Many aspects of business technology can be boiled down to a matter of science. Defining specifications, executing technology migrations, and testing features are all repeatable functions with controllable variables, and observable, measurable results.  Even troubleshooting is a matter of scientifically (and painstakingly) testing changes to variables, one at a time, and measuring the results until the desired outcome is achieved. There is, however, one area of business technology that most would agree does not fall under the term “scientific”: procuring and negotiating contracts. Regardless of whether or not you have a formal RFP process, it is often at this point in the shopping experience that customers begin to feel like they’ve lost control, and are now at the mercy of salespeople or a process that hinders an optimized outcome or experience.

Without knowing what the provider has up their sleeve and in their hat, many people feel relegated to playing games so they can get facts without giving away leverage.  These activities are also often seen to be heavily inter-personal and relationally based, considered by many to be more a matter of art than science. While that’s not an unfair statement to make, neither is it unreasonable to suggest that there is, in fact, a way to standardize your evaluation, procurement, and contract negotiation activities, giving you a clear path to staying in control of your technology purchases. The following segments will cover the 5 steps you need to know to negotiate the lowest possible price for your technology service and contracts you need.

Part 1 – Define your Own Needs

The very first and most important component to staying in control of your shopping experience is taking the time to define for yourself what it is you’re shopping for. Just as you wouldn’t jump in the car and start driving to a place you’ve never been to before, so must you also define the road map for your purchase before you begin shopping. This doesn’t have to be a particularly complex map, but it does need to clearly define the destination.  In order to do that, we need to understand what it is you’re trying to accomplish, how technology can best serve that objective, how you will be purchasing this technology, and then your actual technical requirements.

We like to start with the goal in mind, so we begin with the question: What outcomes are you trying to achieve?  Specifically, which KPIs need to improve? Can you apply a specific technology to drive those KPIs? Are we increasing customer satisfaction by introducing skills-based routing via a cloud contact center? Are we reducing time to open new stores by standardizing our WAN technology on a layer independent of the circuits? Are we just focused on reducing operational expenses?  If you haven’t tied your IT budget to your KPIs, then you’re missing the easiest way to quantify the value and priority of your technology purchases.

Once we know what we’re trying to achieve, and which technology will get us there, we need to make sure that all stakeholders are in agreement that this technology is viable, and they will support the shopping process. The goal here is for all stakeholders to weigh in and decide who will act as the decision maker for the entire organization.  Whether your organization works more like a collaborative team, a democracy, or monarchy, the decision maker will be the person in control of this process, so all stakeholders need to be aligned on who will represent them.  The second objective of stakeholder alignment is clarifying whether this purchase will be a single tactical step or a strategic position. Different organizations will define these differently, but they will have the same impact: tactical purchases are much simpler, often commodity-focused and transactional, while strategic selections will introduce complexities in choices that require a deeper clarity of business process. Tactical steps tend to be quicker and more standardized experiences. While strategic initiatives will have a longer implementation time and require much more customization, the other side of this coin is a deeper and much more meaningful improvement to business.

Also as a part of deciding who will represent you, you’ll want to consider how you will engage with various suppliers to make your purchase. Just like when buying a house or other major purchase, a percentage of what you purchase will be paid as a commission to the person who represents you as your Agent.  Also like when buying a house, you have the ultimate say in who represents you as your Agent. And still like when buying a house, there are reasons to be deliberate about where those commission dollars are going.  Many people consider calling the providers directly and asking them to submit their recommendations. This leaves the burden of evaluation in your lap, while also subjecting you to the “dog and pony show” of a salesperson who only has one pony. This is similar to asking the real estate agent who is selling a house to be the one who represents you in its purchase.  Many people consider using sales brokers, who can bring multiple providers to the table, and show you the lowest monthly rates. However, they are often times so focused on rate that they don’t even address the other areas of your true cost, and they’re going to be hands-off with your installation and support, even though they’re continuing to pocket commission dollars every month you keep your service.  When deciding on your procurement channel, we think it is prudent that you select an agent who will use the funding of the commission dollars to their fullest value. Not only help you evaluate your choices through an objective and methodical process, but to also potentially help you implement and support the solutions you choose over time.

The next step is where we roll up our sleeves and begin to do some of the heavy lifting.  This is why it’s important to have first chosen your procurement channel. If you’ve selected an agent who will apply future commission dollars to help you evaluate, you don’t have to worry about many of the coming details. If you’re more of a hands-on type of person, or you want to be able to test potential representatives for the maturity/effectiveness of their approach, then it’s time for us to define the specification.

Keep Your Team – Reduce Waste – Get Smarter Solutions

Every day, we see that as time progresses, technology advances and becomes more powerful. We are at a point today where we see adoption of new technologies driving immediate performance improvements, significantly reducing the cost of operating. We see evidence of this in the reduced cost of fuel and maintenance for electric & electric-hybrid vehicles. We’ve seen a particularly profound example of this in the energy sector, where solar paneling can generate enough energy that excess is sold back to the power company, turning one of the most necessary cost centers into a profit center. All around, technologies are constantly emerging that allow us to accomplish more with what we have. As we look toward the near future, and how international responses have impacted business, we must be conscientious of looking at ways in which updating older technology will allow us to either significantly improve our productivity or significantly decrease our expenses.

