Thursday, July 25, 2013

Everything Information - Moving On and Out

I've had fun covering Everything Information. However it's time for a change, so this will be the last posting at this site. I'm taking this blog to the next level.

New Everything Information Blog - New Information Management Insights

Bookmark this link for future access: where you will find:
  • More input from the information management thought leaders and subject matter experts at LAC Group, and beyond.
  • Regular, rotating coverage on a variety of timely information management topics.
  • Trends, ideas and tips for managing and leveraging the tidal wave of information coming at you and your organization.
We'll be exploring everything about capturing, classifying, storing, researching and retrieving information in any format, physical or digital.

What Information Matters the Most to You?

I would love to hear from you about your information issues and interests. What's bugging you? What intrigues you? What do want to know more about? What question would you love to ask, but don't, because you think 'everyone' should know the answer?

How is your organization handling the information  tidal wave?

Go to our Contact Us page to give me your suggestions - all requests will be considered.

Thank you for your time and attention. Please follow me to: for more on Everything Information!

Tuesday, July 9, 2013

How is SharePoint used in law firms? Learn more at 2013 AALL Conference in Seattle.

We regularly get this SharePoint question from law firms, as well as businesses and other organizations.

SharePoint’s greatest advantage is that it can be used in so many ways, from collaboration to workflow to document management to creating intranets. Yet these general capabilities can also be a drawback, because features go broad but not deep. Using SharePoint for very specific requirements – as in law firm libraries – usually requires third-party add-ins or customization.

The 2013 AALL conference, in Seattle July 13-16, will include what they’re calling a ‘Deep Dive’ session into SharePoint on Sunday, July 14. 

At this session, you can see how SharePoint is being used in law libraries and by law firms. Nina Platt, who is LAC Group’s Senior Director of Legal Market Services and editor of the PinHawk Law Library newsletter, is one of the featured speakers at this session. She will provide some law firm library examples in her presentation.

For more information on this SharePoint Deep Dive Session:

Preview of SharePoint topics and speakers:

If you are going to be there and you have an interest in SharePoint, I highly recommend the Deep Dive session. And I invite you to stop by the LAC Group booth to meet Nina and our other law library and legal information management professionals.

If you can’t attend the show, I’ll be writing about it in future blog posts. 

Tuesday, July 2, 2013

Law Librarians Convene at AALL 2013 Conference

The American Association of Law Libraries (AALL) will hold its 106th annual meeting July 13-16, 2013 in Seattle, and LAC Group will be there.

The theme for this year's conference is 'Rethink your Value', and it leads me to think of the evolution of both AALL and LAC Group. AALL is more than a century old, founded in 1906. Eighty years later, in 1986, LAC Group was founded as Library Associates Companies. No organization can remain viable for decades without a continual rethinking of the value it provides. We started as a temporary staffing firm for the law library community. Today we are an international company offering a comprehensive suite of information management services to all kinds of organizations.

Law Library Modernization

We have witnessed how the role of law libraries has changed drastically, primarily due to digitization. Digitization has made it possible for volumes of legal information to be discovered in a matter of keystrokes. The next wave will come as legal staff and other users of legal information are empowered to add value, adding their own knowledge and making new connections. Law library modernization will continue its march from paper to digitization to digital asset management to knowledge platform.

Deep Dive into SharePoint

Perhaps nothing exemplifies the concept of a digital platform for knowledge and discovery like Microsoft SharePoint. LAC Group will participate in an educational session dedicated to SharePoint on Sunday, July 14. Nina Platt, our Senior Director of Legal Market Services, will be one of the speakers during this session, called 'The Ins, Outs and Abouts of Sharepoint'. Nina's law library, information and knowledge management experience includes strategic planning, project management, research management, contract negotiation and cost controls. She is recognized as a leader in the development of the law library of the future.

Visit LAC Group at Booth 425

We invite you to join us in the exhibit hall while you're attending AALL 2013. Our booth location is 425 and our law library professionals will be available to answer any questions about digitization, Digital Asset Management, library modernization, SharePoint and any other legal information topic. In the meantime, or if you can't be there, follow this link to learn more about LAC's services for law firms.

