Archive for February, 2013

Reverse auctions will continue to drive consistent results over time.

Thursday, February 28th, 2013

Today’s post is from Ron Southard, CEO at SafeSourcing.

As spring training is now in full swing, let’s use a baseball analogy, you may not get the home runs and grand slams that you saw during your first and maybe second year implementations of this tool but with proper planning and execution you will at a minimum continue to beat market pricing. Think of it as singles, doubles and triples and sometimes a walk where you just hold onto what you already have.

In order for this to happen we have to understand how to conduct successful auctions in today’s business world and it is not the same old same old where the low bid always wins. The number one job of any business is to drive bottom line profitability. Because of this, companies that win your business during an E-RFX process need to make the business they have just won as profitable as possible. They may take your business during an auction as a loss leader in the hopes of increasing their wallet share with you over time. They may take your business at a loss in a down economy in order to drive cash flow to just as the song goes, keep on keeping on. They also will take actions during the next year or two to drive their internal costs down which will make your business more profitable to them. These circumstances means there is potentially more compression on the table the next time you go to market with their category. The why is actually pretty simple? Your new supplier wants to keep the business and the relationship, your old supplier wants their business back and other suppliers need new sources of revenue. What’s the math look like? Last year your vendor invoiced you for $10M. This year they have to reduce to $8M in order to remain your vendor because others are willing to take the business at this price. The question to your vendor is, would you like to lose $2M or would you like to $8M?

There are many other benefits to running these RFQ’s over and over again. A few are , new product offerings with better features, new suppliers that you are not aware of, suppliers you strategically did not invite the 1st time (if you want to know why, give us a call), existing products with new technologies and quality improvements to name a few. To support this, don’t sign contracts for periods of longer than two years, one if you can manage it or you will be paying too much by contract expiration.

If your e-procurement solutions provider knows what they are doing, reverse auctions can and should become a long term tool in your procure to pay tool box.

We all know that ball clubs that consistently hit singles and doubles game after game ultimately win more of those games. In fact a grand slam can’t happen unless there are already runners on base.  If you want to learn more about how to succeed year in and year out with this process, please contact a SafeSourcing customer services account manager.

We always appreciate your comments.

 

How many companies do not use e-Procurement Tools? If you don’t, do you want a FREE TRIAL?

Tuesday, February 26th, 2013

Today’s post is from Ron Southard CEO at SafeSourcing. I’m ofeering you a FREE TRIAL!

There is no doubt that for those companies that have not used e-Procurement tools in the past.  In fact, below the Fortune 500 level, it is possible that as many as 80% of companies have not used these tools, as they have historically been too expensive. There will be a continuing struggle to change the way companies operate and collaborate internally on procurement initiatives in more current and productive ways. However, with the advent of SaaS cloud based solutions like SafeSourceIt™, these tools are now available to any company, regardless of size, that wishes to use them. There really is no spend too small or category too complex to omit from consideration. Savings will always be available because there are always suppliers available that are interested in earning new business that you may not even be aware of. These suppliers are properly vetted and also offer quality services. In many cases these suppliers are also beginning to use these tools to make their sourcing easier and more cost effective. It would only seem appropriate that companies also hold suppliers accountable to share in those savings. Companies may not know who these suppliers are, but the use of tools such as the SafeSourceIt™ Supplier Database will help you find them, improve your processes and shorten your sourcing cycle. Your company’s profitability will also improve as a result. At the executive suite this is what companies expect and also what business and free markets are all about.

If you’d like to learn more about how these tools can provide your company with at least a 10 X ROI on your use of these tools, please contact a SafeSourcing customer services account manager. If you do, we’ll give you a Risk Free Trial  with event completion in under 30 days.

We look forward to and appreciate your comments.

 

Farming the Low Hanging Fruit

Monday, February 25th, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.

There are many companies with large supply chain/procurement teams that have spent years going after the easy cost reduction/increased value or low hanging fruit.  Many companies, however, even very large companies have procurement staffs with barely enough bandwidth to monitor a portion of the overall spend.  For these companies, the need to look at low labor areas of spend is crucial and is a great place to start to focus on, especially if you have a strategic sourcing partner to work with.

