Archive for January 6th, 2009

Let’s take an individual look at our “5” procurement goals or resolutions for the New Year.

Tuesday, January 6th, 2009

In yesterdays blog post, we indicated that we would focus on each of the five goal areas or procurement resolutions for 2009 in more detail. Today we begin by looking at ways to use new technology to save money.

Every year companies spend millions of dollars on new business plans for the upcoming year. In fact most of the fourth quarter is focused on this endeavor. So, there is no excuse for not having your goals written down. The first step to an achievable goal or resolution is to write it down. As such our second resolution from yesterdays post for 2009 was to “Look at ways to use new technology to save money. New open source software applications mean you don’t have to shell out a ton of money for license fees.”

Your current e-procurement solution provider if using current technology should not have to charge you an arm and a leg for using their application. In fact, your prices should be going down. The need to pay increases in license fees or use fees today to have software installed behind your firewall or in a hosted environment is being reduced dramatically as a result of lower development costs for newer versions of applications based on the use of inexpensive or in some cases free open source tools that are being made available on the internet. The resulting applications are then being offered in the form of Software as a Service or even newer buzz words such as cloud computing as usage fee based solutions.

Companies can begin to seek lower fees by simply asking their present provider why their costs have not dropped and are they growing or reducing their IT staff based on newer technologies. The size of this organization alone adds to your providers overhead and as a result to the fees you are paying for using their tools. If a current application has its roots in the 1990’s or prior to the dot.com bust you may well be paying more to use it as a result of the embedded cost to develop it. More current applications that use a variety of freeware tools make it possible for today’s developers to do several multiples of the work a single developer could accomplish as little as five to ten years ago.

Next generation applications should also include a level of inelegance that was not available five to ten years ago. Whether that is simple language versus HTML or the use of intelligent agents, the result should be an easier to use application resulting in shorter cycle times.

What this all leads to for the procurement knowledge worker are lower embedded development costs, lower ongoing support costs and more flexibility relative to customization requests going forward. The net result is that you should be paying less for better tools.

Have this discussion with your solution provider; it may save you thousands or dollars.

We appreciate and look forward to your comments