Tuesday, June 25, 2013

Avoid Copyright Infringement: Five Ways to Protect Your Business from the Consequences

Copyright infringement has never been easier or more tempting. Social media sharing and the demands of generating content for blogs, websites, and other forms of communication are too easily fulfilled with a simple 'copy and paste' function.

Because of this, rights and permissions management is becoming an important consideration. And copyrights and other forms of intellectual property are becoming more closely guarded and hotly contested than ever. For copyright protection in the digital environment, the Digital Millennium Copyright Act (DMCA) was enacted in 1998 to balance the interests of internet service providers and copyright owners when copyright infringement occurs online.

U.S. Copyright law provides remedies for infringement in the form of injunctions, impounding and disposition of infringing articles, damages and recovery of costs/attorney's fees. Legal costs can be high, especially for patents, which can run into millions of dollars. Copyright and Trademark cases tend to be less technical, yet even those can run into hundreds of thousands of dollars.

Companies are at greater risk, therefore it's important to implement safeguards to protect your business.

Five Ways to Protect Your Business from the Consequences of Copyright Infringement

1. Never allow employees, contractors or anyone working on behalf of your business to directly copy and paste or reproduce anything created by somebody else. While this should go without saying, it's better to have a clear written policy, particularly for those engaged in blogging, social media or other regular online activities.

2. Understand copyright law. It protects writing, photographs, drawings and other creative works. Copyright is automatic, but you have to register with the U.S. Copyright Office to sue someone who infringes on your rights. Copyright does not protect facts, nor does it generally protect underlying ideas. That means you can express your own thoughts about ideas and facts from other works. However, those other sources must be referenced and credited. For example, you could draw from one of my other blog posts as long as you give me credit, generally through a link to the original page.

3. Understand public domain. Public domain works are appealing because they are not copyrighted, making their use both legal and free. Public domain works are governed by authorship or age. Regarding authorship, everything created by employees of the U.S. government in the course of doing their work is in the public domain. Also, the creator of a work can give blanket permission for others to use their work. The concept of Creative Commons was developed for usage in these cases. Regarding age, works published before 1923 are in the public domain, however some exceptions do apply.

4. Understand Fair Use. The concept of fair use or fair dealing applies to teaching, critiques, comments (including those made online), research, reporting and other critical commentary. The purpose is to make sure copyright laws don't cross the line to infringe upon freedom of speech. It does not grant the right to use fair rule as a guise to freely copy and paste such commentary.

5. Establish policies, systems and tools to safeguard your organization from copyright and other IP infringement. Because individuals violate copyrights and legal use of other igital assets, it's important to have written policies, and to guarantee enforcement throughout the organization with technology and procedures to back them up.

LAC Group provides a comprehensive array of information and digital asset management consulting services, including rights and permissions management. The rights agencies we work with include ASCAP, BMI, MPLC, SESAC, and the CCC as well as similar agencies outside of the U.S. We provide our clients' users with a customizable branded web-based service that offers authenticated users access the means to determine rights and securely procure copyright permissions online. You can contact us directly if interested in learning more how we can help your organization.

Tuesday, June 18, 2013

Do we need a Digital Asset Management System? And other DAM questions!

Companies and other organizations that hear about Digital Asset Management (DAM) sometimes wonder whether they need a DAM system. (Just as they enjoy the word play of the DAM acronym!)

Since Digital Asset Management assessment includes lots of other questions, I thought I would address a few of them here. I welcome you to add comments regarding your own unanswered questions.

What exactly is a digital asset? 

A digital asset is any form of content or media formatted into a binary source, categorized into three major groups: 1. Textual content; 2. Images;  3. Multimedia.

Beyond these categories, the distinguishing factors include a couple of important caveats:
  • The digital asset captures information with value to the organization that’s worth keeping, using and reusing.
  • The organization has the right to use the digital asset. Since digital information is easily copied and replicated, this is an important factor.

How are digital assets used?

Digital assets are most often used in creative departments, yet digital assets have value and use in a variety of ways, especially in today's web publishing and social media era (however digital asset use is moving well beyond the creative space into all aspects of the business):
  • Historical purposes, for archiving information related to the timeline of the organization.
  • Branding purposes, for company logos, positioning statements and other brand information.
  • Marketing purposes such as collateral or images for use in blogging or social media.
  • Sales purposes such as standard sales presentations.
  • Monetization 
The list could continue on, depending on the nature and size of your organization.

