At the forefront of a global recession, where business forecasts are softening, but input costs continue to increase, clients are thinking about ways they can lower the burden without damaging their businesses and are turning again towards IT cost reductions as the preferred strategy as cost savings often come with no diminution of business value. Read our recent article, “The #1 Thing CEOs Can Do to Prepare for the Global Recession” for more context.
Increasingly, in the pursuit of IT Cost Savings, clients are looking for professional assistance to figure out how best to help them save. Our industry sub-segment of IT Cost Reduction specialists, filled with sourcing advisors, process procurement companies, consultants, resellers, analysts, legal firms, software tools companies, and other types of organizations remains nascent and not well defined. Having been doing this for 20 years (since 2002), negotiating well over $1 Trillion worth of contracts, and having helped clients extract well over $250 Billion worth of value, it's clear why we might see ourselves as the leader of this industry sub-segment as our performance numbers are unmatched, but that doesn’t stop anyone else from claiming they are ‘the best’.
Some of our so-called competitors apparently think it takes superheroes and tough guys to negotiate IT deals. Whether they are living out their childhood fantasies by dressing up as marvel characters or referring to themselves in the third person as the greatest negotiators of all time in their self-promoting vlogs, they are sorely missing the point (in our humble opinion).
Like Tina Turner said: We don’t need another hero!
In reality, we know that when supply-side opportunities intersect with buy-side constraints, a micro-market is created, and with the right market data, client-side knowledge, supply-side counter-intelligence, algorithms, automated tools, industry best processes, subject matter expertise, and skilled commercial and contractual negotiations assistance (all wrapped and delivered in digital framework to accelerate value and enhance quality), that market can be tightly controlled, and clients can therefore secure disproportionate value; that is they can pay far less, and get far more value than their peers. By working in three dimensions with a 360-degree perspective of the deal, we have helped our clients move way Beyond Thunderdome.
Client-side considerations such as business plans, use case scenarios, user demographics, infrastructure, and delivery mechanisms, combined with Supply-side considerations such as titles, versions, editions, quantities, product mixes, contractual frameworks, volume commitments, term commitments, and other incentives provide the variables for the calculus of IT Value Engineering. Similar to a Rubik’s cube, when you have this many variables in an equation, there are literally tens of millions of viable deal permutations, but there remains only one deal scenario that will provide the solution at the lowest possible cost: This is what we call IT Cost Optimization (e.g., there is only one of a possible 43 quintillion combinations when the Rubik’s cube is considered properly solved).
So, to achieve IT Cost Optimization, you need to have first mastered IT Value Engineering, and no ‘great negotiator’ with self-proclaimed commercial expertise about a particular supplier is going to have the mastery of IT Value Engineering unless they also have a deep technical understanding of the client-side of the equation, a vast understanding of the market dynamics that drive behavior and outcomes, and the toolsets needed to achieve the desired results. Absent any of these elements, you will quickly learn that your provider has no real ability to define or control your micro-market, and can only provide a limited capability. It’s like solving one side of the Rubik’s cube; while it might look solved if you only look at it from a certain limited perspective, everyone smart enough to know, knows that it's not solved at all; it’s only partially solved and all the hard stuff remains.
The moves needed to solve a Rubik’s cube are similar to IT Value Engineering, and the solved Rubik’s cube is similar to IT Cost Optimization. To be most effective in both cases, you need to be able to look at an unsolved configuration, figure out what needs to be done to solve it, work effectively and simultaneously in three dimensions, with the right level of expertise, making all the right moves to determine and then achieve the proper, fully solved solution.
While everything is important towards achieving the end goal of IT Cost Optimization, how you plan for, deploy, and consume has every bit as much to do with the overall value you’ll extract from the technology you acquire than what pricing discounts and commercial terms you’re able to negotiate.
Even though clients don’t generally know the hidden secrets about their suppliers, and no one client can see the market in a broad enough way to know the art of the possible, and clients generally have only a limited understanding about the dynamics of IT Value Engineering, some clients think they are smart enough to do this all by themselves, but this is where it pays to understand the potential force multiplier of partnership (as well as math) with a qualified provider such as NET(net). Suspend your disbelief for a moment and consider the opportunity to improve your performance by a mere 5%, and how that can lead to a 50% reduction of cost. See the related blog on how this is possible here.
While some so-called competitors try to make our industry sub-segment about their individual super-human capability, we remain focused on moving the entire industry forward with an unrelenting will to learn from our clients about how best to serve them to help them minimize cost and risk, and maximize the realization of value and benefit. We do that through our process of IT Value Engineering, and deliver that as the end result of IT Cost Optimization.
Different than most, we are client advocates (only) in that we take no money from the supplier community. This is of course significantly different than a re-seller who earns a percentage of your total purchase volume, or an industry analyst that relies on supplier funding of their ‘market research’, or a consultant that has an extensive commercial relationship with the supplier that dwarfs the size of your investment. Anyone who is claiming they can help you get the best deal with your supplier but is funded by the supplier is nothing more than a shill, and part of the technology cartel.
Anyone who doesn’t offer you a 360-degree perspective of your deal and work with you in three dimensions to (i) acquire the requisite client-side knowledge, (ii) deliver the proper sell-side expertise, and (iii) illuminate the appropriate market data is offering you (at best) a point solution that may address one of your areas of need, but certainly will not fully satisfy the full scope of service you need to achieve the highest levels of value, to say nothing of true IT Cost Optimization.
Take a look at our handy Top 10 comparison guide to see how NET(net) differentiates.
NET(net) can help you minimize costs and risks, while maximizing the realization of value and benefit of all your technology agreements, investments, and relationships, so if you are looking to improve operational efficiency and/or modernize your enterprise, Act Now.
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Founded in 2002, NET(net) is the world’s leading IT Investment Optimization firm, helping clients find, get, and keep more economic and strategic value in their technology supply chains. With over 2,500 clients around the world in nearly all industries and geographies, and with the experience of over 25,000 field engagements with over 250 technology suppliers in XaaS, Cloud, Hardware, Software, Services, Healthcare, Outsourcing, Infrastructure, Telecommunications, and other areas of IT spend, NET(net) has the expertise you need, the experience you want, and delivers the performance you demand, resulting in incremental client captured value in excess of $250 billion since 2002. Contact us today at firstname.lastname@example.org, visit us online at www.netnetweb.com, or call us at +1-866-2-NET-net to see if we can help you capture more value in your IT investments, agreements, and relationships.
NET(net)’s Website/Blogs/Articles and other content is subject to NET(net)’s legal terms offered for general information purposes only, and while NET(net) may offer views and opinions regarding the subject matter, such views and opinions are not intended to malign or disparage any other company or other individual or group.