The most common example experienced right now is finding out that your firewall or VPN concentrator does not handle as many concurrent sessions as you require for the sudden increase of remote workers. Many companies are reflexively responding by simply buying more licenses to allow more concurrent sessions. However, this response leaves the Firewall/concentrator as a point of risk/waste for the future, whether through having more licenses than are truly needed in the long run, or by being a physical choke point requiring maintenance. This might be the most optimal configuration for your organization, but you should first be evaluating whether network connectivity could be more easily managed on a long-term basis with an SDWAN solution, or if offloading servers and file shares to a cloud environment would allow remote users to have quicker access while not bogging down office resources. Similarly, in light of the unclear impacts we have yet to see to supply and demand, does your communication platform allow your teams to communicate effortlessly when focused on adapting to market changes? Or, even at the more fundamental level, do you really need/want to lock your liquidity into permanent CAPEX purchases, or would you be better served with the option of a subscription services that will allow you to scale up and down as you need to?

This technique is often times thought to be harder to generate an answer from than others, as there is a soft component in the measurement of productivity. Rather than leave these to “gut feeling,” we recommend calculating out what your total daily payroll costs are, and breaking those down to the hour and even minute. Then, quantify how many minutes, hours, or days are spent being unproductive because of old technology. How many minutes do people wait each day for websites to load because of low bandwidth? How much is it really costing you when your server gets overloaded for only 2 hours every work day? Would it cost you more than that to have a virtual server you can spin up in a few minutes and run for only 2 hours a day?

Can you implement a solution using newer technology for the amount you’re spending (or even losing) on current processes and behavior? If so, then that is another opportunity to remove wasteful spending.

These are complex questions and if you want the benefit but don’t have the time feel free to reach out for help.

Keep Your Team – Reduce Waste – Get Smarter Solutions

Have you ever stopped at the store on your way home to pick up something you thought you needed, only to later discover that you already had it, or at least something close enough to get the job done? This wasteful double-spending happens far more frequently in technology purchases, where it is harder to discern the actual overlap between different products, and even harder, still, to figure out the minimal level of service you absolutely need.  Many customers end up over-served and not even aware of it, making it a prime focal point for discovering waste.

This technique is executed by marking down how you use all of your technologies, and marking down all of the ways the technology could be used, and then looking for opportunities to consolidate technologies so as to maximize the services you can get from as few products as possible.  As an example: there are many solutions that incorporate SDWAN and Firewall features into one single product. If you’ve got an SDWAN router on your network, do you truly need a separate Firewall or other routing equipment? In some cases, you certainly might, but there will be other cases where you find that you can consolidate down to just the single product to serve multiple functions.

The secret to this tactic is the clarity brought about by quantifying the ratio of Resiliency to Redundancy on a device-by-device, product-by-product level. Resiliency has to do with survivability and being able to continue when otherwise impacted, whereas Redundancy has to do with duplication, usually to some level of excess. In many cases, a certain level of redundancy is necessary to achieve a viable level of resiliency. Data backups, secondary circuits, and cold-spare routers are all examples of necessary redundancy. However, if those data backups are kept on-premise, if those secondary circuits are kept on passive/standby, or those cold-spare routers could be set up in a High Availability configuration, then you are carrying more redundancy than necessary for the level of resiliency you gain, and that is where waste or risk occurs.

Only by knowing what each component is capable of, and purposefully selecting what each component actually does, can you be certain that you’re cutting out as much waste, and recovering as much of your spend, as possible.

Of course, if you want the results of this technique without the effort, you don’t have to wait until you have time. Give us a call and we can help.

Keep Your Team – Reduce Waste – Get Smarter Solutions

No one would argue that it makes sense to stop paying for unnecessary resources, but when was the last time you reviewed your service provider bills and confirmed that you’re actually using everything they’re billing you for?  This technique is about taking some time to do just that.  First, you need to start with a set of complete bills from your service providers.  Whether you’re reviewing network services, mobility, infrastructure, app licenses, or your phone system etc., each bill will break down, to some degree, the components you are being charged for. List these components out, and create an inventory of your services. For network services, you’ll end up with a Circuit Inventory. For mobility, you’ll create a Device Inventory. Infrastructure will result in a Machine & Workload Inventory. Inventorying your phone system results in an Extension Inventory (and a Card/Module Inventory if you have an on-premise PBX) and so on.

The next step is to review each of these components, and determine what function they perform for your business.  Obviously plenty of resources will turn out to be necessary, for any number of reasons.  That’s perfectly fine.  What we’re looking for are entries that have either A) no purpose or B) a purpose that does not benefit the business.  A phone line that is not answered by anything. A mobile device that has not been assigned to anyone in over 90 days.  A virtual server that was built to support a now-completed project.  Voicemail boxes for an employee that left the company over a year ago.  If the service doesn’t truly serve you, then it should be marked on your inventory document for removal.

The third step is to actually go through the process of notifying your service providers to remove those targeted services.  If your services are under contract, it’s important that you understand whether you have a Business Downturn clause (and its specific terms, if you do), or whether there is an amount of flexibility inherently within the contract (is there a percentage of spend you can drop without triggering early termination fees?).

The final step (and this is where many fall short), request confirmation when the billing will stop, and make certain you get a confirmation number to follow up with later.  Set reminders for yourself if you need to. If you continue to be billed after the stop date, the confirmation number will be the proof that you did your part, and should be credited back. If you do this periodically you’re almost guaranteed to find waste.

Given your other responsibilities, this may be more than you want to take on right now, but that doesn’t mean it has to sit and wait.  Send us one month’s worth of invoices, and let us help you assess the purpose of your resources, and we can even deal with all the communication and follow ups with your service providers for you to ensure you eliminate the waste before you have to cut payroll!

Keep Your Team – Reduce Waste – Get Smarter Solutions