Updated: Feb 23
The response to our last blog titled 2018 VENDOR NAUGHTY LIST was so strong, we decided to follow it up with suggestions to help IT deal leaders work more effectively with their key suppliers. It’s January, so we offer you a short list of 2019 new year’s resolutions.
For inspiration, we looked up the top five personal new year's resolutions around the world. They are:
Diet or healthier eating
Save more and spend less
Learn a new skill or hobby
OK, we all know that most new year’s resolutions are abandoned by February or March. And why is this? Because it’s hard to change our behavior. Yes, some resolutions will not be successful, but they certainly could be, if people work together and hold each other accountable. To that point, I submit that If you and your team do commit to the following resolutions, you will find yourself head and shoulders above your suppliers and your competition. Here are my New Year’s Resolutions for IT, sourcing, and vendor management.
For the sake of brevity, I've combined the first three into one resolution (diet, exercise, lose weight):
Get lean and mean - Reduce the IT run rate by 25%. Not possible you say? Then you must be using every piece of software in your environment, you have no shelf ware, your internal customers are delighted with all the technology and support from the vendor – and you are a picture of health (link to greening blog). If this is so, congratulations! No change necessary and you are prepared for any (fingers crossed this never happens) recession.
The next new year's resolution for IT deal leaders:
Save more, spend less - What large renewals are just around the corner – 6, 12, 24 months out – and have you reviewed them for renewal terms, growth, reductions? - On any new investment, consider if it’s the best deal for the organization. Is the pricing appropriate or has the vendor taken advantage of some internal need? Have you validated whether this pricing is competitive? How? Is there an existing product in your IT portfolio that does the same thing? Probably, but IT says they really really need this new one. Don’t do it!
The third and last of the top new year's resolution is:
Learn a new skill - For IT, procurement, and vendor management teams this could mean preparing for the next waves: M&A and AI. How is your organization going to mitigate the risk of a merger, acquisition or other change in control? (THE INSIDE STORY – GOTCHA -M&A IMPACT ON YOUR IT AGREEMENT AND WALLET) How will you harness the power of AI to keep pace with your competition? How are these vendors pricing new solutions? What pricing model do you need from your vendors to protect your organization if (more like when) AI solutions grow?
Imagine yourself a year from now, after you’ve successfully reduced your run rate by 25%, prepared for renewals and new expenditures early, and prepared your organization for the future. Yes, yes you can. Good luck. Call us if you need help.