What does a Digital Asset Management system do?

Digital Asset Management technology allows you to store digital asset files along with their metadata, or the ‘data about the data’ contextual information that can be mapped to a variety of searchable fields for fast, easy retrieval. These systems generally include security, rights management, support for a wide range of file types, advanced search methods and versioning capability.

What is the difference between Digital Asset Management and Content Management systems (CMS)?

Digital Asset Management focuses on the asset itself, including metadata or contextual information that enables logical storing and easy retrieval of the asset. Content Management Systems focus on integrating digital assets into content for publishing in the required media format, generally for web publishing though CMS can apply to other media as well. DAM systems store digital assets that are often used in CMS applications to create content, and the larger technology vendors include interoperability between them.

What does it cost the organization if we don’t have a DAM system?

Implementing a Digital Asset Management system can be costly, not only the technology itself but the processes and people to make it work. Yet the costs associated with not implementing a DAM system can also be significant:
  • Compensation for staff and outside vendors to create the digital assets.
  • Expenses related to the purchase of stock photography and other digital assets.
  • Time wasted looking for the assets, or not knowing of an asset that could be used.
Multiply this by days, weeks and months over many employees and the costs quickly add up.

Should we invest in a Digital Asset Management System?

This final question depends on how many digital asset files you have now, how much it’s growing, how they are being used and what you are missing out on by not being able to use these digital media files in marketing, sales, customer service, business development, product development or any other business function.

It’s often said that a digital file is only a digital asset when it can be easily found and used. Otherwise it’s just another collection of stored bits and bytes.

LAC Group offers a range of Digital Asset Management services, from the evaluation and assessment of needs to vendor selection and contract negotiation to permanent or temporary staffing for archiving, research and more. For those of you with DAM systems in place, we can counsel you on trends and best practices and consult with you to make sure you are getting the most out of your digital assets

Tuesday, June 11, 2013

Why Business Intelligence Matters, Part 2: Big Data

Last week I talked about the research aspect of business intelligence, saying that for the best researchers, look to librarians. Trained and experienced library science professionals know where to look and how to uncover the most salient information on any topic, including business topics.

This week I will talk about the other half of the business intelligence equation, the digital data itself. Business intelligence looks at both external and internal data, sources that are growing so fast and so exponentially that a couple of business terms—Big Data and Digital Asset Management or DAM—have been coined as a result.

Big Data and Digital Asset Management

  1. Big Data refers to data sets that are so large and complex that it becomes difficult to process and gain meaningful access to them using traditional data processing applications.
  2. Digital Asset Management is the process of centrally organizing and storing digital information in rich media formats like video, photographs and presentations.

How much data are we talking about?

  • According to IBM, 90% of the data in the world today has been created in the last two years alone. That equates to the creation of 2.5 quintillion bytes of data every day.
  • According to Mary Meeker of VC firm Kleiner, Perkins, Caufield & Byers in her latest release of her infamous ‘Internet Trends’ report, there are now 2.4 billion Internet users around the world and still room for growth.
Meeker's slide about the creation and sharing of digital information globally on the internet echoes the statistic shared by IBM:

While this refers to the world of internet users on the entire planet, more than likely the information being produced within the business universe of your company, your markets and your industry would show a similar trajectory.

Another interesting development shows an emerging class of ‘digital media’ which is data! In the context of her report, this data refers to user-generated content like product reviews and personal trip details or mapping info, most of which is being created on mobile device applications. 

Digital Information’s Exponential Growth: What it Means to Your Business

I can summarize these data trends into two key points:
  1. The potential of Business ‘Intelligence’ can never be realized without the ability to access all that digital information in a manageable, meaningful way.
  2. The ability to do Point 1 depends on competent research and organized systems and processes for storage and retrieval, aka Digital Asset Management.
Big Data and Digital Assets are at the core of LAC Group’s mission and purpose of helping our clients manage information in the most useful, economical and meaningful way.

The data show that we have a lot of work ahead of us!

