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.

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.

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?

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 line...to 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.

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.   

Tools & Technology - IT in 2013

Are you looking for a job?  Information Technology (IT) remains one of the leading industries for growth, which translates to new jobs for some, consistently from year to year. According to Computer World’s annual forecast survey, 33% of IT executives interviewed said they are planning to increase their IT head count in the new year (2013). The reason - skilled IT professionals are essential in driving business forward, from communications to applications, project management and technical support, with measurable impacts in productivity, profitability, and the viability of today’s business model.  

The top 5 most hirable IT skills are as follows:

1. Programming and Application Development
2. Project Management
3. Help Desk/IT Support
4. Security
5. Business Analytics

According to Computer World’s latest survey, 60% of IT executives plan to add programmers and developers in 2013, with 40% forecasting a need for new project managers, 35% expanding technical support functions, 27% adding security professionals, and 26% hiring IT professionals that can successful analyze the massive data collected.

“UNIX is simple.  It just takes a genius to understand its simplicity.”

– Dennis Ritchie

 “If you think technology can solve your security problems, then you don’t understand the problems and you don’t understand the technology.”
– Bruce Schneier

“The best way to predict the future is to implement it.”
– David Heinemeier Hansson

While LAC Group specializes in information management and not necessarily information technology, IT skills are helping our information specialists, librarians, researchers and the like edge themselves past the competition and are quickly becoming requirements.  View LAC Group's available jobs here.

Blog Reference:

COMPUTERWORLD: 10 Hot IT Skills for 2013, by Mary K. Pratt

"Work in the 21st century series" - Finding More Satisfaction in Your Work

Finding More Satisfaction in Your Work

The pressures of cash flow, job security, new technology, the ongoing financial crisis, and our rapidly changing marketplace can more than take their toil on today’s professional. How you handle the transition from home to the office and back home again, each day, impacts your performance, how you are perceived by others, and how you see yourself. Whether your full time job is finding work, or you work full time at one job or part time at two, the strategies for increasing your personal health and satisfaction at work are the same. Finding a healthy sustainable 24 x7 balance is the end goal for everyone.

Sleep

For some reason, as adults, we require our children get adequate sleep each night so they are fresh, invigorated and sharp at school. Yet, we often don’t hold ourselves accountable to the same standard of rest to maintain our edge at work. Sleep is a mandatory precursor for the brain to function at its best, no matter our age. When your body and mind are at rest, your body temperature and heartbeat regulates, your muscles relax and repair, your blood supply increases, hormones are released for growth and development throughout your body, memory consolidation occurs, and your body’s energy is restored. Sleep not only affects how you feel and function, but also how you look. While adult human sleep needs vary, the magic sleep number remains at 8 hours, throughout our lives. 

Eat

If you drove your car to work without gas, would you get there? While it may sound like parental advice, perhaps even trivial, skipping meals means your not going to be running at full speed. Simply put, food is your body’s fuel. Finding and maintaining a regiment of good sleep, and eating the proper quantity and quality meals for your body to run at its optimum are the winning strategies of Olympians, professional athletes, and just us plain old professionals.  

Exercise: Body & Brain

It only makes sense to maintain the best health possible for your body, since it is the carrier for your brain, the physical vehicle that enables your brain to function properly and move you forward. In addition, there are a variety of exercises you can do to take your own mental temperature, challenge, analyze, reflect and regulate your work identity, as follows:

1. Spend a half hour each day completely unplugged – no phones, radios, televisions, or “i-whatever”s. Sometimes your answers are screaming over the noise, but can’t be heard. Miracles and greatness are discovered in the quiet.

2. Make a tape recording of yourself during a phone call. Pay careful attention to the words you use (I, me), and how you actually sound. What do your spoken and written words really say about you? Our reality if most often a combination how we see ourselves and how the world sees us.

3. Journaling is nearly a lost art, but its usefulness is not. Keep a personal journal for self analysis, a place to download frustrations in order to clarify and release them, and a place to clearly and concisely document your dreams and goals.  

Blog Reference:

National Sleep Foundation:What Happens When You Sleep

AOL Jobs:5 Surprising Ways toBe Happier at Work, by Ashley Lutz