How Procurement Can Help Overcome Key Challenges in IT and Telecom in 2025

Remember that viral meme from The Office where Michael Scott says, "I am ready to get hurt again"? It feels oddly relatable for businesses navigating the IT and telecommunications landscape in 2025. After years of inflation, labor shortages and rising costs, companies are bracing for another challenging year. Yet, just like Michael, businesses are adapting, strategizing and finding new ways to thrive.

This blog explores actionable strategies to optimize IT and telecom procurement while addressing evolving challenges and opportunities in 2025.

Building a Procurement Roadmap 

To tackle rising costs and economic pressures, procurement teams need a sharp, proactive strategy. Strong relationships with stakeholders are essential for aligning financial goals and creating procurement processes  that focus on value. This helps procurement reap both savings and strategic growth.

Cost management must remain a top priority, particularly as vendors introduce price hikes and subscription models. Exploring alternative cost-takeout strategies, such as innovative delivery models and increased competition, can help alleviate financial pressures. At the same time, sustainability has become non-negotiable. From hardware lifecycle emissions to energy-efficient solutions, prioritizing eco-friendly practices can meet regulatory demands while building stakeholder trust.

Telecom: Rapid Change and Evolving Strategies 

The telecom sector is likely to undergo seismic shifts in 2025. The rapid adoption of 5G and IoT technologies continues to drive demand, disrupting traditional carrier models. Unfortunately, this also means rising costs for businesses as carriers pass along infrastructure expenses.

What Procurement Can Do:

• Take advantage of Unified Communications as a Service (UCaaS) solutions to negotiate better rates on traditional telecom services.
• Employ effective in-house processes or partner with telecom expense management providers to optimize wireless and wireline spend.

Hardware: Balancing Growth and Sustainability

Hardware procurement is a balancing act in 2025. On one side, rising demand for cloud usage and compute-intensive solutions is driving significant growth. On the other hand, supply chain disruptions  and sustainability expectations are creating challenges that can’t be ignored.

Organizations should carefully evaluate their hardware ownership models—whether buying upfront, leasing, adopting “as a service” options, or exploring hybrids—to align investments with financial and operational goals. Sustainability must also take center stage, with procurement teams pushing original equipment manufacturers (OEMs) toward greener production practices and greater emissions transparency.

IT Industry: Challenges and Growth Opportunities

The IT sector is set for moderate growth in 2025, led by software and cloud/data center adoption. Generative AI will play a starring role, creating cross-category opportunities and challenges.

However, the road isn’t without bumps. Inflation and skilled labor scarcity remain significant hurdles, driving up costs across IT categories. Procurement professionals must tackle these challenges head-on with data-driven strategies.

What Procurement Can Do:

• Focus on negotiating upfront rates while exploring alternative delivery models.
• Periodically evaluate relationships with strategic IT service providers to maintain a competitive environment.

Also Read: How to Build Your IT Procurement Strategy

Software: The Double-Edged Sword

Software remains a bright spot in the IT landscape, with double-digit growth driven by digital transformation. Yet, this growth comes with challenges, including rising subscription costs and vendor lock-ins. Generative AI tools like Microsoft Copilot and Adobe Sensei are adding new capabilities but also creating new revenue streams for vendors, further driving up costs.

To address these cost pressures, organizations must shift to usage-based and hybrid licensing models that better align with their actual needs. A disciplined approach to SaaS management is also essential to avoid unnecessary expenses and maximize returns on investment.

Finding Opportunities in Challenges

2025 isn’t just another year of economic headwinds. It’s a year of opportunities for businesses willing to innovate, strategize and evolve their approach to IT and telecommunications procurement.

The road ahead may feel like a high-stakes chess game, but procurement teams have the tools to win. By leveraging digitalization, building strong partnerships and prioritizing sustainability, organizations can turn these challenges into opportunities.

Remember: just like Michael Scott’s unwavering optimism, adaptability and strategy can turn even the toughest situations into success stories.

For a deep dive, read the 2025 GEP Spend Category Outlook Report.