LAC Group Research Capabilities

If you’re wondering where you can find a librarian for your business, LAC Group provides skilled, trained library staff on a temporary or permanent basis. Follow this link to read more about our Rapid Research Solutions.

Digital Asset Management (DAM) Capabilities

LAC Group can help you set up the right processes and systems to organize and archive your company’s digital assets for easy retrieval.

Follow this link to learn more about our Digital Asset Management services.

Follow this link to “10 Ways to Make or Break a Successful DAM Implementation”, an article in our latest newsletter by Phil Spiegel, our Digital Asset Management expert. (Or as we like to call him, our ‘DAM Director’)

Internet Trends presentation

 Follow this link to view Mary Meeker’s complete Internet Trends presentation.

Friday, June 7, 2013

Why Business Intelligence Matters, and Why Librarians Should Do the Research

Business Intelligence, often referred to as BI, is a worthy endeavor when done right.  BI incorporates systems, technology and processes that allow a company to gather, store, retrieve and analyze corporate data from all operational areas:
  • For CEOs, Business Intelligence plays a key role in strategic planning.
  • For CFOs, Business Intelligence supports financial processes like budgeting and forecasting.
  • For CMOs, Business Intelligence can reveal insights on markets and products.
I could continue through every business function, but you get the point. For all managers within an organization, Business Intelligence can help them make better decisions.

Business Intelligence Obstacles

The increasing volume and velocity of data being generated within even small companies has become overwhelming. According to IBM, we humans create 2.5 quintillion bytes of data every day!

Business Intelligence ResearchFor Business Intelligence, multiple software systems make it difficult to retrieve information for timely and meaningful analysis. Silos of information and corporate hierarchies make it difficult to get a complete picture. As a result, you have lots of information being generated and often not so much intelligence that really helps the business.

Even with Business Intelligence systems in place, technology can only do so much – the final link, and most critical one, depends on people. 
  • The right researchers who can process and retrieve data in a way that’s useful to decision makers.
  • The right managers who can use the information in a way that’s meaningful to the business.
LAC Group’s Business Intelligence services focus on the first bullet, a piece of the puzzle that is often overlooked and under-appreciated.

Why the Best Business Intelligence Researchers are Librarians

Why would you put a librarian on a Business Intelligence project? Because success depends on research access and discoverability of information, which is the primary role of librarians. LAC Group was founded as Library Associates Companies; we know the value that trained librarians can bring to corporations for Business Intelligence and other research requirements. We have developed a unique, multifaceted competency around that value.

Our core strength has always been information handling: acquisition, organization, delivery, dissemination and research. Our reference desk and research specialists are available for work in various arenas, including Business Intelligence. Our flexible staffing solutions and 24/7 virtual research support allow us to be responsive to any business need, anywhere around the world.

Business Intelligence: Real or Hype?

Business Intelligence has become a hot topic that has some companies implementing systems, people and processes to make sure they have it covered. Meanwhile, other companies wonder if it’s another business buzzword delivering more costly hype than real value.

I believe the difference between Business Intelligence hype and value lies in the people. Without managers who can glean insights and act upon them, there is no value. And without skilled researchers who can retrieve and deliver data in a useful way, the nuggets of information those decision makers need will remain hidden. 

That's why for your Business Intelligence project, consider adding a librarian to the project team.

Tuesday, May 21, 2013

Expense Reduction: Freight & Shipping Cost Management

Freight and shipping costs are expense reduction targets for most large companies and the “bull’s eye” for those involved in manufacturing, retail and distribution.

Freight cost management is a moving target that keeps operational managers asking:

  • Are we leveraging our buying power or fragmenting it across departments, business units and a variety of shipping, freight and other logistics providers?
  • Are we working with the right freight carriers under the right terms?
  • Are we being invoiced correctly and consistently for freight and shipping services?
  • Are we incurring rogue expenses outside our contracted carriers and rates?
  • How do our freight and shipping costs compare to other companies?

Meanwhile, shipping and receiving staff is dealing with day-to-day concerns like damaged freight, missed pick-ups and late deliveries.

