#2 The Number One Way to Reduce Wasteful Spend
Every article in this series will discuss a specific technique, process, or perspective that will help you reduce the amount of time and money that is being spent unnecessarily on technology services. Everyone is well aware of the impact recent events have had on national economies as well as individual lives. It is our hope that helping you reduce wasteful spend in your technology helps reduce the strain on maintaining your payroll during these uncertain times.
We’ve already talked about consolidating your purchasing decisions so that there is only a single gate keeper, and how this will naturally prevent duplicate purchases and continued paying for unnecessary services. However, while that does help prevent wasteful spend from growing, it doesn’t guarantee that you will reduce already existing wasteful spend. The rest of these articles will speak to how you can evaluate and consume your technology differently to achieve a more streamlined monthly cost, but, before we get into all of that, there’s one fundamental idea that must be addressed before, during, and after all others. That idea is pretty simple, but it becomes a phenomenal game changer once you understand the true power behind it. That idea is composed of two simple principles that are consistently true throughout the technology service industry.
- Every product you buy from a Service Provider pays a commission to the salesperson or “Agent” that you bought it from.
- You have the power to decide who your Agent will be with each Service Provider you purchase from.
As you were warned, these points are simple and likely well known. Where things change is when you understand what your Agent does with the commissions they receive. Before we talk about that, though, let’s first do a quick run down of the typical types of Agents you might deal with:
- Direct Agents – As the name states, these guys work directly for the provider. If you aren’t working directly with a provider, then you are by default working with a Direct Agent. They may be experts in their specific products, but they usually have limited knowledge in their competitor’s products, and can only really push their one set of products. As these are paid hunters, their job is to get you to sign and then move on to the next opportunity.
- Sales Consultant or Broker – A form of Indirect Agent, as they do not work directly for the provider or providers they recommend. These guys can acquire quotes from dozens or even hundreds of different providers, but that’s typically where they stop, not providing any installation, configuration, training, or management services.
- Value-Add Reseller – A form of Indirect Agent, they typically work with just one provider, sometimes a handful. They typically bundle in more tailored aspects of configuration, training, and repair support for the technologies you are purchasing through them. They typically do not get involved in technologies you do not purchase through them.
- Managed Service Provider – While most MSPs can be paid a fee to manage existing services, that tends to be a direct out-of-pocket cost. At the same time, many MSPs are also Indirect Agents of the provider they are most comfortable with. While this can sometimes limit the width of their perspectives, it typically also guarantees a depth of expertise. This trade-off is more than acceptable if you know that the particular provider in question is the one you want to purchase from. At the same time, this path also typically commits you to the specific provider the MSP partners with.
Some of these agents can provide more value in certain areas than others, but are likewise weaker in other areas. While some pieces will be taken off your plate, others will be left entirely with you. In a way, this contradicts our very first point of having a singular source for purchase decisions. If you use an MSP or VAR, for example, they will likely be heavily influencing decisions related to their specific technologies, but not necessarily weighing in at all on anything outside of their narrow realm.
This conflict introduces a need for an Agent type that can provide services across all aspects of the lifecycle, across multiple technologies, while still giving you the ability to compare different solutions. We call this type of Agent a Value-Return Broker. A Value-Return Broker applies the commissions they receive toward the fulfillment of all aspects of the lifecycle, with multiple technologies. In essence, the purchases you make through a VRB can fund Evaluations, Implementations, and Support services, even if they aren’t the directly for the services you bought through the VRB. With an Agent empowerment vehicle like this, you can easily consolidate all of your technology service purchases through one procurement source, and then you decide exactly how the commissions are applied in your favor. You can even have the commissions from technology A applied to supporting services from technology B, even if the VRB was never previously involved in technology B.
The Comtel Group is not only a Value-Return Broker, but we go a step further in guaranteeing the commissions are put where they best belong. If you consume no services from us while purchasing your technology services through our agency, we will cut you a check for the commissions that would have been otherwise applied to supporting you. You can put that money right back into your budget, and use it however you want. Any way you slice it, you can rest assured that every dollar paid in commissions is being put to your best interest.
Putting those commission dollars to work for you, in the way you need them, or putting them back in your budget, is the number one most effective way to reduce wasteful spend in your technology services.
If you’re paying too much for your technology services, if you’re uncertain about which new services you should purchase, or if you believe the commission dollars your current Agent is earning aren’t being put to your benefit, give us a call.
