So, we’re still dealing with a lagging economy. This is to be expected and it’s probably not going to change anytime soon. Heck, everyone seems to be waiting with baited breath (especially the media) to see just what kind of bold policy move(s) our country’s new leadership and administration are going to make after the 20th of this month! Even if some bold moves were made, it’s not likely to help any of us in the short-term (unless you are one of the lucky ones who could jet into DC and hold out your trick or treat bag), some moves may not have an effect until the next time we are talking about an election… Don’t kid yourself, the focus probably won’t be in the SMB space… No bailouts for those who really need it, those who really innovate without regard to the lobbyists, PACs, and committee members on Capitol Hill...
In the meantime, many of us in the technology space are getting used to the idea of a shrinking IT budget and jettisoning those projects and people that don’t show the potential for a short-term payback. In this economy, anything but cost savings, new revenue, and profitability falls on deaf ears; especially when it’s coming from the IT chief. It’s tough selling IT investments or a new technology to the business guys when they are being pressed to trim their sales force, cut expenses, but still deliver positive financial results and growth… Even tougher to go into the boss and say, “well, were keeping it up and running, but that’s all were going to do this year”. So what do you do now? How long can you keep wringing out the last drops of efficiency from your staff, partners, suppliers, ageing equipment, or, the outsourcing agreement you signed three years ago? Eventually, the rag goes dry; even more likely, the business models that justified your existing agreements are no longer profitable for the supplier and your costs are going to rise as soon as you open up the contract. What this all means is it’s time to re-evaluate your position with your partners and suppliers and start building some strategy around how you deal with them over the next year to drive cost savings. Here are some things to consider:
• You probably won’t get a better deal unless you can give them more business. See how the mean, lean, cost cuttin’ CFO feels about that answer… She will probably dismiss you to go figure it out…
• Don’t let a vendor wrangle you into opening up a contract early, unless you positively have to make a technology shift and you just can’t purchase needed goods and services under your existing contract, or, you are prepared to re-negotiate everything. It’s better to ask them for a SOA (service order attachment) or some other instrument that can be attached to an existing agreement to cover a short-term need, rather than open up a contract.
• If you have to open up a contract, be prepared to re-negotiate everything and put it all on the table. Don’t be afraid to hire a consultant to help you run an RFP process and be the hammer. Don’t be afraid to tell your incumbent that you can and will switch vendors if they don’t help you with “X”, or reduce by “Y” cost on a new agreement. A new, reliable vendor may be willing to off-set your cost of switching vendors by waiving install charges, or service charges for moves, adds, and changes just to get your business. This is especially true with telecommunication contracts.
• Don’t sign a long term contract. Even when the economy picks up, it doesn’t mean that your vendors/suppliers will be in a better position than they are now. If they are struggling, cash reserves will trend downward without new sales. They may have chosen to invest in a newer technology that they are having trouble selling and willing to deal to stay in the game with you.
• Always remember that you are the customer… Don’t be afraid to fire a vendor if they don’t perform to your expectations.
• Don’t be afraid to take a calculated risk with a smaller vendor, either. As long as you have the energy and time to manage them, it’s likely they will provide good customer service to you because you have just become their “whale”. Most will work hard to earn your business over and over. Relying on the old adage of “nobody ever got fired for buying blue chip” just may get you fired in this economy.
Lastly, do a security audit and dust off that BCDR plan. They go hand in hand... Security events can quickly develop into disaster events! If you have a BCDR plan, test it! If you don't, create one and integrate what you learn from the security audit. If you are riding old technology a little longer to manage the budget, you want to make sure that you back-up plan works when or if it fails. If the test does not prove effective and your audit has holes, you’ve got the baseline for your business case to move to a better solution, managed services, or a co-lo facility…
As an economist and a technology executive, he has spent his career working with Fortune 500 companies across the professional service, manufacturing, financial, advanced technology, and telecommunications sectors. He has extensive experience managing profit and loss operations, developing and adopting new technology, leading product launches, managing IT infrastructure, global network operations, and driving sales and marketing organizations towards excellence.
Buck is recognized as an exceptional leader with the demonstrated ability to manage internal and external relationships, solve business problems, and implement strategy that nets revenue and profitability. He leads by example and develops organizational capacity supporting high performance work cultures and customer driven environments. Buck can be reached via telephone at 513-583-1516 or e-mail.
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