Meeting Freight and Shipping Service Expectations at Lowest Cost

When it comes to freight and shipping expense reduction, LAC Group works with clients to make sure their service level expectations are being met at the lowest cost using a variety of mechanisms:

  • Basics – Identifying how and where to make adjustments by understanding what is taking the most time and where money is being spent on shipping and freight.
  • Contracts – Reviewing and analyzing shipping contracts to clarify complex language, flag potential problems and identify opportunities. Guiding clients through the contract process by negotiating directly with freight carriers and other logistics providers or making sure they receive the best terms and conditions.  
  • Benchmarks – Evaluating what our clients spend on freight and shipping in comparison to industry standards and other relevant benchmarks.

Reduce shipping and freight expenses saves our clients time and money, yet I think an equally important benefit they believe they gain is support. We make it our priority to care about their business. We give them peace of mind, knowing our people are educated and experienced in contract language and negotiations. We understand and apply freight and shipping benchmarks and standards that give our clients the assurance that their terms, conditions and service levels are at or above par.

Freight and shipping make up a considerable portion of the overhead expenses for many corporations; as such, they provide ample opportunity for expense reduction. And because of the dynamic nature of fuel costs and other transportation factors, even businesses that have been diligent about freight management can benefit from a fresh look, especially when coming from the objective and experienced eyes of the professionals at LAC Group.

Wednesday, May 15, 2013

Expense Reduction Series - Software Licensing
(And it's About More than Expense Reduction)

As more business software is available under a greater variety of licensing and delivery schemes, you would think that expense reduction for software licensing would be less of an issue.  After all, greater variety generally equates to savings, thanks to greater competition.

Unfortunately, that’s not the case. If anything, the demand for software licensing expense reduction is greater than ever, along with the need to implement Software Asset Management (SAM) plans and processes.

Software License Complexity

Software licensing has never been more complex or more open to misuse and misunderstanding. (We’ll get into software license compliance in a minute.)

The right to use a particular software application may be granted under an End User License Agreement (EULA), an enterprise-wide license agreement or some variation. The purchase may be transacted through vehicles ranging from complicated volume purchase agreements to monthly subscriptions for Software-as-a-Service (SaaS), also known as cloud computing applications and services.

Add further complexity, courtesy of the IT environment:
  • Business employees using some combination of desktop computers on a network, laptops, tablets and smartphones. 
  • Access to enterprise software, personal productivity software and mobile applications.
  • Don’t forget the access itself, with an alphabet soup of wired and wireless networks. 
  • Also don’t forget organizational size and structure, along with increasing mobility and work-from-home arrangements. 

Software License Costs 

All this complexity comes at a cost.

Every application, small or large, includes a software license that must be purchased and managed. Applications come from different vendors with different purchasing agreements and terms. And increasingly, employees using a credit card can acquire software applications directly, whether it’s a web application or a mobile app from the Apple or Google store.

While software-as-a-service is touted as an affordable software solution, all those dollars and cents add up quickly when thousands or hundreds or even tens of employees are buying them, sometimes in monthly subscriptions that linger on long after a need is met.

Software License Compliance

According to Gartner, 65% percentage of clients were involved in publisher-initiated software audits in 2011, a slight increase from 61% in 2010.

Gartner recommends the implementation of Software Asset Management (SAM) programs and other processes to mitigate the risk, financial and otherwise, of non-compliance. The risk involves not only the additional software license costs, but preparation time, potential legal action and lack of negotiating power.

More Complex Software Licensing = More Pressure for Expense Reduction + Greater Need for Software Asset Management

Clearly, expense reduction is not the only software licensing concern. With the potential for costly and damaging liabilities, more businesses are coming to us for advice and protection. We give them one-stop shopping and greater peace of mind by helping them remain in software licensing compliance, negotiate the best purchasing terms, manage various agreements and minimize the complexity.

Tuesday, May 7, 2013

Expense Reduction Series - Legal Research

Legal research is a key component of any law practice and a powerful tool in the hands of the best attorneys. Yet legal research is also laborious, time-consuming, and expensive.

Online services like Westlaw® and LexisNexis® have greatly streamlined and improved the legal research process, yet they can be very costly. And dealing with them isn't easy, as their pricing plans and policies lack the kind of transparency found in most online services today.

