From the assembly line to the refrigerated delivery truck to the telephone to the microchip to the internet, as technology has evolved so, too, has business. History has shown that companies that do not adapt to incorporate rising technology trends find themselves replaced by those that do. Now, that’s not to say every business should jump on to the bleeding edge of technology. There have been plenty of technological fads that fizzled out, and no one is denying the wisdom in patience. Rather, businesses should not fear the changes that technology makes available; they should look toward them as opportunities to improve. In many cases, newer technologies not only afford ways to increase production but also lower cost.

Where once days of productivity lost due to moving between regions were measured in weeks, airplanes allow us to now count in hours. Where once written correspondence took days or even weeks to complete a single exchange, phone calls, e-mails and texting now accomplish more across further distances in mere minutes. And even today, web conferencing has been steadily rising in popularity as an alternative to in-person face-to-face meetings. As we will see more clearly defined in the near future, cloud-based collaboration tools allow us to consider changing not only how business is done, but where.

With unified communications services (UCaaS), web conferencing (including screen sharing, presence management tools, productivity tracking applications, and zero-trust network security, it becomes possible to free your skilled knowledge workers from their cubicles. Mobile workers are typically already well-liberated, but they might find even further freedom through the integration of fleet management tools, which can orchestrate a more efficient cycling of vehicles through the maintenance pool such as to minimize the required garage space. The combination of IoT sensors, Robotic Process Automation, and remote presence technologies means that it’s even possible to establish a remote position for many types of production workers. These technologies allow us to break free from one of the oldest constraining factors in business: operating space. We already know about the benefits of reducing the size and complexity of our IT closets by pushing our line-of-business applications up to the cloud. By making the same shift with employees, skilled knowledge-based businesses can dramatically reduce or even eliminate the need for office space. By enabling production and QA employees to monitor from remote positions, more square footage can be opened up on the floor for actual production, staging or even storage and transportation.

Even considering how dramatically world-wide business has changed recently, this idea will still be uncomfortable for many, and it will be inappropriate for many others. Yet, there are still many out there who began moving this direction in 2018, so the idea isn’t terribly new or radical. There’s only now a clearer case for how operating this way can benefit many types of organizations. Clearly, there are still a lot of factors that would need to be defined and discussed before any business could safely begin the type of transition necessary to move workers off-site and subsequently reduce space and expenses. However, when a company is able to execute this type of transition, the savings potential is phenomenal, especially when many organizations can reduce their operating space expenses (rent, lights, water, temperature, & maybe more) by over 50%.

The Comtel Group can help you explore whether this type of transition makes sense for your organization, as well as help you evaluate any of the technology services your business is currently consuming or might benefit from in the future. When you purchase these technologies as a service, up to 15% of your expense is paid in commissions to your sales agent. Make sure you select an agent that will leverage those commission dollars to your benefit. The Comtel Group offers our industry-disrupting “Provider Exchange Management’ service, which lets you apply those commission dollars to either subsidize the expert help you need or recapture them into your pocket. Either way, you lower your total IT budget.

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Many customers are surprised when, looking at the history of their telecom spend, they realize that their bill has gradually increased in small increments to an amount that is now a significant premium. What was once a great deal has gradually undone itself, and now you’re paying as much as you were before you changed. For many others, the shock is much more immediate, when the first bill is 50% more than what was listed on the contract. Very few customers report having never had a variance between what they expected and what they were actually billed. With misbilling affecting unbelievably large percentages of service provider customers, there are a few steps you can take to ensure your billing matches your expectations.

As many of those consuming service technologies can attest, the first you get is going to be higher than what you signed for on the contract. That’s not just because of sales tax, but because providers love to find ways to hide significant fees in surcharges and other forms that are clearly not a service being provided to you, but aren’t taxes or tariffs, either. Most clients find that anywhere from 10-35% of a provider invoice is comprised of these types of inflationary charges. Therefore, the first point you can express control over billing drift starts before you even place your service orders, when you require the service provider to confirm for you (preferably in writing) what charges are going to show up on your bill that aren’t explicit line items on your contract. This includes variable usage, such as voice minutes and cellular data usage, as well as regulatory and administrative surcharges and fees. Basically anything that isn’t a true tax should be on this list. On the front end this helps you get a clear expectation of the true cost of service. On the back end, if you have a pre-signature explicit agreement of what surcharges will be on your bill, you have significant leverage in your pocket should any unexpected charges show up later.

