Addressing your IT supplier costs
sharpening the pencil
In the current environment many IT departments are taking a careful look at their cost base.
In this piece we explore how to undertake the process in a fair and methodical manner, and we also address some common concerns.
“But we’ve already signed the deal”
We hear this a lot, and it’s a common misconception that signed deals cannot be touched. The truth is that with the right approach, deals can be re-negotiated, and quite successfully too. Turnstone regularly do this for clients, and have an 80% success rate on resolving the problems we find. More on these later.
reducing IT & telco supplier costs
IT and telco suppliers are often a large part of the budget, and one of the faster areas to address. In this webinar, we present practical approaches to cost reduction.
We look at the cost levers, which vary by technology type:
– Data centre / MSP
– WAN and more.
We provide real world findings of the common ‘red flags’ present in every IT contract. We finish with some evidence of successful mid-term re-negotiations, which strengthened the clients’ SLA’s and operational position.
Homeworking Ramp up: Supplier Lists, Negotiation Essentials & Market Intel
Due to Coronavirus the need to expand homeworking and related services is urgent – in response we are releasing parts of our knowledge base, to guide you in quickly making the best decisions for both the short and longer term.
In this first instalment, we address Security- as-a-Service, upgrading your WAN/SDWAN, and Laptops supply.
Outsourcing more elements of security is a growing trend, with many IT departments moving to a 24×7 capability to secure their businesses. The advent of large-scale homeworking may increase the attractiveness of using a third party to assist with some or all of the extra security workload.
Secureworks, DXC, Securedata, NTT Security, Getronics, Orange, ITC, Ultima, Trustwave, Redscan, Nettitude
Note: suppliers shown in bold support the MS Azure Sentinel platform.
Scope areas to consider:
As demand for network capacity increases with more remote working it is more important than ever to have flexibility in bandwidth. SD WAN and content acceleration can help with the class of service, reduce latency and enable scaling of capacity up as well as back down again.
It is a myth that a current contract cannot be re-negotiated and enhanced mid–term. Turnstone regularly and successfully do this for clients with their existing supplier deals – and there are always meaningful exposures to address (beyond the legal content). Read on to see our top 10 exposures.
Suppliers: Masergy, Aryaka, Versa, Fortinet, Exertis (managed SD WAN services)
VMware, Silver Peak, Cisco (SDWAN equipment suppliers for inhouse deployment)
One reseller reports that all laptop stock of Intel i3 and i5 machines are gone, and that’s it’s like the “wild west”. They go on to say that manufacturer delivery dates are not trustworthy,but that that some of the more expensive i7 and higher end mobile workstations are still available. With refurbished kit at the time of writing only the lower to mid range is available. Within the reseller market, lists are being published hourly, stock is highly volatile, so you will need to be decisive on what you want if stock does come up.
If you have recently bought new machines for Windows 10, and still have a stock of older Win7 machines, consider upgrading the OS to Win10. Most machines that can run Win 7 will manage Win 10.
Key points in SaaS deals
1. What is the client preferred method of charging? By usage, user count, fixed mthly fee?
2. What need is there for flexibility/ scalability – down as well as up?
3. What are the exit provisions, either at contract end or at termination?
4. Note: In UK SaaS providers which qualify as SME’s have statutory right to claim interest on late payments at a rate of 8% above the Bank of England base rate
5. What are all the cost elements – inc. the cost of data storage? Sometimes with a third party
6. What are the step in rights to the infrastructure supplier?
7. Is a Data escrow agreement required?
8. Is a Source code escrow agreement practicable for the service?
9. What hours of operation are needed 24 x 7, 12 x 5? What time zone, GMT, European, US.
10. Does the SaaS supplier take governance for the infrastructure supplier?
Contact us if you’d like to discuss more of the things to be aware of when buying SaaS services.
Market Intel & Tips
Vendor Management: flash survey
- You have a portfolio of >20 tech suppliers?
- Any contracts that have auto-renewed for 2 yrs or more without review?
- You would benefit from knowing a supplier’s product development roadmap?
- You frequently have to micro-manage a relationship e.g. invoicing problems?
- Contracts get forgotten about once signed?
- You are reliant on some suppliers but your contract terms with them are standard / poor?
- Any suppliers that deliver poor quality?
- Any suppliers with long-term relationships with your competitors?
- You have corporate pressure for better risk management and compliance?
- If you have answered ‘yes’ three or more times, it’s likely that some vendor management will improve your position and bear some real fruit
For a way to address the myriad of small but important tasks required to address this, click here.
“In addition to hardware, operating system software, and telecommunications equipment and services — information resources traditionally acquired in the marketplace — organizations now turn to outside providers for many components of their application systems, application development and integration, and a broad variety of system management services. Yet despite this trend, there has to date been little, if any, research investigating the IT procurement process.”
Robert Heckman, IT Today
Turnstone research shows that less than 5% of IT staff receive any formal procurement training, chiefly relying on their own particular experience. Considering that personal experience realistically covers a limited part of the market, and how fast the market moves, it makes sense to look at some staff training, to build on existing skills.