Standardize the specification – One way to quickly find ways to reduce costs, especially in companies where there many departments or locations, is the standardization of the basic purchases made.  By standardizing what your company buys you can achieve two things that will help in reducing cost.  First, you will ensure that groups are not buying at a price or quality level that is outside the norm of what the rest of the company is doing.  By standardizing the specification it is also easier to track how your company is doing against prices they should be getting.  This leads right into the second advantage which is being able to consolidate all of your spend in one bigger level that allows for stronger National or Regional contracts.  This may not add up to the company’s largest savings opportunities but they are not resource intensive and can be achieved quickly.

Quality Needs and Non-branded items – In the process of standardizing the specifications for low hanging fruit categories, another way to affect more value is to evaluate whether the items being purchased fit the true needs of the organization.  Does your company need a $2,500/month multi-functional device when a $1,200 one will do?  This is also a time to determine whether the need for branded items could be replaced with non-branded items.  The quality of non-branded items such as generic drugs, paper products, and small appliances has increased greatly in the past few years and because of that companies are beginning to look more and more to non-branded products for their business needs.

Suppliers: too many, too long – Maybe it’s not your products and services you want to change it is the fact that you have too many suppliers supplying the same thing or maybe you have a supplier who has been supplying you for years without any real accountability.  These are also examples of where a procurement department can get great increased value with little effort.  The reason for this is because you aren’t changing what you are purchasing and so you know the levels of spend and specification in advance.  Armed with that, it becomes a matter of consolidating your vendors or opening up the opportunity to new vendors as the case may be.  Either instance can provide very good results without having to change what you are purchasing at all.

If you are looking to put some attention on your low hanging fruit and find yourself without the resources to even go after that, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Managed Service Provider Offerings You should Consider – Part V of V

Friday, February 22nd, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.

This week we have been looking at the *MSPMentor’s Top 100 (actually it was the top 501) providers and the associated trends in this space among the suppliers and their customers.  In particular, we are focusing on the most commonly offered services and what they may mean to your company and its profitability.  Today we conclude the series by looking at the last three services.  Even though the percentages are smaller, these three services are ones that many companies are really beginning to look for.

Desktop as a Service (62%*) – Virtual desktops have been around for a while but many companies are beginning to leverage them in new ways especially as employees are using many different types of devices in their work day.  With all of the traditional benefits of a hosted solution such as managed maintenance, no hardware costs, managed backup and security, the big new advantage is the fact that employees can access their software applications, files and desktop from any web capable device from anywhere an internet signal can be found.  Trends indicate that this number will continue to increase as companies look to employ the capability in their business.

Hardware as a Service (62%*) – Hardware as a service has been a growing area for MSPs but is still yet to really become a consistently strong player everywhere.  Some of this has to do with the fact that not all hardware lends itself to the model, and some has to do with the fact that many companies are looking to spend more on software and services than they are on hardware.  All of this may change very soon as Amazon begins to introduce a concept with its Kindle Fire that looks a lot like the mobile phone industry where companies pay virtually nothing for hardware and upgrades while they continue to to renew their service contracts.  As this concept grows many new companies will be looking to leverage the service, taking the hardware and investing in the services and applications.

Managed VoIP, (47%*) – Standard phone services are becoming one of the hottest new services companies are looking for.  With improved hardware, data compression and cost effective bandwidth companies are beginning to realize how much more they can leverage with a managed Voice over IP phone solution.  Enterprise management, monitoring and control are just some of the benefits many companies are finding in this solution, making it an up and coming sourcing category.

To understand more about how we can help you find vendors to meet some of these needs, please contact a SafeSourcing Customer Service Representative.  We hope you have enjoyed this series on MSP popular services.

We look forward to your comments.

* Source: MSPmentor 501 Global Report, February 2013, all survey participants.

Managed Service Provider Offerings you should consider – Part IV of V

Thursday, February 21st, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.

This week we have been looking at the MSPMentor’s Top 100 (actually it was the top 501) providers and the associated trends in this space among the suppliers and their customers.  In particular, we are focusing on the most commonly offered services and what they may mean to your company and its profitability.