The second point of control occurs when you receive your very first invoice. You’ll need to ensure that first bill is compared against your contract, and any mistakes are promptly disputed. While many examples of billing drift are intentional incremental growth over time, there are a significant amount of billing errors that go uncaught for long periods of time. At the root of that, most billing errors can only occur when someone makes adjustments to the system, such as from change of services or, most commonly, new account setup. The lion’s share of billing mistakes we see are evident within the first 1-2 billing cycles of a new service. Furthermore, most providers limit their billing disputes to issues within the last 90 days, and it can often take more than one billing cycle to resolve a dispute. The intersection of these points means you have a limited window in which to report an issue if you want to be fully reimbursed. One key note when reviewing the first bill is to make sure you adjust for prorating. Service providers tend to bill on fixed schedules, and those are rarely determined by when your service actually went live. Therefore, almost every customer receives a prorated bill for the first billing period, sometimes for just a few days, sometimes for nearly two months of service. Make sure you’re comparing a single, complete billing cycle against your contract.

The third point of control is a regular review of your invoice. Quarterly reviews will ensure you’re minimizing any period that might not be covered by the 90 day limit on billing disputes mentioned earlier. If you have followed the first two points, then this periodic review does not take a lot of time. You’ll have a clear understanding of what your contractual commitments are, as well as the surcharges that are not on the contract. You’ll also have a clear expectation on what promotions are on your account, and when they end. The trick to this step is that you need to compare your current bill against your contract expectations. Many companies make the mistake of comparing the current bill against the last bill, but not looking any further back. This is where billing creep goes wild. Suppose Company A has their AP review any accounts that increase more than 5% from the previous bill. A multi-year contract provider who is slowly inflating their surcharges, adding 0.5% every other month, will slide under the radar, exceeding that 5% limit at 22 months without raising any alarms, and only going further from there. While it’s not a bad idea to look at a bill compared to other recent invoices, you also need to make sure you’re comparing against your original contract commitment.

If during any billing review, whether the first or the thousandth, you have reason to raise a dispute, the process to register that complaint is fairly straightforward, but extremely critical that you execute correctly, so let’s run over that briefly. Step 1 of a billing dispute is to gather your evidence: e-mails, previous bills, other billing dispute ticket numbers, etc. You might choose to keep this close to your chest to leverage any provider mistakes, or you might choose to lay it all out on the table upfront to preemptively remove any change for the provider to dodge responsibility, but either way you’ll want to have everything in front of you before you begin. Step 2 is to open a billing dispute ticket with the billing department, clearly stating which portion of the bill you are disputing, and capture the dispute ticket number. If you have an account manager, fill them in on the ticket number, but do not go through them for this action. The reason it is important that you directly contact the billing department to open a dispute ticket is because this specific combination of words and actions sets a legal standing that means you can withhold payment for the portion of the bill you are disputing, and the provider cannot penalize you or withhold services until the dispute is resolved and the allowed time for post-dispute payment is passed. In other words, when you call the billing department and open a dispute on a specific amount, you don’t have to pay for that amount on your bills while the dispute is being resolved. And this leads to Step 3: Pay the part of your bill you aren’t disputing! Some think they will have greater bargaining power if they withhold the entire invoice amount throughout an ongoing dispute, but ultimately this just gives the provider the legal position to discontinue all services due to non-payment, making this the weakest position to take. Instead, make sure you pay the full amount of your invoice minus only the portion you are disputing. Not only does this prevent the provider from arguing a non-payment scenario, but it also demonstrates a reasonable good will that tends to make the resolution of the original dispute go much smoother.

The fourth and final point of control is when your original contract expires, and the discussion for renewing begins. If you weren’t able to execute the first two control points, the renewal period is the best time to regain control of your spend. Along with any changes in technology you might want, renewing and upgrading is a great opportunity for you to renegotiate your price, especially surcharges and changes to contract language that prevent future billing drift. Even more to the point, your renewal period is really your only opportunity to reassess whether your current provider is still the best provider for you. Therefore, taking charge of your renewal process is key to being in control of your technology spend.

And, of course, if you don’t have the time or interest to handle these aspects personally, make sure you’re leveraging an agent that can do this work for you.

