Shared Savings Plans: Why They’re a Win-Win Proposition

By | 2016-09-20T15:40:00+00:00 September 20th, 2016|Business Continuity, Business Intelligence, Business Value|Comments Off on Shared Savings Plans: Why They’re a Win-Win Proposition

WARNING: You might become overjoyed by the amount you could save with a shared savings plan.

First, let’s break down the numbers.

A whopping 35% of telecom and IT invoices contain errors.¹ That’s about 1 in 3 bills that you’re paying incorrectly. What’s more is that Gartner research estimates that you’re paying between 22-26% more than you should be for your business technology.

Technology and telecommunications amounts to an average of 4 percent of most business’s annual expenses, and this percentage will grow since technology spending is projected to skyrocket over the next few years.

To get a sense of what you could be saving, we encourage you to do a little math. Say, for example, that your annual business expenses add up to $1 Million. That means you’re probably spending at least $40,000 yearly on I.T. But if you’re spending 26% more than you should be, as most businesses are, then you are over-spending by about $10.4K.

So why aren’t you jumping that the chance to drastically reduce your spending?

HERE ARE TWO REASONS WHY YOU DON’T HAVE A TECHNOLOGY EXPENSE MANAGEMENT PLAN:

You don’t have the expertise.

In order to effectively manage your technology spending, you have to have someone who understands corporate finance, the telecom and I.T. services your business uses and needs, who also has familiarity with the billing procedures of your I.T. and telecom providers. Trust us, the latter is never as straight-forward as it should be.

Who in your business has this expertise PLUS the time to apply it to invoice management? If you are like the majority of businesses, the answer is nobody.

Technology billing is complex.

We hear you on this one. Technology billing can be extraordinarily difficult to understand. You are often charged for immaterial services along with your hardware and other tangible assets. Plus, decentralized inventory, volume-based billing, and moves, adds, changes, and disconnects (MACDs) present challenges to deciphering your bill and reconciling charges with your actual usage.

HERE ARE YOUR OPTIONS:

  • You could do nothing. If you’re okay with wasting thousands of dollars, then just pretend you never read this post.
  • You can hire someone to do the work. Is someone in your organization capable of doing this? Great, you’re lucky! Pay them a salary and give them benefits to manage your technology. Just be aware there’s a pretty steep learning curve for understanding all of your org’s I.T. and billing. Also keep in mind that  I.T. Managers generally command substantial salaries.
  • You can outsource to an I.T. management agency. You can pay someone directly to do this work for you on a contractual basis. They may or may not save you money.

OR, you could make the best choice and:

  • Implement a shared savings plan with a knowledgeable consulting firm. In this case, you don’t pay anything unless you save money on your bills.

Okay, you saw that coming. Shared savings is in the title, after all. But we sincerely feel that this is the most expedient and cost-efficient way to manage your technology spend. So how does it work?

IT’S ACTUALLY VERY SIMPLE:

First, we audit your bill free of charge. If we find savings, we work directly with your I.T. and telecom providers to lower your costs and optimize your services. Then, after 6 months of consistently saving you money on your bill, we charge for half of the savings.

We don’t make any money unless we save you money. We do our utmost to lower your bill because we have skin in the game. And because our fees come out of the money that you’re saving, you incur no additional costs to your business. That’s a win-win proposition, don’t you think?

Visit our Shared Savings Plan page to learn more about the program and about our 25 years of experience in the industry. As always, please contact us with questions or to get started saving money right away!

Sources:

¹Donoghue, Kevin. “How to Manage Telecom Expenses: Six Things Every CIO Should Know.” eWeek. Sep 2010. <http://www.eweek.com/c/a/Enterprise-Applications/How-to-Manage-Telecom-Expenses-Six-Things-Every-CIO-Should-Know>