As a result, the cost of legal research can be one of the biggest operating expenses in large law firms, and it’s often second only to the cost of personnel in small firms.

What makes the expense of online legal research even more damaging to a law firm’s bottom line? It cannot be as billed back to clients like the old manual research time spent in a law library. According to a recent legal research cost survey reported on by the ABA Journal, more law firms are reporting that clients are either balking at or outright refusing to pay for legal research. 

Although legal searches now take a fraction of the time, they still require human intervention, and in the world of billable hours those fractions can quickly add up to big numbers. This becomes a perverse disincentive for performing effective legal research or subscribing to the best services, which can hurt the client and the firm alike. After all, good legal research can be crucial to attaining a more favorable ruling.

The expense reduction conundrum facing law firms today:

  • Legal research is a necessary expense that must be managed, yet legal research is a valuable resource that can uncover a ‘needle in the haystack’ precedent that makes a dramatic difference in the client outcomes, and of course, firm revenue.

The best law firms find a way to manage legal research expenses without hampering their legal research benefits and value. It’s the reason many have turned to LAC-Group. For a law firm, legal research expense reduction is a challenge of staying in business. For LAC Group, it IS our business.

Our Chase Cost Management (CCM) division works on behalf of legal and other business clients to find meaningful savings without compromising their service delivery or product quality. Our expertise in pricing methodology and thorough understanding of contractual terms of the major online vendors allows us to achieve significant cost savings for our clients.

That means even as law firms pay us, the savings more than make up for the money and time they would be spending otherwise. It's like the personal story I shared in an earlier expense reduction post about the savings I gain even after paying a consultant to help reduce my property tax burden.

And lawyers know better than anyone: Time is money.

Thursday, April 11, 2013

Expense Reduction Series - Records Management

Records Management or RM is the practice of classifying, storing, securing, and retrieving all of the records and intellectual properties of a business, from the time of its founding through present day.

In today’s environment, with so much of the business we conduct taking place in digital form, effective records management is even more critical than ever. Records include all tangible properties and born-digital information, and depending on the industry, can grow exponentially in workflow and operational costs quickly, especially for record intensive businesses like legal, medical, financial and government firms. Records may include office documents, legal forms, statutes and records, customer and prospect databases, applications, electronic mail and correspondence, digital reports, books and assets, and more.

Records Management (RM) is a growing expense area for many organizations.  The process of organizing, preserving and accessing records, in addition to becoming more expensive, has become increasingly difficult to navigate as new technologies and requirements create a constantly shifting environment.

LAC Group's Expense Management division, Chase Cost Management (CCM), can help all types of organizations improve both their pricing and RM processes.  With our Certified Records Managers, CCM understands that lower cost is only part of the equation; effective RM consulting must address risk and best practices.

Cost management, growth control and record reduction starts with a comprehensive analysis of all business assets, physical and digital born records, storage contracts, retrieval processes, user functions and service levels, growth rates and future needs.  Using a combination of best-practices, peer benchmarking, risk management, and advanced technologies, significant cost reduction and improved operational efficiencies are achieved.  Improved research results from optimizing RM not only translates to time (and money) savings, but improved service for customers by offering more access through a faster and easier interface.

For our legal clients, records governance policies and client guidelines are of paramount concern.  Cost savings goals must be viewed in the long-term, as there is a substantial risk that evolving confidentiality and data privacy policies can result in higher costs if addressed incorrectly.  Seeking a consultant that will both address costs as well as make sure a contract aligns effectively with your organization's governance policies is essential.

What challenges are you facing with your records policies?

Friday, February 22, 2013

Expense Reduction Series - Office Supplies

The term “office supplies” encompasses a wide range of materials used by business owners and their employees during daily operations.  Office supplies are tax deductible expenses classified as a “Cost of Operations” on a company’s Profit & Loss Statement and annual Federal Income Tax Report.

Office supplies include: pens, pencils, highlighters, staples, paper clips, print cartridges, copy paper, envelopes, file cabinets, labels, notebooks, file folders, scissors, erasers, tape dispensers, calculators, USB drives, and more.

