Controlling Costs: A Year Into This
That could be light at the end of the tunnel. There is certainly the smell of rebound in the air. There is no question things are different; some thing may go back to normal, plenty will be changed forever.
Revisit. Rethink. Revise.
We are now almost one-year into this ridiculous pandemic. Who could’ve imagined anything this crazy and far-reaching would happen and last this long? There’s a buzz, a feeling, and it’s almost palpable. Is that… could that be hope? There is certainly the smell of rebound in the air. As talks of rebooting and restarting take root, executives are already feeling the pressure to optimize, reinvest, and continue to reduce costs to help keep their companies moving forward.
According to PwC, managing the financial impacts of COVID—operations, future periods, liquidity, and capital resources— are the main concern for 75 percent of CFOs. Early on, executives had been concerned about a global recession, reduced workforce productivity, low consumer confidence, and supply chain disruptions. It has been and somewhat remains a “wait and see” economy.
Seventy-four percent of respondents in PwC’s study said they are prepared for a potentially “significant” impact on productivity. 39% of respondents in PwC’s study said that if COVID-19 were to end immediately, it would take one to three months for their company to get back to business as usual. That sentiment is changing as executives have realized that business as usual will no longer be usual.
How are CFOs Responding to COVID-19?
“Cautiously optimistic” seems to be the theme for 2021, says most CFOs interviewed. Compared to early summer 2020 when sixty-seven percent of CFOs said they are considering canceling planned investments due to COVID-19, this is a big step in the right direction. At that time executives anticipated making cuts to facilities and general capital expenditures (82%), their workforce (67%), and operations (55%). Those cuts seem to be reversing with operational expenditures being the first to be revived.
What’s more, 53 percent of CFOs claimed that IT investments were in the crosshairs, while 25 percent were looking to reduce or eliminate digital transformation. And 15 percent considered reducing customer experience spend with just 2 percent looking to reduce cybersecurity spend. But it seems this is no longer the case!
Management is revisiting, rethinking, and revising the way they do things. 2021, while cautiously optimistic, will also be the year of reinvention. The pandemic shook many organizations to the core, breaking the bonds of apathy and compelling them to embrace radical changes. Many businesses are on the path to consolidate the previous years’ insights and accelerate response to new ideas and innovations and it seems a solid digital transformation strategy at its core. Much of that strategy will be to continue to find creative ways to cut costs without sacrificing technology itself.
Tips for Reducing Technology Costs
CFOs need to understand, though, that it is possible to reduce technology expenses significantly, while maintaining — and even improving —operational stability. Doing so could free more capital to spend on staff, protecting jobs, and preventing the need to part ways with top talent.
But relying on understaffed, overworked IT may not deliver the best results. Especially considering many of the technologies, strategies, and tactics fall outside ITs wheelhouse. This is where it pays to have access to an independent Strategic Partner and Technology Expert. With the help of Cloud 9 Advisers, consultants can identify possible areas of waste and strategically re-allocate funding. Cloud 9 can provide access to a variety of key suppliers and technologies to help with this process. Protecting these budgets will determine how companies spend these resources and ensure the best outcome for all involved.
Here are some recommendations that companies should consider during this tough time, and how Cloud 9 can help:
Leverage Technology/Telecom Expense Management (TEM)
Businesses have a rat’s nest of bills ranging from network, phone, mobile, and everything in between. With complex, cryptic, and hard-to-understand bills, businesses often spend far too much money each month on unnecessary telecom expenses that can be reduced or, in some cases, eliminated. It can be challenging for CFOs to adjust plans and eliminate certain technologies, though, due to limited visibility or insight.
Cloud 9 Advisers has several vendors that specialize in these areas. We have access to TEM experts that can help a company get its digital infrastructure ‘house’ in order by assisting them in identifying waste and prioritizing what they need to be using — making it easier to slash costs.
This exact concept also applies to corporate Mobile/Wireless plans as well. Sometimes referred to specifically as Wireless Expense Management (WEM).
Take a closer look at Corporate Mobile Carrier Spend
Company-provided mobile phone and data plans are easy targets for finding savings without changing carriers, contracts, or eliminating plans altogether. Data overages make up, on average, over 35 percent of a business’ mobile bill. You can fix this by either modifying the plan to accommodate the higher data utilization, or you can try asking employees to minimize their data consumption. Add to the problem a complete lack of billing transparency (you can’t tell if an employee is using their data on work-related activities or giving their phone to a child who is watching hours of Netflix and YouTube on the company’s tab).
