  5. Data residency requirements
  1. Contract terms evaluation
  2. Service level agreements
  3. Liability and indemnification
  4. Termination and data return provisions
  5. Insurance requirements

13. Financial Assessment

  1. Pricing structure review
  2. Payment terms negotiation
  3. Total cost of ownership analysis
  4. Budget impact assessment

14. Technical Evaluation

  1. Integration requirements and capabilities
  2. API availability and documentation
  3. Support and maintenance terms
  4. Scalability assessment
  5. Disaster recovery capabilities

15. Approval Decision

  1. CTO reviews complete assessment
  2. Approve, request modifications, or reject
  3. Add to approved vendor list if approved
  4. Document decision and rationale

Hardware Procurement

Specific procedures for hardware:

16. Needs Assessment

  1. Define requirements (performance, portability, specific features)
  2. Identify standard configuration match
  3. Request custom configuration approval if needed

17. Standard Configurations

  1. Standard Laptop: 16GB RAM, 512GB SSD, 3-year warranty
  2. Power User Laptop: 32GB RAM, 1TB SSD, dedicated graphics, 3-year warranty
  3. Desktop: 16GB RAM, 512GB SSD, dual monitors, 3-year warranty
  4. Mobile Device: iPhone (current or previous generation) or approved Android

18. Procurement

  1. Order from preferred vendor (Dell, Lenovo, Apple)
  2. Include asset tagging service if available
  3. Schedule delivery

19. Receipt and Setup

  1. Inspect for damage
  2. Apply asset tag
  3. Image with standard configuration
  4. Install security software
  5. Configure encryption
  6. Test all functionality

20. Deployment

  1. Assign to user in asset management system
  2. Deliver with setup documentation
  3. User signs asset acknowledgment form
  4. Provide user training as needed

Software and SaaS Procurement

Specific procedures for software:

21. Needs Assessment

  1. Define business requirements
  2. Identify number of licenses needed
  3. Determine if existing tool can meet needs
  4. Research alternatives

22. Free Trial/Proof of Concept

  1. Request trial or POC from vendor
  2. Test with representative users
  3. Evaluate against requirements
  4. Assess user adoption and training needs

23. Security and Compliance Review

  1. Complete security questionnaire
  2. Review data processing agreement
  3. Assess integration requirements
  4. Verify SSO compatibility
  5. Check compliance certifications

24. License Type Selection

  1. Choose appropriate license type (user-based, device-based, concurrent)
  2. Determine if subscription or perpetual
  3. Assess volume licensing options
  4. Calculate total cost of ownership

25. Procurement and Setup

  1. Purchase licenses
  2. Configure SSO integration
  3. Set up user provisioning
  4. Configure security settings
  5. Document configuration

26. User Onboarding

  1. Provision licenses to users
  2. Provide training materials
  3. Offer training sessions if needed
  4. Establish support process

27. License Management

  1. Track licenses in asset management system
  2. Monitor usage and compliance
  3. Review quarterly for optimization
  4. Renew or adjust licenses as needed

Renewal Management

For recurring licenses and subscriptions:

28. Tracking

  1. All renewals tracked in asset management system

  2. Automated reminders 90, 60, 30 days before expiration

  3. Review (60 days before expiration):

  4. Assess continued business need
  5. Review usage and adoption
  6. Evaluate cost vs. value
  7. Consider alternative solutions

  8. Determine license quantity needed

  9. Negotiation (if applicable):

  10. Request renewal quote from vendor
  11. Negotiate pricing and terms
  12. Seek volume discounts
  13. Explore multi-year commitments for savings

29. Approval

  1. Follow standard approval process
  2. Budget verification
  3. Obtain required approvals

30. Renewal

  1. Submit renewal order
  2. Verify continuation of service
  3. Update asset management system
  4. Process payment

31. Non-Renewal

  1. Notify vendor of non-renewal
  2. Migrate data if needed
  3. Decommission and remove access
  4. Cancel payment authorization
  5. Update asset records

Exceptions

Exceptions to procurement policy may be granted for:

  • Emergency Situations: Critical business need requiring immediate purchase
  • Single Source: Only one vendor can provide required solution
  • Strategic Initiatives: Executive-approved strategic projects
  • Grant-Funded: Purchases funded by specific grants with vendor requirements

Exception process: - Document exception justification in purchase request - Obtain CTO approval (or CFO for financial exceptions) - Complete security/compliance review post-purchase if not feasible beforehand - Document exception in procurement records - Report exceptions quarterly to executive leadership

Compliance and Enforcement

  • Procurement Tracking: All purchases logged in procurement system
  • Approval Workflow: System-enforced approval workflows prevent unauthorized purchases
  • Monthly Reporting: Monthly procurement report to Finance and IT leadership
  • Quarterly Reviews: Review procurement compliance and vendor performance
  • Annual Audit: Comprehensive audit of procurement practices
  • Key Metrics:
  • Procurement policy compliance rate (target: 100%)
  • Average procurement cycle time
  • Cost savings from preferred vendors
  • Vendor performance scores
  • Budget variance
  • Violations: Non-compliant purchases result in:
  • Purchase rejection or return
  • Mandatory training on procurement process
  • Manager notification for employee purchases
  • Potential disciplinary action for repeated violations
  • Personal financial responsibility for unauthorized purchases

References

  • ISO/IEC 27001: Information Security Management - Supplier Relationships
  • NIST SP 800-53: Supply Chain Risk Management
  • SOC 2 Trust Service Criteria: Vendor Management
  • HIPAA Business Associate Requirements
  • Company Financial Policies and Procedures

Revision History

Version Date Author Changes
1.0 2025-11-08 IT Team / Procurement Team Initial version migrated from Notion

Document Control - Classification: Internal - Distribution: All employees, IT team, procurement team, finance team - Storage: GitHub repository - policy-repository