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”. Regardless of whether or not you have a formal RFP process, it is often at this point 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. We believe 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 cover the 5 steps you need to know, to negotiate the lowest possible price for the technology services and contracts you need.

Part 2 – Establishing Your Specification

The first step in controlling your technology procurement outcomes is defining your needs: being able to clearly state what you are trying to accomplish for your organization, and having an agreement on which voice will represent the organization. With that clarity will come an understanding of what behaviors need to change, and by what degrees, to drive the necessary results.  The next step in the process is defining the measurements for the future state of processes and technologies that will drive the correct behavior, more commonly known as “defining the spec.”

The most common mistake made when beginning to define specifications is to start by actually defining the specifications. If specs are the measurements for the end state, then we can’t define specs until we have defined the end state.  To do that, we have to build a complete demand model.  This includes taking stock of your operational requirements, and lifecycle deployment schedules, including growth and downturn projections. The goal is to build a “Year One Commitment” position. This will be key when it eventually becomes time to negotiate on contracts.

The second most common issue when defining specifications is to spend a lot of time carving out a “wish list,” or any other named collection of non-essential items.  These lists only add unnecessary time and complexity to the process. Having unusual or custom requirements is perfectly fine, but define only absolute requirements at this stage.  Doing so allows the upcoming and inevitable vendor comparisons to be standardized at the most essential layers.

The third most frequent pitfall has some overlap with the second. This occurs when you treat each component, be it an end-user, a process, or a technology, as being unique until every variable has been proven to already have been captured elsewhere.  Instead, the focus should be on templatizing as much as possible. Start from a default assumption that all end users are the same, and break out sub-categories for features or permissions only when unavoidable.  A highly templatized stack, be it a workflow or data stack, is not only easier to evaluate and shop for, but it’s also easier to deploy and maintain.

With the foresight of these common mistakes, it clearly behooves us all to take some time and clearly map out how the technology you are shopping for will interface with and change processes, people, and behaviors. Make sure you can clearly visualize how end users will interact with this system and how it will change the way they behave. Understand all of the actions and tasks that an end-user must be able to accomplish through this system. Also look at things from a higher perspective, and figure out how managers will use this technology on a day-to-day basis to improve business and measure the KPIs you’re looking to improve. If you can’t draw a connection from the use of or interaction with this technology directly to an improvement in your KPIs, then it’s time to reassess your objectives.

Beyond just using the technology, end users must also get used to the technology.  It’s important that we clearly understand how we will introduce the new technology into the current environment, specifically the migration process but also including how we will maintain, expand, contract, and eventually replace the technology. Make sure you understand who will interface with this technology, both in operational use and maintenance/repair. How will they attempt to use the technology? How will they respond to its interface? How customizable is it?  Make sure you’re clear on what systems need to integrate with this technology, and whether they are capable of that now, or if they need to be reconfigured/updated to support this change. Take time to consider what amount of customization, training, and ramp-up time this technology or system will require for it to drive the results you need.  Are you equipped to support the additional workload to implement these services?  If not, consider looking for an agent that can redirect your commission dollars into implementation services.

Next, make sure you understand what currently works and does not work with your current technology service, to the best of your ability to define. Are there features that users just never understood or picked up on? Are there features that everyone just absolutely loves?  Can you quantify the things that don’t work? If bandwidth is an issue, can you identify that 300% more would solve the issue? If you need to improve up-time, what is the specific amount of downtime you can tolerate?

Once you have those, you can finally begin to define the specific outcomes that you are going to shop for. Some products, quantities or other details may make themselves apparent as you’re defining the outcomes, but at this stage we should only be defining the outcomes we need. Some examples are:

• Increase bandwidth so that users are not experiencing congestion (quantified increase amount, if possible)
• Introduce circuit-agnostic resiliency (quantified allowable downtime)
• Reduce current cost per license for productivity software

At this time it is imperative that you still focus only on what is absolutely necessary. That being said, you should still also have a clear vision of what will be absolutely necessary for the near future, so make sure you include the correct growth capacities in your requirements. Do you foresee growth or downturn in the next 12-24 months? You may have multiple locations that need this service, but will you really be rolling them all out within the first year? Is this a change you expect will last a while, or are you predicting another significant change in the next 12, 24, or 36 months? By the completion of this step, you should be able to clearly define the specific outcomes you are looking to achieve with a technology review or change, and each outcome clearly tied to driving the KPIs you have identified.