One of the best ways to prevent employees from blowing through their data limits is to deploy a back-end firewall and traffic-shaping service that deploys directly into the mobile carrier’s network, giving insight to application use and allowing clients the ability to limit specific app usage to avoid expensive overage penalties without any changes to phones, plans, or SIM cards. This service integrates with the carriers directly so there is no reduction in performance of user devices like with other enterprise deployed options.
Other Cloud 9 vendors in Enterprise Mobility Management (EMM), Managed Mobility Services (MMS), and Wireless Expense Management (WEM) can provide incredible savings through mobile carrier management, cost optimization, in-depth tracking, daily/weekly/monthly plan optimization, and continual analysis of the overall corporate mobility environment. All of which can be done without changing the carrier, agreement, or service itself. These services are also budget-neutral where they only get paid if and when they have realized savings on your mobile carrier bill, then they’ll get paid from a portion of your savings.
Another option may be to switch to a Mobile Virtual Network Operator (MVNO). Unlike the “big three” these mobile carriers are not hindered by the limits of their own towers, coverage, and networks. Rather, MVNOs can utilize the networks of all three of the big-three carriers simultaneously. The MVNO is the mobile carrier from the customer perspective but MVNOs are able to pool minutes and data across all three major carriers and give you far more flexibility for each of your corporate mobile users. MVNOs also purchase enormous amounts of data and minutes from these main carriers at the wholesale-level, so they can pass on significant savings and unique plans to customers. Switching to an MVNO can often save customers 25 to 40% on corporate mobile plans.
Cloud 9’s in-house team of vendor-neutral mobility and IoT experts can help find the right options for you and the best vendors to fulfill the plan.
Migrate to SD-WAN and/or SASE Where Possible
Far too many companies are still using old, limited, and very expensive MPLS, Point-to-Point, and other legacy and carrier-based, WAN technologies where some will limit speeds to guarantee quality. SD-WAN can help companies leverage nearly any type of available connection, including inexpensive and very fast broadband connections, that emulate and often exceed MPLS quality, with massive increases in speed at far less cost. It accomplishes this by controlling and strategically allocating multiple connected links, for peak performance and maximum cost savings, across an entire global network. In many instances, it could make sense to replace expiring MPLS contracts that customers have with the large telcos with SD-WAN.
Some SD-WAN service providers can add their service to augment an existing MPLS network, increase its speed, agility, and uptime, and make the transition far easier when it’s time to dump the MPLS. Enterprises with a need for global WAN should especially pay attention to SDWAN and SASE solutions.
A relatively new term, coined by Gartner, Secure Access Service Edge or SASE (pronounced “sassy”) might be considered the next-generation of SDWAN, bringing with it a host of advanced security features. While SASE and SDWAN can exist separately they work exceptionally well together, like bread and butter. SASE is especially appealing to hybrid, remote, distributed enterprises. In addition to next-gen firewall capabilities, SASE adds a special gatekeeper where users and their requests for data will be stopped to check for correct identity and access. This gatekeeper is much smarter than a typical firewall alone and can deploy stateful filtering by examining the data inside the requests and make intelligent decisions based upon these values.
Cloud 9 employs a team of unbiased network, connectivity, and WAN experts to help clients sort out all the options, choices, variants, and vendors in both the SASE and SDWAN markets. Our vendors are Gartner quadrant leaders and others and thoroughly vetted and scrutinized.
For enterprise customers that still run on-premise PBX systems and trying to get the most out of those investments, it’s time to pull out that last bill. Session Initiation Protocol (SIP) trunk pricing has substantially decreased in recent years, providing another easy target for cost-savings. Cloud 9’s communications and telecom experts can help sort out the best options for you.
Explore Mid-Term Renewal
Another way to save money is to lock in today’s rates and by committing to a longer-term with a telecom provider. This is called mid-term renewal, and it’s a strategy that companies tend to overlook because they aren’t aware that it’s possible.
Cloud 9 Advisers can help negotiate telecom rates, positioning customers for long-term financial savings on essential services.
