Archive for May, 2009

It pays to compare; price benchmarking IT suppliers

May 26th, 2009

How can you ensure that your IT supplier is offering you their best deal and best prices/discounts? How do you now if they are giving you value for money? How do find out if they are already over-charging you for the products and services you have installed? According to Mark Bartrick, Managing Director of Silver Bullet Associates, Price Benchmarking is the simple answer. Many canny buyers get independent help to price benchmark Supplier’s proposals prior to signing, and they also insert clauses in their supplier’s contracts to say that they can undertake further price benchmarking exercises if they feel they are not getting value for money. They key for any buyer is to obtain independent advice. Make sure the price benchmarking company has no formal or informal ties to any IT Suppliers or you may find that their advice is tainted, skewed and unbiased. Some Industry Analysts receive significant revenues from Suppliers and have to tread a fine line between what they can and can’t say to their clients. You should ask any negotiation advisor or price benchmarker whether they are truly independent. If they are not, don’t hire them. Don’t hire a fox to look after your chickens!

Technology budgets in 2009: 3 ways to do more with less

May 18th, 2009

Economic conditions are very difficult for most businesses right now. And the pressure from Finance is always ‘can you do more with less’. If we put headcount reductions aside for a moment, the key surely is to find ways of achieving more with less budget, not doing more. So here are three ways that I see some of Silver Bullet Associates’ clients tackling this thorny issue.

1/ Leverage your current infrastructure. Make the most out of what you’ve got. Don’t rush to upgrade if you don’t need to. Review your asset register to see if you’re paying for things you no longer need or whether you can defer additional acquisitions if you have spare assets un-used in another part of the business.

2/ Renegotiate current contracts. Don’t simply let annual renewals happen but check the contract still accurately reflects your actual product usage; if it doesn’t, ask for a reduction. Challenge all your suppliers to come up with creative ideas that result in a net reduction in their annual support and maintenance costs. For example, if you have a core product that you’ll still be using in 3 years time, why not switch your annual renewal contract for a new 3 year fixed price deal at a lower annual cost? It’s good for you and good for your supplier as they get a term extension and a revenue lock-in for a longer period.   

3/ Wait for the best deal. Suppliers sales pipelines have really thinned out this year, so any deal still on the table has become even more precious. Find out when their financial year end is and use it to your best advantage.

Microsoft lays off 3,000 workers

May 11th, 2009

Microsoft laid off 3,000 workers last week in the second wave of a major reduction announced in January. And in a memo to employees, CEO Steve Ballmer said more cuts are possible.  “As we move forward, we will continue to closely monitor the impact of the economic downturn on the company and if necessary, take further actions on our cost structure, including additional job eliminations,” Ballmer wrote. In January, Microsoft had disclosed plans to eliminate 5,000 positions, more than 5% of the 96,000 full-time workers it employed at the time. And what about Microsoft’s clients? Don’t they all have pressures on their cost structures? Wouldn’t it be a magnanimous gesture if Microsoft were to cut the cost of their products and so provide financial help to PC users across the World?

Is cost reduction a four letter word?

May 6th, 2009

Yesterday I had lunch with a CIO of a large London based business. He was pleased with some recent savings Silver Bullet Associates had helped him obtain during a negotiation with a large database vendor and had been in touch with a business colleague in another firm to recommend my services. He was surprised to be knocked back with a comment that ‘we don’t want his sort in here’. In asking for clarification, it soon became apparent that ‘cost reduction’ had become a four letter word in his colleagues’ business after a large well known IT consultancy company had recently promised the earth and delivered nothing but a huge bill of their own. Unfortunately, this happens more often than you might think as many buisnesses get embarassed when expensive consultants fail to deliver cost reductions and so cover up the  short-fall with bluster about ’uncovering intangibles and adding value to internal processes’ etc. At the end of the day, the only real measurable is how much cost was reduced or saved. So yes, maybe cost reduction can be a four letter word, so long as the word is ‘save’.