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One solution to addressing changes in business has taken the market by storm: Software Defined Wide Area Networking, or SDWAN. Lots of “providers” are offering SDWAN, and lots of organizations are claiming success with SDWAN, but when you start to dig into the individual accounts, you quickly realize that businesses measure success in different ways. The truth is SDWAN is not “one” solution. It turns out that SDWAN behaviors and capabilities vary between manufacturers. It then gets geometrically complex, as some SDWAN solutions are repackaged by carriers, MSPs, and other service providers, who might support features differently between them, and/or bundle in other products. When you see the full scope of SDWAN technologies on the market, you realize that SDWAN is so successful precisely because there are so many ways to do it – there is probably a model of SDWAN for every business out there. The downside to this is that the wide variety of choices makes it difficult to compare and find the one SDWAN provider, solution, and configuration that is perfect for your organization.

To clear some of the air around this subject, let’s first discuss what SDWAN really is and what that means. Then we’ll talk about what we can get out of it, how to shop for it, configure it, install it, and support it, and the choices you’ll have to consider along the way. When we’re done, among other accomplishments, you will be able to build a clear argument for whether SDWAN could be a fit for your organization, and how, exactly it would help you achieve your KPIs.

SDWAN is a subset of the larger category of Software Defined Networking. SDWAN is built on the core principle of offloading the CPU-intensive processes to one or a few external process servers, either on-prem or in the cloud, allowing the routing hardware to maximize onboard resources for greater throughput and related functionality. At the most fundamental level, SDWAN is just the virtualization of routers, as it applies to Wide Area Networking.

Let’s take a moment and talk about what it means to us to have virtualized routers. Many of us are already familiar with virtualized desktops and servers, and the benefits they provide. Virtualized routers provide similar benefits. The most quickly recognized being: gone are the days of having to connect directly to the Command Line Interface (CLI) of each and every router on your network to make any table or policy changes. Now, with central orchestration capabilities, you can define your policies in one portal and know that all your branch routers are performing exactly as they should. Because of central orchestration, maintenance of virtual routers is lighter as updates can be executed in controlled batches via templates. Templates also make it easy to rapidly deploy new devices, but being able to flash any saved config onto your hardware is a tremendous boon when deploying, maintaining, or even troubleshooting.

Beyond the obvious and immediate benefits, there are a couple of other benefits that are worthy of consideration. The ease of deploying and maintaining virtualized routers allows you to now decide for yourself whether or not you standardize the underlying hardware. In fact, you can even choose to standardize along whatever tiers you want to define. Because the software can now be decided on independently from the hardware, you could choose to deploy low-cost smaller boxes at branch locations, higher-capacity boxes at regional offices, and an even more powerful device at HQ and any data center locations, all while having the same software loaded onto each and every one.

For more information, look for our next article and to talk with a Solution Architect contact us below.

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With over 30 years of experience spanning thousands of customers, from the local Mom ‘n Pop Shop that needs reliable internet that won’t break the bank, to the tri-state non-profit that needs to add bandwidth to support video conferencing, all the way up to multi-national corporations forklifting their MPLS networks to SD-WAN, The Comtel Group has helped all types of customers.  And from straightening out the spaghetti wiring in the IT closet all the way to trouble-shooting nation-to-nation voice peering routes, Comtel has helped resolve more problems than any single-business IT professional could ever possibly have to worry about.  With such a broad perspective, it should be meaningful, then, when we say that the # 1 most common problem we encounter across businesses of all sizes, industries, and locations, is a decentralized purchasing process.

The most harmful aspect of decentralized purchasing to an organization is “organic growth.” If you’ve ever come across a patch of untamed land, you’ll already be familiar with the impact that organic growth can have on a space. Not only is it a mess that requires extreme effort to maneuver through, but as soon as you look beyond the surface you’ll see that new growth has covered the older, causing them to wither but not quite die completely, forgotten and no longer serving a purpose, but still consuming resources.  Having multiple people purchase technologies leads to the same sort of organic growth within a business.  Different people reference different documents to determine what resources are available; different documents provide different answers, inevitably leading to ordering unnecessary and often duplicate resources. As employees come and go, new documents replace old ones, and those unnecessary resources become unknown resources, which eventually become resources that are forgotten by the IT department, but still paid for every month. No one wants to disconnect it without knowing its purpose, but no one has the time to find out what it’s connected to. Decentralized buying also encourages bureaucracy, with more decision makers resulting in committees to review, which not only slows the decision-to-fulfillment time frame, but also allows for resource-eating inter-factional bickering to sprout up.

