CAN YOU BENEFIT FROM A SLOW ECONOMIC RECOVERY?
by Paul Kunze 11/30/12
As we go into the final month of 2012, two (2) major events are causing an impact on how we do business; the recent presidential election and the impending fiscal cliff that Congress is currently debating. While the total impact may not be fully understood until months into 2013, the immediate impact is uncertainty. Two common attributes of uncertainty in business are the slowing of employee hiring and reduction of spending, both CAPEX and OPEX. As IT is typically a cost center rather than a profit center for most corporate companies, IT is usually hit hardest during a slow economic recovery.
So, how can your company benefit from a slow economic recovery? Let’s analyze this question from three segments: the customer; the vendor; and the solution provider. For customers, this may sound all to familiar. You are being asked to do more with less – lower operating and capital spending while having a smaller number of skilled professional employees in your organization. Ah, the life of a CIO and IT Manager. With hardware and software vendors, any seasoned IT person knows the best time to buy is the last week of any quarter (especially Q4)….so much so, that it should be named Black Friday Week! Deals are readily discounted from all major vendors to suffice Wall Street. Some will even negotiate a buyout of current OPEX dollars to be put toward an end of quarter purchase. Others will include additional features to get you to “sign on the dotted line.”
But again, this practice is nothing new. IT buyers know panic sets in during the end of a quarter so they strike a deal assuming the cost is best during these times. When times are tough, product vendors participate in strange behavioral practices. What typically works as a partnership between the solution provider and vendor suddenly changes to more customer direct interaction. While sharing revenue with the solution provider is typical during good times, this mode of operation seems to go away during tough economic times as the vendor tries to capture every available dollar for the aforementioned Wall Street quandary.
But doesn’t having a direct relationship with a vendor benefit you, the customer? Yes, sometimes. If you’re a Fortune 100 company, the vendor will do anything in their power to provide a world class end-to-end solution, including deployment and support services, knowing that the revenue gained will outweigh the investment with an enterprise agreement. So, what if you’re not a Fortune 100 company? Vendors will continue to capture all available dollars at your expense. Vendors will parachute their “experts” in at bloated rates and high travel expenses. Direct support is offered at a higher cost than the solution provider. Sound familiar?
Is a product vendor a trusted advisor? Not usually. I said it….I put in print one of the most over-used terms in IT today – the “Trusted Advisor.” A solution provider is commonly referred to as a trusted advisor as the solution provider is typically the one that the customer will call when needing immediate help or assistance in researching and evaluating multiple vendors or need a resource who can jump in as one of your team members in a moment’s notice…..all without the pressure of an end-of-something product deal in which the customer must agree to purchase. A customer is a customer for life to a trusted advisor – not just a product purchase to make quota. Have you ever considered a vendor to be a trusted advisor?….Probably not.
However, a Trusted Solution Provider WILL lower your IT spending. While most vendors operate over-aggressively to chase quota during slow economic times, the solution provider operates with a very different charter and WILL lower IT spending in numerous ways. Providing highly certified engineers on project based work is more cost effective than hiring, training and onboarding new employees. Providing staff augmentation resources during hire restriction periods allows customers to continue to operate and maintain critical systems. A solution provider can provide managed services and support to keep outdated technology operational while a company waits for budget restraints to pass. And finally, a trusted solution provider will function as a negotiator between vendor and the customer to ensure proper product purchase and pricing – keeping the customer’s best interest in the forefront.
Yes, with a trusted solution provider, you can lower your IT costs. A trusted solution provider operates with a different charter; they are driven by customer satisfaction and built on reputation. Products come and go; solution providers are in it for the long haul. We work hard to earn your business every day and to keep you as a Customer for Life.