New technology is fascinating. It improves efficiency, streamlines operations, and saves you money. While all of that makes investing in tech a wise decision, managing your contracts with a close eye is still critical.
Proactive management of your technology service contracts helps avoid financial surprises lurking in the fine print. This “devil in the details” is a common problem when transitioning to new technology — especially if you’re not quite familiar with the full scope of the contract. And without expert insight into your contracts, chances are good you’re missing key impactful costs.
Get to Know Common Tech Service Contract Challenges
While MPLS (multi-protocol label switching) is a tried and true networking technology that has powered enterprise networks for over two decades, the transition to SD-WAN (software-defined wide area network) has become more common as carriers are abandoning copper-based POTS (plain old telephone service) and moving towards fiber-based delivery. But this change in delivery comes with contract updates for the service carriers provide. Do you know what those changes are or their impact on your operations and costs?
Another common challenge: Retiring PBX (private branch exchange) and moving to SIP (Session Initiation Protocol) trunking for advanced VoIP (Voice over Internet Protocol) system capabilities to your existing on-premise PBX equipment. Again, you’re moving to new technology that will improve operations, but the contract details, even within the same provider, can be different.
In both scenarios, not paying attention to the specifics of your contracts can be costly — and you could miss key savings opportunities. What should you be looking for? To help you stay ahead of potentially creeping contract costs, a personalized technology expense management (TEM) audit can:
- Ensure your contracts are fully read and understood. An audit clarifies the fine print by providing an inventory of specifics, including details related to terms, pricing, and conditions.
- Review all contract specifics. If any contract stipulates that you must purchase a specific quantity of assets, licenses, services, or other components, especially to obtain a discounted price, make sure you fully understand these minimums.
- Provide expiration and renewal management details. You should have a good idea of the length of contracts, the expectations at renewal (when, how, and cost), as well as any type of renewal process that may be automatic.
- Assess all legal implications with new contracts. Don’t overlook the importance of gaining clarity into the legal components of tech service agreements, including expectations and the fine print about use and copyright. An audit provides guidance on what your role includes and excludes within any contract.
- Control contract accessibility. By seeing the big picture of a tech service contract, organizations can gain control of who has access to their contracts and, more so, who can make changes and upgrades to them.
When moving into any new contract, it is your responsibility to understand every component of the services provided. At the same time, you also need to be able to ensure services are applied to your company to gain the most benefit.
Why Contract Management Insight Matters
Small to mid-sized businesses account for about half of the $370 billion in overall tech spend across the industry, according to data from McKinsey & Company. Considering that there’s a lot of money on the line even if you’ve not reviewed and maintained your tech contracts year-to-year.
With expert, proactive TEM of new technology contracts, companies will see improvement in operations including:
+ Better productivity
New technology helps to build stronger businesses with better productivity features. That’s only the case when you fully understand what you’ve purchased, how to use it, and how to implement all of the added features you’ve invested in.
+ Competitive advantage
The investment in new technology can deliver an improved competitive edge for your business. But to make full use of that competitive edge, you need to utilize all components of your service and ensure that your staff and customers are getting the most out of it.
+ Cost management
Staying up to date on your communication technology contracts ensures there are no mistakes in costs, including:
- Initial spend
- Updates over time
- Expansion to meet growth demands
- Fees for nonuse, overuse, or specialized use
- Asset investment costs beyond what is expected
- Renewal fees
Any type of communications technology upgrade, whether internet, mobile, or wireless devices, comes with new contracts and fee structures. By proactively managing your contracts, you avoid the potential impact of a missed payment or a cost oversight.
+ Better collaboration
Proactively managing your contracts enables your business to focus on meeting expectations and ensures collaboration with the technology vendor to clearly define and optimize better service.
At SpyGlass, we give you the contract insight you need to know to help you save. It’s as simple as a SnapShot Audit.
Are you Ready to Take Control of Your Tech Contracts?
Start a SnapShot Audit to help you see the big savings.