Procurement versus Recurring Costs !

Procurement versus Recurring Costs

Why procurement won’t stop enterprises spending more than they should on technology services.

Procurement departments are hugely important to global organisations; they ensure that goods and services are sourced at the best possible price and benefit to the company. But procurement falls down when it comes to recurring costs, particularly when it comes to technology services.

Expecting technology procurement to have a long term impact on costs is like mowing your lawn once and expecting perfectly level grass for the next three years. Things will inevitably start to creep in. Billing errors (for the sake of the analogy we’ll call them ‘dandelions’) fraud/abuse (buttercups) and unused/underused services (a really big molehill) will all mean things will spiral out of control.

Procurement departments play a key role in driving down costs to provide necessary materials and services. But what procurement departments don’t do is check that their hard-negotiated rates are being reflected in their billing, or monitor the usage patterns of end-users to ensure services are being used efficiently, or at all. When an employee leaves, do you have a process to cancel their mobile contracts, or uninstall the ADSL line from their house? Are you recovering the handsets and tablets from those employees? Could you still be paying for the telecoms at your former premises? When an organisation hits a certain size, effectively managing technology costs becomes a task which even the most enthusiastic team of accountants couldn’t accomplish without undergoing several existential crises.

The answer to managing all these recurring technology costs happens to be another recurring technology cost– a Technology Expense Management solution (brilliant robot lawnmower). Fortunately, this recurring cost pays for itself over and over again. It allows companies to forensically check that each individual software license, call, text or byte of data is being correctly billed at the agreed rates. It provides the visibility to understand the total cost of technology services, and the technology needs of the organisation, creating a stronger bargaining position for future negotiations. It assigns the costs of each device to a person, department and office, and spots high-usage and no-usage outliers.

A TEM Technology Expense Management platform manages the complete lifecycle for enterprises’ technologies, including financial market data, telecoms, IT assets, cloud services, hosted applications, machine-to-machine and print expense management. A heavy focus on automation reduces the risks of human error and speeds up processes, through features such as Automated Invoice Processing, and eBonding, which expedites the process of ordering, cancelling and changing services.

Thanks to our friends at MDSL for the post !

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