“Shaking The Couch Cushions For Found Money” – 10 Tips & A Case Study To Get Your Multi-Channel Customer Interaction, Contact and Collaboration Initiatives For Free

So you are the or CFO, CIO, VP Customer Service, VP Sales or COO of a $100m company trying to figure out how to capture the visible revenue and margin opportunity in front of you through new product, market or channel launch, meet the growing pressures to do something in social media, integrate that new acquisition and/or a need to support your growing mobile workforce (500 iPads and new smartphones will cost you nearly $1m plus another $1m in software apps and $1m a year in enhanced support capabilities and maintenance). Oh and who is paying for the upgraded infrastructure to deliver a bunch of those much lauded Cloud applications services that the CEO keeps asking about.

This document contains 10 of our 20-30 “tips” to find money in your current budget to fund these initiatives, i.e. complete them for free and a little real world scenario that indicates how big an impact it can have on you.

Customer Results considers this money “hidden behind the couch cushions”.

How big an impact can this have? A little while ago we helped a $130m technology services company making ~$9m in net income (or 7%) with $16m a year IT budget. They realized more than $4m in savings by reengineering their infrastructure and some infrastructure related applications after a 24 month acquisition spurt.

Based on some business cases we are working on they could either take that $4m as a ~44% increase in net income (with appropriate market capitalization impact) or they can use it to drive business expansion and long term scale and profitability:

–          $4m annual IT spend reduction of $16m annual IT spend including $8m in infrastructure spend is a 25% reduction overall or a 50% reduction of infrastructure spend.

–          New project portfolio funded is $12.5m capital for multi-channel customer interaction initiative spend ($2.5m a year on a 5 year basis) plus $1.5m in additional annual operating expenses (total $4m a year over 5 years).

–          Impact of these projects is $40m a year in increased revenues or $5.6m in net income (2X net income return on new investments in existing company structures

–          $5.6m is a 58% impact on $9.6m in net income

Forget IRR and TCO and whatever else you may want to call it  .. a simple 58% net income impact and 40% increase in company revenues beats a 44% increase in net income that would accrue by taking the savings as pure net income.

Wow !! A 58% improvement in net income for free (well there is a little work involved). You may not think you have that much to find in your budgets but you might be surprised. Maybe you could use that money in your business to launch a Social Media channel, initiate some service improving Collaboration initiatives, or fulfill some critical Mobility projects (see the iPad comment above).

Firstly a little open disclosure, we have worked as vendor technology sales people  and know that very few of them are incented to decrease their current revenues from you as a client. No matter how many times they use “Partner” on their PowerPoint presentations to you, no matter how much it might make their relationship “stickier” and deliver “long term lifetime customer value”. They will come up with the proposal to save money the day you threaten to move to a new “vendor” but not until and even if their heart is in the right place they may not be getting all the right information required to provide you the most effective budget model, it may even require more than one vendor to drive the savings and of course there may be contractual impacts involved (we were involved in a project where a Telco’s account managers would be punished through recouped commissions if a client terminated a contract early and so for 2 years they failed to move to a more compelling service). Finally it is not unusual for a vendor’s best talent to be dedicated to new client acquisition not to optimizing existing clients and as significantly our “sweet spot” of mid-sized companies does not always get the rock stars allocated to them..

Since I am sure you will have plenty of ideas about how to spend the money (if not contact us at Customer Results we have a few of those for you) here are 10 areas that Customer Results often sees companies paying attention to shake the money from the cushions:

1. Short term contracts for services which can be extended to longer term contracts at preferential pricing.
2. Infrastructure consolidations that can decrease per person and per unit cost.
3. Deploying new / advanced technologies (like SIP in the core) that increase flexibility, consolidate capacity usage and reduce per unit pricing.
4. Moving to new providers and even using the threat of new providers to move the current pricing
5. Consumption based payment models versus acquisition and commitment based payment models.
6. Steering traffic to more optimized channels improving channel support while reducing cost per transaction (self service knowledge base and social media launch reduces voice to voice contact center requirements and reduces cost of service by 30%).
7. Reconsideration of sourcing of key infrastructure components and IT support functions to reduce costs of support and increase quality of service.
8. In building to home worker transitions saving facilities costs and increase in tech support or sales close rates through better utilization of key personnel through collaboration platforms.
9. Reduced power costs (who pays enough attention to that but there are some massive opportunities there)
10. Budget impact of move from capital to operating expense based equipment and infrastructure models

And we have plenty more ideas if you need them. Happy hunting in the couch!