#3 Be Honest About Your Needs
Even before the world began responding to COVID-19, organizations of all shapes and sizes were seeking to reduce wasteful spend in every way they could. Any self-regulating organization would naturally move in this direction. However, with many of a business’ expenses coming from matters that are not their primary specialty, it can be difficult to be certain you are not wasting your budget. As the response to COVID-19 fluctuates and extends, businesses are stretching more than ever to reduce expenses. Unfortunately, for many businesses that means reducing staffing levels, a move that hurts both the individual and business. At The Comtel Group, we have long stood by the principle that properly managing your technology service providers is a provably reliable way to reduce wasteful spend. We have more than once seen a consolidation project on a single technology produce enough monthly savings to absorb the entire cost of one or more employees. Now, more than ever, when jobs are on the line, we believe that everyone should be looking at how to cut waste from their technology service spend before cutting payroll. This series of articles focuses on the principles and key techniques that we recommend to achieve an optimized spend on your technology services.
In this article, the title sounds like a challenge, but the truth is most people already understand most of this concept. That being said, it is core to the other principles of cost control, and it would be a disservice to not tie the concepts directly together. Most business leaders would say they have the ability to distinguish between a Need and a Want. The most common problem arises when you ask them to explain why something is a Need. The typical response to that question is a broad generalization that no one would ever argue with. Greater Reliability. Improved Productivity. Lowered Cost. Who would say no to any of these ideas? At the same time, it is also true in many of these cases that aspects previously deemed as reliability or productivity requirements are quickly pared down once a price tag is attached, thus revealing only strong desires, masquerading as needs.
How is it that we can understand there is a difference between an actual requirement and something we would just strongly prefer to have, but we have such trouble recognizing it in practice? The problem lies in the broadness of what is accepted as justification for necessity. Greater Reliability is an ideal that no one would disagree with, but it also leaves a lot of room for interpretation. Is reliability a day-to-day matter, or “in case of failure?” Is it measured in days, hours, minutes, seconds, or less? What is the cost of not having it, or otherwise staying where you are today? Is greater reliability needed, and to what degree, for employee productivity, customer satisfaction, or another business driver?
As you consider the ways in which you can sculpt a broad ideal into a specific need, you will soon find there are many questions that could be asked. In fact, it may even be the overwhelming nature of specification that drives many people to the broad generalizations in the first place. Rather than risk chasing wild geese down rabbit holes, you can bring a lot of clarity to your need specifications quickly if you answer the following four questions:
- What business drivers or results does this need stem from?
Tie the need to the results the business requires. If the need doesn’t align with the business drivers, it’s not a need, full stop. If it ties to more than one driver, try to determine the split amongst the drivers. The benefit is usually not equally distributed, and this will heavily affect how budget is allocated to solve the need.
- What behaviors need to change to fill the need?
If you expect the need to be fulfilled by an autonomous device, what behaviors are needed to ensure the device continues operating correctly? At the root of it, every solution will involve some change in long-term behavior. When you understand the behaviors required to support a solution, you have a better understanding of what costs a solution will have that won’t show up on the solution provider’s quote.
- How will this change be measured & managed to promote success?
More than just generating the results you expect, you also want to make sure that your decisions are positioned to be well received by those who have to support them. It is essential you know how you will measure both behavior and success.
- What levels of risk are the business exposed to, and by when, if this need remains unfulfilled?
You cannot accurately describe the value of something without speaking to the cost of not having it. Make a more concrete statement of value by converting soft costs like “employee productivity” into hard costs such as “[X] minutes per day waiting for transactions to complete, which equates to $[Y] per year.”
These four questions will give you the perspective that helps you clarify the actual need by connecting the business strategy to the tactical behavior. This clarity will allow you to quickly recognize solutions that align with your business drivers, identify the measurements you’ll use to gauge their effectiveness, and prioritize all the requirements you are tasked to tend to.
With a proper understanding of what your organization’s true goals are, and how you will incorporate change into your current business process, you can define a precise list of requirements that, when fulfilled, give you confidence that you aren’t paying anything beyond what you actually need.
