How pursuing savings on technology distracts you from greater value.
A business technology savings strategy should be formed with a broader perspective so you can discover opportunities for strengthening your infrastructure.
Savings for business technology should be diligently pursued.
After all, increased efficiencies and continual reductions in unit costs are a key benefit of advancements in technology.
However, too many businesses get hyper-focused on savings and miss out on a broader, strategic approach that produces greater overall value for your firm.
To achieve strategic and operational benefit, an expense reduction strategy should include these two elements:
Aligning your savings strategy with your firm’s core strategic and operational objectives.
An in-depth understanding of the Total Cost of Ownership (TCO) of your technology decisions on all parts of the business.
1. Align Your Technology Savings Strategy with Core Strategic and Operational Objectives
As part of any technology initiative, these key questions need to be considered :
What are the company’s main objectives?
How does the existing infrastructure support these objectives?
What new technological advances could provide a strategic or tactical advantage for my firm?
How will a change in technology affect my customers and employees?
Your savings strategy needs to align with your organization’s core strategic objectives to achieve your business goals. Without aligning these two pieces, you could end up neglecting parts of your business and paying more for them later. If savings is a part of the core business strategy, then it needs to be built within the context of a bigger picture.
For example, if one of your strategic objectives is providing a more consistent, reliable experience for customers and employees, a more robust network built on SD-WAN technology is surely worth paying more for.
Furthermore, in a broader strategy, you can see how SD-WAN's benefits of increased revenue from customers and less downtime for employees outweighs the higher infrastructure cost. A siloed focus on technology savings would cause you to miss this opportunity.
2. Understanding Your Total Cost of Ownership (TCO) on Technology
Total Cost of Ownership (TCO) is a popular and effective approach for evaluating your company’s major purchases.
In addition to the cost of the service itself (i.e. the amount paid to a carrier for telecom and data services), TCO also accounts for the impact this service will have on other expense categories (either good or bad).
You need to understand the impact to categories like:
Lost revenue due to network outages, etc.
Once you see the full picture, the least expensive service might result in a higher TCO than a more expensive service. For example, the cheaper service might result in lost revenue or the need to hire more headcount.
One often overlooked way to reduce TCO is to work with a third party for business technology vendor management. Third parties who provide support such as contract governance, inventory management, post sales project management, ongoing support of billing, trouble ticket escalation, and contract renewals produce valuable, indirect savings not normally accounted for in technology decisions.
Create a technology savings strategy which delivers maximum value to your business.
Technology has become increasingly critical to the achievement of a company’s key strategic and operational objectives.
Aligning technology decisions with the company’s objectives and using a TCO approach to measure the economic impact of these decisions ensures the greatest value for the business.
However, the process of building a broader savings strategy puts a strain on IT resources. It also benefits from a qualified, outside perspective.
Serviam specializes in coming alongside expert teams like yours to guide you in strategy development and manage the vendor negotiations and necessary changes to your technology.
To find a clear pathway forward, schedule a consultation with us here at our website.
Serviam’s process is simple.
We listen and assess your unique telecom situation.
We guide you through a custom roadmap to better technological and contractual solutions.
We manage your transition so you have the best possible experience.
We stay with you to make sure your vendors continue to support your ever-changing business requirements.
Our Telecom and IT Vendor Management service goes far beyond managing costs or negotiating contracts. We guide you through a holistic, future-forward telecom strategy for your company and provide you with a long-term partner who manages your vendor relationships so you can focus on the road ahead.