ChangeForge | Ken Stewart

How many times have you heard, “We need to cut costs.” How many times are you leading with a cost-cutting strategy in your talk-track?

There are only two ways to impact an organization’s bottom line:

1. Increase revenue without proportionally increasing costs, and
2. Decrease overhead costs with the focus of increasing profitability.

Innovations and disruptive programs can dramatically impact both, while taking your competition off guard. But you have to be paying attention to the bigger picture – influences impacting you and your customer. From economic conditions to technological advances, from global politics to currency rates, its about more than just what you sell; it’s about how what you sell can help your customer deal with their challenges and achieve their objectives.

Software as a Service (SaaS), server virtualization and data centers, managed services and outsourced print: All are very real opportunities driven by real customer demand – not speculative desire.

I call these opportunities leverage points. These leverage points speak to an underlying migration to reach utilization saturation, a phrase I’m fond of using to indicate a focus to leverage the economies of scale in order to drive down overall cost per transaction to a level that quite possibly could end around where in-sourced transaction costs might have been.

Jack Be Nimble.

As the nursery rhyme goes:

Jack be nimble,
Jack be quick,
Jack jump over the candlestick.

Adjust to change and offering value is a continual fight. All industries eventually face commoditization. Production at cheaper, faster, and better – at lower costs. Now we are no longer talking concepts of mass production at the factory level, but at the information level!

New York City found itself at the intersection of cost overruns and affordable, available technology to meet a need. According to a March 2010 article published by InformationWeek, IT commission, Carole post has orchestrated a massive data center consolidation. With a sprawling annual IT budget of $375 million, post is hoping to make a dent in their costs:

After a review of the city’s IT system, IT Commissioner Carole Post will oversee a plan to modernize and consolidate data infrastructure at more than 40 city agencies. The goal of the consolidation ” which will start later this year and consolidate 50 unique data centers into one shared system — is to lower the city’s cost of operations by up to $100 million over five years, according to Mayor Michael Bloomberg’s office. … Many of the facilities and their technologies are obsolete, and having to staff, manage, and maintain them is a drain on city resources.

NYC is a perfect example of a customer who realized the convergence of technologies offered them substantial savings. But look past the savings of energy and hardware. Do you see the competitive advantages offered in having a strategy that is focused on multiple facets?

Sure it can include cost savings, and this is a critical component to overcome the pain of change. However, it also includes components of competitive advantage – an ability to be nimble and shift gears quickly. Dave McClure, GSA’s associate administrator, recently weighed in on the General Services Administration’s (GSA) cloud computing services request for quotations (RFQ).

… [we are withdrawing the RFQ because] the purchase agreement was 11 months in the making, and that’s like 11 years in the evolving cloud market.

Business moves at the speed of information, and information now moves without regard for person, place or thing. Rather than solely focusing on cost-cutting initiatives with your customer, think how you can provide value by allowing them access to relevant information and an ability to apply it to their market – help them be Jack.

Ken Stewart’s website, ChangeForge, focuses on the collision between the constantly changing worlds of business and technology in an information-centric world. Ken serves on the board of the Managed Print Services Association (MPSA), an international industry organization seeking worldwide best practices for the managed print services industry, and writes a weekly column for MPS Insights. He is also the founder of Seeking the Son, and is always interested in connecting with you to see how he might help you.