While the internet has drastically reduced the need for many of these items, most notably paper, office supplies remain a necessary and recurring expense for businesses.  Although online purchasing, usage contracts and discounts help to control costs, many businesses do not work within a specific budget or from a written procurement plan.  This often results in individual office supply orders adding up unexpectedly and detracting from net profits. 

Chase Cost Management (CCM), a division of LAC Group, can help your organization reduce office supply expenses and implement a customized procurement strategy tailored to your budget.  CCM has specialized in office supply expense reduction for 14 years, and has saved its clients hundreds of millions in office supply expenses during that time.  Its current client roster includes law firms, corporations and academic institutions.  What I appreciate most about the CCM offering is that they have programs that address the needs of all organizations, regardless of size.  Whether you are paying retail or have a "great deal" with your current provider, you owe it to yourself...and your bottom find out if you have the best deal.

CCM also specializes in expense reduction in the following categories:  legal research, library expense audits, shipping, records, telecom, mailroom and software licensing.  Join me in the upcoming weeks as I explore each of these areas.

Thursday, February 14, 2013

Expense Reduction Series - Introduction

Expense Reduction is a prominent concern for every business; this is especially so when the overall economy stagnates, as it has the past few years.  As most of your know, LAC Group bought Chase Cost Management (CCM) in late 2011.  We have spent the past 18 months completely integrating services and expanding our expense reduction capabilities.

Allow me to illustrate and introduce my next series (expense reduction consulting) with a personal story:

Each year, I engage a consultant to fight my insanely high property taxes on a piece of land I purchased almost 10 years ago.  I don't have a house on it, don't send my kids to the local schools and don't spend time there.  The attorney works on contingency and charges 40% of what he saves me from the tax assessment.

The first year we went through the process, my wife looked at the consultant's bill and asked why we were spending so much, giving up what she thought we should we be able to accomplish ourselves.  And she was right...we could do it ourselves.  The question is whether we should.  The fact is, we are not tax specialists and we don't have the time to show up at several meetings with the county.  Even if we did, would we get the same results as our consultant?  Most likely we would not.  Our consultant has specialized knowledge, gained through experience negotiating taxes on behalf of hundreds of other clients, that we could not possibly hope to duplicate.  The bottom line is  that there significant value in having a specialist do the work.

This story is analogous to a problem LAC Group runs into frequently: we often encounter decision makers who are either skeptical of expense management services, or worse...afraid of them.  A librarian for a major law firm might wrongly see these services as encroaching on his or her territory.  She thinks “shouldn't I be able to better negotiate that contract on my own?  That's my business, after all; I should be able to get the best price without using a consultant."  The fact is, however, getting great pricing on vendor contracts is not her business; her business is running a library for a major law firm.  Could she get a better price than what is currently being achieved, maybe...even probably.  But she does not have the information that will allow her to get the best price.  Just as there is value for me in using a consultant to fight my property taxes, there is value in for her in engaging an expense reduction expert.  Her business is running a library; the expense reduction expert’s business is getting her the best price.

Many companies have come to rely on procurement as their internal expense reduction experts.  Procurement, in turn, sees expense reduction consultants as a threat, when in fact the outside expert can provide them with industry-wide information and battle-tested negotiation strategies that will help make them even more successful.  As a Chief Operating Officer, I have never faulted anyone for saying to me... "we got you the best price we could last year, but this year we saved you an additional 20%."

In many cases procurement departments have relationships with their vendors (i.e., vendor reps), and are in a sense are staking successful pricing on that relationship.  In many cases they will stay with the vendor, citing some compelling reason that they say overcomes pricing that – if looked at objectively - is simply too high.

We do a benchmark study for each of our clients, as the first part of our engagement, in order to demonstrate actual savings opportunities before moving forward.  In many cases the number is so big that some procurement professionals fear that it makes them look bad.   The smart ones don't...and move forward with the process - saving tens or even hundreds of thousands of dollars in a relatively painless process.

Managing a business requires not only the production, sales, delivery and service of your specific product or service, but the management of your business itself. As many struggle to keep out of the red, focusing on what you do best and using a strategic partner to address operational expense management challenges is one of the most important and best decisions you can make as a manager.  Whether that is as the manager of a department or as a C-Level executive.

Join me for the next few weeks as we explore some of the most common operational expenses that add up quick and erode profits.