If at this point, you know the products, quantities, sizes, and other specific details of the solution you’re looking for, now is the time to validate they achieve the right outcomes, and then go ahead and document them in your list of requirements. If you’re not sure what technology will bring the solution you’re looking for, that’s okay.  If you’ve got the support of an objective procurement expert, they’ll be able to assist you in defining the finest details of the specifications.  However, if you’re still not sure of what you’re looking for, and you don’t have the advantage of an agent in your corner, then the next step from here will be to gather information on various solutions, define the last of your specifications, and ultimately request pricing.

Keep Your Team – Reduce Waste – Get Smarter Solutions

Whatever your organization calls it, and however you measure it, one of the most important KPI’s in financial stewardship is cost. One category where many organizations spend a lot of money is network connectivity. We all need to be able to connect, but the added layers of technical complexity and slow responses leave many feeling like their service providers might be taking advantage of them. So let’s look at (among other benefits) how we can leverage network technology to reduce waste and ensure stewardship.

The Situation
Business has changed. Of course, “the way business is done” is something that is constantly evolving, and those changes are known to frequently follow shifts in technology. Certainly, the recent shifts in networking technology have greatly influenced business behavior. So much so, in fact, that the resulting changes in business behavior have demanded even further advances in technology.

One of the two most noticeable changes is that, for many businesses, data is no longer either on-premise or centralized. Instead of sending all branches back to HQ or to a datacenter repository, employees may be connecting to one cloud service for their e-mail, a second one for their CRM, a third one for webinars and video conferencing, and a fourth one for data storage, all while needing access to various web resources. Specifically because all of that traffic is now leaving the organization’s WAN, with the sudden shift to cloud-based services there is a parallel and proportionate increase to the strain put on the firewall. For a company that previously kept many of these services inside a private WAN, the requirements could exceed the firewall’s capabilities.

There is a significant force multiplier that is enjoyed by moving to the cloud. The readily available compute power makes true computational scalability a matter of a monthly subscription. In a way, this can be a double-edged sword. As power has increased, applications have increased their ability to consume greater resources. VOIP and video conferencing applications are rapidly rising in business use, requiring high bandwidth with high uptime and low latency, often needing an additional capability to prioritize traffic.

Not only are many key applications moving to the cloud, but, in a sense, so are the workers. The remote and mobile workforce is constantly expanding, and businesses expect this portion of their workforce to continue to grow. If we also include the multi-device users into this group, we can easily see the need for accessibility to any app, from any device, at any location. The balancing consideration to this is the increased need for security. With the idea of the “perimeter” effectively shattered by anywhere-access, there needs to be a strong means of authenticating and authorizing users, so as to reduce the chances of letting the wrong people into your network.

The other most noticeable change is the gap between broadband internet and private WAN services has become too great to ignore. When broadband meant 10M/3M of fluctuating and unreliable cable internet, then it made sense to pay 3x as much to get 10M/10M of guaranteed bandwidth. Now that cable internet can reach speeds of 1G/30M for roughly $500/month, dealing with a 10% fluctuation makes more sense than paying $1K/month for a 20M guaranteed pipe. Beyond that, broadband now also includes products like FIOS, ABF, and Fiber+, which bring fiber directly to the consumer, offering unguaranteed but symmetrical high-bandwidth internet circuits for hundreds less per month than their guaranteed counterparts.

The culmination of all of this is that an organization’s WAN now needs to be more accessible, more distributed, more secure, and more reliable than ever before, but it also needs to cost less.

Easy enough, right?

Through this series we will be providing many of the “Keys To The Black Box” that is SDWAN, so you can reach your organizational objectives regardless of whether you’re in the (re-)evaluating, deploying, or management stages of the SDWAN lifecycle.

Keep Your Team – Reduce Waste – Get Smarter Solutions

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