Mobile Device Management (74%*) – Technology has completely consumed us when there are more people that know what BYOD means than BYOB but the facts are we live in a world full of mobile devices that are ingrained into our lives.  These devices need updates and need to be secured for their protection and the protection of the company when they are connected to the network.  These are the services that many MSPs are providing and are considerations few companies have spent much time thinking about.  They have desktops and laptops secured but have given virtually no thought to managing the mobile devices that occupy their network.

Vendor Management (74%*) – Vendor management has been a popular service that many companies have been looking to MSPs more and more for.  National footprint companies in particular tend to think that they get good service when they let individual locations handle some services like janitorial or temporary labor services themselves.  The issue lies in how all of those vendors are monitored and managed to ensure that best practices and company SOPs are being followed.  This is just one way MSPs can help manage vendors.  Controlling rate cards, introducing new vendors and monitoring the performance of existing vendors are other important benefits companies can be looking to gain today.

Warranty Management (69%*) – Warranty management is another area that has seen great growth as companies are moving toward a ONE NUMBER HELP DESK.  This concept replaces people’s long lists of people to call when there is a technical warranty issue with just one number.  Companies like Fine MSP offer their customers better faster support in a much easier one-call fashion.  Having a 3rd party MSP handle your warranty calls means your staff can continue back to their normal jobs with the peace of mind that the situation is being resolved on their behalf.

To understand more about how we can help you find vendors to meet some of these needs, please contact a SafeSourcing Customer Service Representative.  Please check back tomorrow as we finish the weeklong series  on MSP Services Review.

We look forward to your comments.

* Source: MSPmentor 501 Global Report, February 2013, all survey participants.

Managed Service Provider Offerings You should Consider – Part III of V

Wednesday, February 20th, 2013

Today’s post is by Mark Davis; Sr. Vice President and COO at SafeSourcing.

This week we have been looking at the *MSPMentor’s Top 100 (actually it was the top 501) providers and the associated trends in this space among the suppliers and their customers.  In particular, we are focusing on the most commonly offered services and what they may mean to your company and its profitability.

NOC Services (80%*) – Virtually everything in your organization connects at some point to your network.  Those connections may be limited and have various levels of security but the connection is there nonetheless.  In the old days (read that early to mid 1980’s) network administrators would carry pagers with them at all times in case anything happened and the network went down.  Today dozens of MSPs are taking the burden of monitoring and troubleshooting problems on your network 24 hours a day.  Companies like INOC offer a variety of monitoring solutions to ensure your network is safe and running at all times.

Virtual Servers in the cloud (79%*) – With as many articles that have been written on the cloud and cloud based servers you would think this number would be at 100%.  In time, and as companies retire older servers and applications, the move to virtual servers is a foregone conclusion even if they don’t reside in the cloud.  The list of MSPs that offer this service is one of the fastest growing in this area as specialized companies like Inhost and  powerhouse ISPs like GoDaddy look to continue to offer their customers to services that provide all of the benefits of owning your own servers without the cost, staff or headaches.

Software License Management (77%*) – Similar to patch management, MSPs that provide license management partner with your company to accomplish three specific goals: reducing cost, maintaining legal compliance, and optimizing software use.   Working with their customers, MSPs who offer these services ensure that their customers have the licensing that really supports their use of the applications without overpaying for necessary licenses.  They can also recommend alternative licensing models to their customers that can decrease the load on their IT staff.  Companies like Flexera claim to be able to produce results that can drive 5-30% savings in annual software spend by helping their customers using these techniques.

To learn more about how we can help you find vendors to meet some of these needs, please contact a SafeSourcing Customer Service Representative.  Please come back throughout the week for the other top services we will cover in our Week of MSP Service Review.

* Source: MSPmentor 501 Global Report, February 2013, all survey participants.

We look forward to your comments.

Managed Service Provider Offerings you should consider – Part II of V

Tuesday, February 19th, 2013

Today’s post is by Mark Davis; Senior Vice President and COO at SafeSourcing.

