Special thanks to Source One, a Corcentric company for this guest post.
Whether rapidly growing, looking to downsize, or simply looking for opportunities to cut costs, companies should look to right-size and optimize the products and services they currently use. As the term “right-size” implies, the process entails taking a deeper look at your IT and Telecom products and services usage and matching them to your needs and long-term objectives. Consider it similar to the process of cleaning out your closet to toss out clothes that, in the case of IT and Telecom, are actively costing you money even when they’re simply sitting on your shelf not being used to make room for new apparel that will ideally suit your style into the future.
Similar to cleaning out your closet full of clothes, approach your IT and Telecom account clean up from a needs vs. wants perspective. Begin the right-sizing process by thoughtfully considering what your organization requires and what would be simply “nice to have”. A Wants vs. Needs Assessment will set the stage for developing a systematic plan for targeting immediate cost reduction opportunities, as well as a more holistic, strategic roadmap to accomplish future objectives and maximizing services.
With a clear picture of what you want and need, you can begin to see how the vision fits with what you’re currently using. Usage requirements can play a big role in deciding the best approach to rightsizing your environment and choosing a solution that can support your objectives. In Telecom and IT, services are needed to sustain overall business operations where every user, location, or job function has a unique requirement. This means that the product(s), solution(s), and supplier(s) you pick will need to support ALL resources as you are most likely not going to purchase so many variations of the same service. For example, sales people do most of the traveling so their need tends to focus on portable services, like mobile devices and laptops, for internet and voice functionality; while production staff require access to internal files and systems putting more demand on the company’s networking technology and services.
Targeting Quick Wins
Quick finds – or “Quick Wins” as we procurement folk like to call them – are relatively basic services that offer diverse competitive supply base options, giving more leverage with incumbent negotiations and/or services where spend visibility is easily identified. In addition, any abrupt changes would not have major impacts to business operations.
A perfect example would be an optimization of mobility services. If your current program is a more corporate-managed approach and devices are company owned/paid for, a review of your usage profile can help you identify lines or plans that can be terminated or adjusted to better align with your needs and reduce costs. It is pretty easy to rationalize removing paid features such as a visual caller ID or navigation services in favor of the free applications available on most devices. Also, it is very common to forget to remove international services for users who traveled for a few weeks over 10 months ago and the feature was never turned off; or disconnecting lines for employees who have been terminated. Spending a minimal numbers of hours reviewing your organization’s usage could produce a substantial clean-up of your IT/Telecom spend and put you in a better position to consider a change in policy and potential shift to a BYOD or expense type model.
Planning for the Future
Once some controls are put in place and you have better insight into the category, you can invest in developing a plan to bring technology up to date, minimize and consolidate your supply base, implement compliance considerations, encourage long term cost savings, and bring your business into the future as requirements change. Long term considerations would incorporate sourcing engagements, full market assessments, proof of concept testing, and spending time with suppliers to identify best fit cost competitive solutions. Once these are defined, you can better assess your current state to determine if your existing infrastructure will not only support today’s need but allow you to grow into the future.
Engaging Suppliers
IT and Telecom providers not only love to talk about their products and services, but want to sell you the latest and greatest as they look to sunset old technology or have identified better industry practices to accomplish the desired end state. Engaging your suppliers early on will help you uncover information about what other businesses are doing, what the market is pushing along with technology roadmaps, ways to navigate your existing environment, overall giving you enough ammo to make an informed decision. What does that mean? Be honest and ask questions. It is critical to talk about your aches and pains like you would at the doctor so you can get some professional guidance as to recommended fixes. If you can cut through the salesy jargon and get real help, you will not only find a solution that suits your business but build real partnerships with your suppliers. Even if you retain existing services, suppliers can help find ways to optimize what is in place today resulting in more efficient use.
Selecting What’s Right for You
There are many activities and considerations allowing you to do your due diligence in aligning your Telecom and IT services to better suit your needs. Understanding existing operational encumbrances and restraints from a financial, resource, and timing perspective will help prioritize your efforts. You should first take advantage of potential internal resources, people and tools to objectively identify what efforts are needed in achieving your goals. Consider, for example, allowing procurement to take a strategic look and leverage sourcing professionals to expedite the process. These assets can bring perspective that focuses more on the process of how to right size by engaging the market in exercises such as benchmarking, RFx events, supplier vetting, contracting and negotiating, all of which are their area of expertise; while IT staff can focus on the function of the service itself and ensure no disruption to the business.
At the end of the day, defining the BEST approach for Telecom and IT departments to rationalize and optimize can be burdensome, timely, and costly if not thought-out both tactically and strategically. If a supplier or technology change is warranted, acting hastily can result in choosing the wrong partner, paying too much for service, or implementing the wrong solution. Therefore, consider all tools in the tool box and engage the experts so you can do your job more efficiently while reducing costs and making money for the company!
