In our final webinar recap for Increasing Cost Consciousness: How to maximize efficiency while decreasing cost, we discuss our tactics when evaluating what products and services are worth the investment.
Assess business needs.
So just to kind of talk through our approach again without being too redundant, when we think about the business needs, the first thing that I would do with Eric or another counterpart as we’re looking at some, some purchase or expenditure, whether it’s a tool, a software tool or some service, is really what is the use case? How can we drive some cost efficiencies here? Will that use case impact any other parts of the organization? Can we get our biggest bang for our buck there? Does it drive operational efficiencies, save time and save labor efforts? Those result in pure bottom-line savings consolidation of tools. I know Eric and Michael both talked about this earlier, but there are synergies there where we can save money from an operations perspective just by moving to that one-stop shop.
One of the other big ones that I think goes overlooked every now and then is buy versus build. One of the pitfalls we usually run into is that we always want to build our own product, but taking a hard look at what the external vendor can provide in terms of the ability to support that product better than we could if we were to build it, the level of effort to build versus the simplicity of buying, but also the subject matter expertise that they have on their side, which we may not have in-house. So we have to consider all things when assessing the business need of that expenditure, whether it be a software tool or some sort of service.
The other thing that I think gets overlooked every now and then, which could be a light lift or could be pretty expensive, is implementation. Typically SaaS tools, including many of our own offerings, include some customization. It’s not a very extensive or heavy lift, but there are software tools out there, especially when you get into data migrations in larger projects, where the level of effort, whether it’s on external resources or internal resources, changes the priorities that you guys may be looking at in your project or other teams that are needed to assist. I’ve seen pro implementation projects for a new piece of software that we’ve looked at where they can range from three to five times the annual fee, a one-time fee in nature, but three to five times the annual fee that we would pay for software. So definitely something to consider as you’re looking at these projects in assessing your budgets.
Structure a good deal.
And the last piece is really just structuring a good deal. One of the things I was going to talk about is deal economics. When working with the vendor, how can you mitigate the cash impact for yourself? Obviously, there’s give and take there, but financing options are certainly something that we’ve considered and seen customers consider in the past. But there are also other incentives that are mutually beneficial to both sides. We’re always very open to multi-year commitments from customers or participation in a case study where it works beneficially for both us and the other party on getting their name and brand out there. So there are ways you can get creative with your CFO and your Director of Finance as you’re negotiating those deals.
Look for comprehensive tools.
I think there’s one other important thing to add, and of course, I’m coming at this from a zeros and ones perspective, but that’s also looking at the tools you’re going to choose for production and post-production and making sure they’re extensible, right? There are a lot of tools out there that say, we do X, Y, and Z, but when it comes to talking to a broader ecosystem or other leaders in the industry, they don’t. They’re an island. When you evaluate what tools to keep and what tools to use, you need to make sure that whatever you’re using can interop and work with the other tools you’re using. So when you have to use multiple tools, at least they’re talking to one another during that process.
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