The solution is relatively simple: allow only one person to be the central authorization for all technology purchasing decisions. Of course this person can seek input from peers and be held accountable by supervisors, but there must be only one voice that approves the decision to purchase any specific technology for an organization. Whoever you assigned must also take ownership of inventorying all resources and consulting that inventory when new resources are requested.  Some organizations attempt to have different people take responsibilities for different types of technologies.  While this does limit duplication and waste within any single technology, this completely misses the opportunity to consolidate and bundle different technologies.  Not only does bundling allow a greater overall discount, but it allows an opportunity to see the forest from the trees, and ensure that we aren’t buying two technologies when we could be buying just one.

The biggest catch to this whole principle is that the expertise necessary to coordinate the evaluation and purchasing of all different types of technologies is often times more than a single person can handle, especially when competing with day-to-day activities. In these situations, you can gain significant breathing room by offloading the resource-allocation and service-procurement responsibilities to a managed service provider.  As you may or may not know, every service provider is already allocating up to 15% of your invoice to a sales representative. At the very least, make sure you don’t let those monies go to waste, and pick a person or entity that you can help you reclaim what would typically be lost commission dollars, and leverage them for tangible business outcomes.

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Many aspects of business technology can be boiled down to a matter of science. However, most would agree procuring and negotiating contracts does not fall under the term “scientific”. It is often at this phase of the technology lifecycle, they feel they’re at the mercy of salespeople or a process that hinders optimal outcomes. We believe there is, in fact, a way to standardize your evaluation and contract procurement giving you control of your technology purchases. The following segments cover the 5 steps you need to know to negotiate the lowest possible price for the services you need.

Part 5 – Negotiating Contracts

As a result of following the first 4 steps of this process, you’ll have achieved the following outcomes:
A. Clearly tied your technology purchase to the KPIs you are trying to drive, and achieved stakeholder buy-in.
B. Gathered all of the technical data you need, both internally and externally, and defined the technology you want to shop for.
C. Created a clearly defined specification, pricing response format, and vendor evaluation scorecard.
D. Delivered your specification to a limited number of providers and received their responses in your defined format.
E. Graded each of the responses and determined 1-3 providers that have made it to your “finalists” list.

The next and final step is to negotiate with the provider. To be clear, while price may be a topic of negotiations, we are not talking just about haggling the price. We’ll get into specifics on what this means in a moment, but first let’s cover two key principles to remember when it comes to service provider contract negotiations. First: get everything in writing. Lots of salespeople promise lots of things. Sometimes those salespeople aren’t being honest with what they can actually do; sometimes those salespeople move on to another position or company, no longer able to actually fulfill their promise. Having a commitment in writing, especially if it’s an addendum to your actual contract, makes it an enforceable expectation. Second: As you develop your list of negotiation points, make sure you are clear on which points are essential and which are simply preferential. Don’t tell the bidding providers which points are not essential (that’s basically highlighting for them that they can ignore those points), but make sure that you know. At certain points in the negotiations, you are likely to find it advantageous to “give up” some of your preferences to help leverage the provider to commit to delivering on your essentials. After those key principles, there are five areas of the contract you should be paying particular attention to.

1. Licensing rights. As more technologies move to Cloud and “As A Service” models, licensing rights will continue to grow in importance. Make sure your contract clearly spells out what you can and cannot do with your licensing. Most providers have a Fair Use doctrine or End User Licensing Agreement that you can reference, but more than just understanding what you can do on a daily basis, make sure that you have clarity on your flexibility to change licensing between users, add or remove licensing throughout the life of the contract, and, most importantly, what your rights and responsibilities are for any licensing once your contract completes. Many providers retract licensing rights once you end your service, but the expiration of your contract and the conclusion of your service are not always going to be the same thing.

2. Speaking of adding or removing throughout the life of your contract, make sure your contract includes language that gives you room to change. For starters, always contract for only the absolute essential quantities of products. If you have a variable requirement throughout the year, or if you expect to be streamlining any workflows, then take that into account now, and make sure you’re only on the hook for what you absolutely require. Also make sure you have a technology refresh clause, which allows you to restructure and modernize the products you are consuming, typically halfway through your contract. Consider whether a Business Downturn clause would be beneficial to you, and, of course, we always recommend ensuring that you have a statement of Non-Automatic Renewal. If you know that one or more of your branches will be relocating within the timeframe of the contract, then negotiate in free relocation services to be used when the time is right.

