By Jeff Williams, Executive Vice President of Sales, Atlantix Global
Frank Kobuszewski, Vice President of Technology Solutions Group, CXtec
Our team had the opportunity to exhibit at last week’s Gartner IT Financial, Procurement & Asset Management Summit. The summit featured a very engaged audience – everyone there was looking to improve their technology strategies in some fashion.
We learned a lot and had numerous fruitful conversations on the responsibilities of financial and procurement professionals and the state of the IT industry. CXtec recently acquired Atlantix Global, and our combined vision allowed us to bring a unique viewpoint to each conversation we had.
The mirrored stories of CXtec and Atlantix – now united – provide a distinctive framework for the opportunities we envision for financial/procurement professionals. The two organizations have each been in business for more than 40 years, and both bring a deep understanding on how to maximize value in technology investments.
Here are several of the major recurring themes we saw addressed at the summit:
Many organizations don't perceive that there's one provider that can help with all of their ITAD needs – including globally. This is a challenge we’ve heard a number of times.
When organizations select ITAD vendors, they should consider the distribution channels that the vendor utilizes to move the gear. The vast majority of ITAD companies buy (or consign) hardware from the customer, and then sell it in big chunks to the broker/dealer community, albeit for lower margins.
In fact, a piece of hardware might be bought/sold two to five times before it reaches the end user, and this reduces margin or dollars back to the company selling the hardware. This is a common issue to be wary of.
In contrast, CXtec and Atlantix are singularly unique in that we have at-scale distribution channels to optimize for both dollars and velocity. No other ITAD company has a matured broker/dealer channel, high-volume distribution, and more than 100 end user reps helping maximize value for the organizations we work with.
We mention this only to help alleviate the uncertainty many organizations are facing with their global ITAD solutions. It is possible, by observing due diligence, to work with an able, reputable vendor who can provide ITAD services worldwide.
Plus, solid vendors like CXtec and Atlantix will even allow you to put credit on account when they buy your hardware. This creates the opportunity to reduce CAPEX on your upcoming projects.
We spoke to a number of folks facing challenges with OEM maintenance contracts. One organization we spoke with described how they pay for three years of Cisco Smart Net Total Care, yet they refresh a good portion of their network every 18 months to remain ahead of the security curve. This organization ends up wasting at least 40% of the budget they spent on the maintenance for coverage that they will never be able to utilize.
On the other hand, some organizations prefer to maintain their technology infrastructures longer than the OEM’s suggested refresh cycle. In this case, they wind up paying a high premium for OEM support that no longer provides the same value it did when their equipment was newer.
In both scenarios, the organizations could greatly benefit by considering third-party maintenance (TPM) as part of a hybrid support model. TPM programs offer significant savings and are customizable to your unique needs. In the first case, the organization could back some of their equipment with TPM (perhaps some of their edge components) on yearly contracts, saving significant OPEX each year. In the second scenario, the organization could switch over to TPM once their hardware is declared end-of-life by the OEM.
These tactics are backed by research by Gartner itself. Here are three quotes from the Gartner paper titled Competitive Landscape: Leveraging Third-Party Maintenance Providers for Data Center and Network Maintenance Cost Optimization, North America, July 2017 [ID G00327262]:
“Interest in hybrid-hardware support models, between an OEM and a TPM, has increased, with the OEM supporting newer, software patchable hardware, and the TPM servicing aging equipment.”
“Some enterprises consider the flexibility and customized support from TPMs as an advantage.”
“TPM contracts will offer customers an average of 60% savings off of OEM support list prices. However, depending on equipment type, location and product density, Gartner has seen that the range of savings with TPM contracts is 50% off OEM list up to 95% off OEM list.”
Having this information at your disposal increases the option you have when it comes to hardware support. You can find the right combination of OEM and TPM offerings to cover your unique circumstances.
- Guide: The Value of Hybrid Support
A challenge every organization faces is how to get their finance and procurement teams marching in lock-step with their IT team. Technology investments are being undertaken by departments across the organization, the IT team is being asked to implement and support them, and the procurement team is tasked with obtaining the goods and services at the best price.
Creating a synergy between all three has never been easy. But we all know an important first step is vetting out solid, dependable technology partners. It is imperative to have a relationship with an IT vendor with experience you can rely on.
Total IT expenditures continue to increase, but these days they are happening within business units around an organization, not just in IT. This causes reporting to appear flawed because IT is growing, but it’s not reflected in their budgets.
Now more than ever your relationship with reputable technology partners creates a roadway to success. We all need proactive partners with the depth of knowledge and experience to help grow our businesses. That’s a keystone to establishing a flawless relationship between finance/procurement and the technology teams you support.
The myriad challenges for financial and procurement pros are varied, but there are a number of opportunities at your disposal for creative ways to extend budget with proven quality solutions. The Gartner summit was proof-positive of this. We appreciated all the conversations and unique points-of-view we were able to engage in.
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