Yesterday we touched on a report of MSPMentor’s Top 100 (actually it was the top 501) providers that was just released.  As part of this survey process MSPMentor also looked at some of the associated trends in this space among the suppliers and their customers.  This week we are focusing on the most commonly offered services and what they may mean to your company and its profitability.

Help Desk  (89%*) – Almost 90% of the service providers are offering their customers some type of held desk offering to augment the other services they provide.  In a space where companies are employing MSPs to help fill in the gas of their own staff it is no wonder this offering is so common.  While most MSPs are offering help desk services not all are equal in experience and quality.  Make sure you know the background behind MSP help desks you are looking at and ask the appropriate questions surrounding how they plan on servicing your organization.

Patch Management (89%*) – Patch Management is probably the most commonly offered MSP service that few people understand and at the same time it is constantly happening in their environments which is a good indication of how successful the process is.  The notices Microsoft provides, the badges alerts on your iPad and iPhone are all part of the automated Patch Process where someone or something else manages the process to keep your systems updated.  Companies such as SolarWinds have developed tools and companies help manage the many patches (OS, Virsu, Datawarehouse, etc.) the use in their businesses every day keeping them protected and current.

Managed Security Services (85%*) – Companies such as IBM, Symantec, SecureWorks, Dell and Trustwave all offer Managed Security Services and are considered “leaders” in the field according to a recent Forrester Research report.  The key to why these companies are so successful lies more in the way they partner with their customers on strategy than in the software and services they sell.  Cyber security in today’s world is so critical that many companies have chosen to partner with an MSP that has the expertise to recommend the best to protect them.  They also want a supplier who can look ahead and be proactive in their offering suite, allowing them to keep their focus on the core of what they do best.

To understand more about how we can help you find vendors to meet some of these needs, please contact a SafeSourcing Customer Service Representative.  Please come back throughout the week for the other top services we will cover in our Week of MSP Service Review.

We look forward to your comments.

Managed Service Provider Offerings you should consider – Part I of V

Monday, February 18th, 2013

Today’s post is by Mark Davis; Senior Vice President and COO at SafeSourcing.

Last week I attended the MSPMentor 100 Webinar that detailed the results of the 2013 edition of their survey on Managed Service Provider companies.  Part of the review process was to also touch on the most commonly used services from these suppliers and what you can learn about what your company needs to do to begin investigating ways to leverage those same services.

Over the course of this week’s blogs we will take a look at the top 15 services being offered by these companies with some background on each.  Some of these will be unique to the supplier offering it while others are things you can begin asking your current suppliers about today.

Remote Monitoring (94%*) – Remote monitoring and management (RMM) is the process MSPs use with IT tools to collect and analyze information and activity that is happening on a device or on the network the device is connected to.  These statistics help many MSPs not only to resolve issues remotely saving companies in costly site visits but it also allows them to proactively monitor situations before they become issues.  Of those companies using employing MSPs almost all of them are providing some type of RMM in their offering.   The obvious cost benefits and proactive approach are why many companies are looking to MSPs to augment their IT Staffs.

Managed Storage, Backup, Disaster Recovery (91%*) – Dropbox, Sharepoint, iCloud, and Amazon Cloud Storage are all companies/services that specialize in managing the storage requirements of individuals and companies.  This trend among MSPs is no different as 91% of MSPs are offering some type of managed storage for their customers.  The fact is that most companies do not have the staff, hardware or resources to effectively maintain their data in a way that adheres to standard backup and disaster recovery procedures.  By working with suppliers like Carbonite, companies can easily put a plan in place to protect themselves and their customers.

Managed Email/Anti-spam (90%*) – Like the protection of a company’s files, the protection, backup and disaster recovery plan for a company’s email is also critically important.  Many of the major Internet Service Providers provide managed Email services (including backup and disaster recovery services) but it is a growing area for MSPs as well.  The benefits from companies like Rackspace, allow companies the peace of mind that their email is protected without the huge costs of maintaining the equipment and software in-house, integrating with several mail programs include great support for mobile devices.

To understand more about how we can help you find vendors to meet some of these needs, please contact a SafeSourcing Customer Service Representative.  Please come back tomorrow for the next top services we will cover in our Week of MSP Service Review.