3. The third area of the contract you’ll want to pay special attention to is the Service Level Guarantee or Agreement. In most cases, a provider’s SLA response will seem impressive, but the consequence of failing turns out to be a pittance compared to what might have been lost as a result of a failure. For example, many ISPs have contract language that reimburses you 1/30th of what you pay for your internet each month. Clearly nothing like what would be lost if you didn’t have internet for an entire day. While it’s not realistic to expect a provider to change their SLA commitments, it is worth asking them to change their responses to incidents and especially SLA failures. For example, you should ask for the contract to reflect a compensation amount more commensurate with your expectation of lost monies due to that service’s failure. Ask to have your trouble tickets automatically escalate to Tier 2 support. Ask to be automatically released from contract under repeated carrier failure, such as downtime in excess of 24hrs (perhaps all at once, perhaps over a 30 day period, as is appropriate for your needs).

4. The fourth area of focus is about resource commitment. As mentioned before, salespeople promise a lot of things. Regardless of their intentions, you want to get it all in writing. This includes discussions about what resources will be committed to your transition project and account management. This also includes discussions about how the commission payment from your account will be allocated to your benefit.

5. Lastly, you’ll want to make sure that you have language that protects your price. Many providers have default language that allows them to increase your price over time under a handful of claims. Make sure you have language that requires the provider to confirm all price changes with you in writing, either e-mail or certified postage, but NOT as a one-page blurb inside your monthly bill. You might also attempt to negotiate language that dissolves your contract if you do not agree to the price change. Make sure you ask to have the provider remove any of the “bloated” fees, such as administrative fees, late fees, or any other number of surcharges.

It’s up to you to decide what points you want to ask for, and which items you’re willing to give up and which are absolutely necessary. Whatever you decide to ask for, you should make sure you ask for something in exchange for your commitment to sign. Provider contracts are designed to protect the provider, so you shouldn’t accept their terms at face value.

You will not always get a favorable outcome when negotiating with a provider. Remember that your most powerful negotiating tool is your ability to walk away and go talk to another provider. If you aren’t finding the provider is willing to work with you to craft the terms you need, don’t be afraid to pick the next best option on your list and discuss with them. You may find that your second choice gives you a first-rate contract.

When you have squared away all the terms and conditions, and you believe you are ready to select a vendor, it is time to make one last play for your price. Thanks to our scorecards, we already know we’re dealing with the provider who has the best cost-benefit, but that doesn’t mean we can’t get an even better price. Here, you’ll tell the provider something to the effect of “everything is lining up real well, there’s just one detail left to work out: the price. In order to be able to sign off on this, I need this package to be priced at $XXXX. If you can do that, I can commit to signing.”

This statement is a commitment that you will sign their contract if they meet your specific price point. There are a few considerations to the delivery of this message. First, you MUST stipulate a specific dollar amount. Asking how far they can come down all but guarantees you’re leaving points on the table, and asking for a percentage will convey that you’re just fishing for a discount. By expressing the specific dollar amount you want to see, you convey a matter of operational burden, not a question of “how much can we get off the list price?” Second, you should only make this play when you’re otherwise ready to sign with a provider. This is because it isn’t a bluff. If the provider delivers the contract with the stated pricing, you must follow through and sign. If you break your commitment (such as asking for “one more thing” after this), that will immediately and dramatically reduce your chances of concluding your negotiation successfully.

If the provider can’t meet your requirement, then you thank them for their time and move to the next name on the list. If they can, then you submit your order, conclude the evaluation process and begin preparations for the implementation of whatever new services you have chosen.

Mini-Series Epilogue:
Understanding that the description of all of 5 steps of “Controlling Technology Procurement Outcomes” is a bit of a long read, it is worth noting that many organizations walk through the actual process in many ways. Some do not require formal pricing comparisons, while others do not care about contract terms and conditions, and others still will not want to take the time to run both an RFI and an RFP. No matter which steps you add to your current process, you will see an improvement in the way you consume technology services.

If you’d like to add all of these steps, but you lack the time or resources, then it’s even more important that you make sure the providers you are talking with are able to apply the commission dollars from your order to the resources that you will need to properly consume their services. With commissions for some technologies as high as 15% of your monthly invoice, there is a lot of potential funding for the expertise you might need. And if you don’t need that level of support, then you should be recapturing those commission dollars so you can put them back into your IT budget. Good Luck!

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