Across the board, IT departments are understaffed, overworked, and exhausted right now — working nights and weekends to keep employees up and running on remote networks. COVID has been a nightmare for IT staff. Yet, most companies can’t afford to hire more full-time IT due to the current economic climate.
One approach is to keep a small core of IT staff and then augment them with help from third-party managed service providers at a fraction of the cost. Managed services can be used for everything from helpdesk support to network security to WAN management. This is a flexible, affordable, and scalable approach to specialized help or for general, broad-based IT support. Cloud 9 offers a wide range of managed services from a robust portfolio of providers such as Synoptek, Thrive Networks, Quest Technology Management, Netrio, and Splice.
A Managed Security Service Provider (MSSP), as defined by Gartner, provides outsourced monitoring and management of security devices and systems. Common services include managed firewall, intrusion detection, virtual private network, vulnerability scanning, and antiviral services. MSSPs use high-availability security operation centers (SOC) to provide 24/7 services designed to reduce the number of operational security personnel an enterprise needs to hire, train and retain to maintain an acceptable security posture.
Most MSSPs go much further than just monitoring to provide full risk and security assessments, penetration testing, and remediation services. The MSSP can provide significant peace-of-mind to executives, get organizations compliant, and be a significant load off in-house IT that likely doesn’t have the training or expertise to perform high-level security strategies and tactics suited from many enterprises.
Re-think and Consolidate Maintenance Agreements
Telecom hardware and other system maintenance agreements typically arise once every few years. And while they’re necessary for system stability and performance, they’re also costly —and companies tend to pay far too much.
Consolidating multiple system maintenance agreements may reduce costs by up to 25%. Work with Cloud 9 to find appropriate third-party maintenance & support providers to consolidate agreements and improve terms and service.
Deploy Automated Assistants
As we mentioned, CFOs are looking to reduce Customer Experience (CX) spend to save money. However, this can be risky. Customers still expect reliable service, even during challenging times. Many recent surveys reveal that customers reward businesses that meet them when, where, and how they want. Customers want to look up, research, explore, and ultimately buy the way that best suits them, The demand for seamless service hasn’t gone away —and certain technologies can boost CX while allowing companies to re-allocate staff members to tackle more pressing needs.
Tasks like answering phones and chat help, for instance, can now be off-loaded using virtual live-answer receptionists and chat assistants. Sometimes referred to as an “answering service”, these automated assistants don’t come with any additional salary or benefits but come to you as a service and as a virtually unlimited team to provide 24/7 customer support by highly trained humans!
Other, more involved, considerations might be to look at Business Process Outsourcing (BPO). These services can off-load many tasks including customer service itself. Domestic and international staff augmentation is available by highly trained and certified professionals, medical billing experts, and even registered nurses.
Cloud 9 Advisers specializes in communications technology and solutions related to Customer Experience and Contact Center to help clients rationalize and reduce technology spending without sacrificing technology itself.
Explore the Internet of Things (IoT)
It may seem hard to justify spending money on new connected technologies right now. However, certain IoT solutions can prove to make a big difference in reducing operational costs, especially when deployed on a large scale.
For example, an HVAC & Refrigeration company that services restaurants and grocery stores may use connected sensors to monitor and control refrigerator and freezer unit temperatures and other critical metrics across all of its serviced customers — based on certain thresholds, the company would be able to better predict when units need maintenance, reducing the need for costly manual inspections and wasted truck-rolls, and greatly improved customer service.
Other examples include trash dumpster load sensors, moister, humidity and water leak detectors for a range of applications, and numerous “smart building” solutions that produce immediate and obvious cost savings.
IoT costs have also fallen in recent years, and connected technologies are now very accessible to businesses of all sizes and budgets. Making a small technology investment now could produce significant financial savings and ROI in a short time.
Contact our Mobility/IoT experts to learn more about creative ways to apply IoT. in your business.
It’s normal during strange and unusual times like these to be conservative, but it is clear at this point that the pandemic isn’t going anywhere and when it is finally over everything will be different in many respects. We can no longer consider it a temporary setback. It’s time to review, rethink, and revise. Even minor investments in smart innovations will make a huge impact.
A conservative mindset to protect spend and budgets is absolutely the right emotion; however, leaders that take this catalyst to find new and creative ways to accomplish critical tasks, saving money doing so, and enable their companies to take advantage of new technologies to make them more competitive will have powerful advantages over their competitors that attempt to survive the status quo.
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