* Source: MSPmentor 501 Global Report, February 2013, all survey participants.

We look forward to your comments.

What are the benefits of being EDI compliant?

Thursday, February 14th, 2013

Today’s post is from Ryan Melowic; Assistant Vice President of the Procurement COE at SafeSourcing.

Wikipedia defines EDI as the following; EDI which stands for Electronic Data Interchange is the computer-to-computer communication of business documents between companies in a standard format.  It is a paperless way to send and receive Purchase Orders, Invoices, etc.  EDI replaces human-readable documents with electronically coded documents. The sending computer creates the document and the receiving computer interprets the document. 

Some of the benefits of EDI are as follows.

1.  EDI streamlines the process and supplies more supply chain visibility.

2.  EDI provides increased security

3.  EDI helps companies’ lower costs by eliminating manual keying which reduces labor cost as well as well as errors and double entry of data.

4.  EDI provide management the information they need to plan and make strategic decisions

5.  EDI standards are agreed formats and protocols that trading partners collaborate and agree to use when sending and receiving business documents.

Due to EDI data being electronic data, product sales data, product inventory status, demand forecasts and other metrics can be exchanged with the key stake holder automatically. This allows for better inventory management and tighter control on accounts payable.

If you’d like to learn more about SafeSourcing can help your company explore EDI implementation options please contact a SafeSourcing customer services representative.

We look forward to and appreciate your comments.

SafeSourcing is “OAD” Compliant!

Wednesday, February 13th, 2013

Today’s post is by Ron Southard CEO of Safesourcing.

A friend and customer that has been a CFO of a fortune 100 company and now owns his own business asked me the other day why our results are so much better than other sourcing companies. For the record, he has used and been exposed to many of these companies during his career. In fact his company’s primary focus today with his customers is focused on strategic cost initiatives.  As such we get to work together quite frequently.

My simple answer was that SafeSourcing is OAD Compliant! As you might imagine, I got that HUH look. I went on to explain that we have an Obsessive Attention to Detail or “OAD”. He simply said, can you give me an example? I went on to discuss how a company might source a service like temporary labor in the administrative space across multiple geographies and multiple job descriptions. We discussed the makeup of the job descriptions and the pay rates associated with those roles. By example I explained that most companies providing these types of services wanted to provide you an hourly base rate with uplifts for overtime, holiday and other related criteria. Further, I explained that the structure our event focused on an expanded list of job requirements so that our customer would not be overcharged as example for administrative support provided by an executive assistant when an administrative assistant was all that was called for. We further broke the rates down by geography, national upcharge, and unemployment tax and workers compensation by state. Most people are not aware that workers compensation rates are different by employer by sate based on their individual company ratings. I went on to say, another quick example might be someone wanting to source heavy duty pallet racking based on the current price of steel (Hint! Think Metal Indices) while overlooking transportation cost opportunities (fuel) as well as the services required (unloading) to deploy the end product across time and geography (local distributer).

Once my friend got the gist of what we were talking about, he asked me how we continue to insure that all SafeSourcing associates function in this way. The answer was simple. We demand it. Every category that we source goes through a thorough strategy development phase where our customer and our Procurement Center of Expertise associates educate each other. We use an internal process call Question AZ. That has nothing to do with the state of Arizona where I live; it simply means that we assemble a list of questions beginning with the letter A and keep adding questions through the letter Z until there are no more questions. Simple but affective We reinforce this internally with competitions on research, adding data to our WIKI and asking every associate to write a monthly blog on a category they are working on. All of this information is shared with the entire team regularly in debrief sessions. We always think through traditional sourcing methodologies, but leave room for thinking outside of the box. Just because someone has never run a category in a certain way does not mean it cannot be done that way.

My friend’s response was WOW! and last year he ran over 300 e-RFX events with us

The simple conclusion to the above is that you can have more advanced tools, more experienced people but if you are not OAD compliant you will never drive the same results that we do.

If you’d like to learn more about the SafeSourcing 6 step process that combines three distinct sourcing strategies into one event, please contact us.

We look forward to and appreciate your comments.