Here are the key questions that a management team should consider as part of a focused cost reduction program:

– Have we set a target, and how do we know it is achievable?

– Do we require more transformational change?

– How quickly do we need to get the cost out? Next month? Next year?

– How can we align cost targets with organizational priorities?

– Can we dedicate the team to the project envisioned, or do we need help?

– What should our PMO look like (size, structure)?

– Have we considered what the necessary reporting and tracking looks like?

– Do we have a change management plan in place?

– Can we create a better cost culture going forward? How do we keep costs from creeping back in?

– Do we have the right team and leaders to get the job done?

That last question is one that management teams do not consider often enough. Most organizations have in-house resources that are very capable of managing day-to-day operations. Every organization has the potential to conduct audits of their billings, renegotiate their vendor contracts, and achieve some degree of significant savings. However, working with an outsourced service provider that brings a broader set of tools and experience to the team can often produce better results.

Outside experts have superior vendor management expertise, access to document management technology, and an understanding of benchmark analytics that vendor management staff would rarely be able to acquire on their own. Bottom-line: implement a strategy, challenge the status quo, and make sure you have the right resources in place to optimize your profits.”

Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA, saving them millions in costs.

Through our Billing Optimization and Vendor Management Solutions proprietary platforms we utilize technology, processes, expertise, time, and resources to improve our clients bottom-line. Limitless Technology manages your vendors, so you can manage and grow your business.

Because at the end of the day it’s how profitable you run your business that truly makes the difference. Those individuals which understand that both top line revenue and bottom line profits are equally important in every business, truly separates great leaders from mediocre ones when it comes to running a profit driven organization.

Cost reduction is important in business because it directly impacts the bottom line at no cost to an organization. (Unlike sales, which has direct material, labor, facilities, marketing, commissions, management, and administrative costs). By reducing costs, a company can increase its profitability and improve its financial health. This is especially important in times of economic uncertainty or when facing increased competition. 

Additionally, cost reduction can help a company become more efficient and agile, allowing it to respond more quickly to changes in the market. While top line revenue is important for growth, it is not sustainable if costs are not managed effectively. To draw an analogy, simply put “why would you place water into a leaky bucket?”

Therefore, a true balance between revenue growth and cost reduction is necessary for increase valuation and long-term success. 

billingoptimization#, costreduction#, expensereduction#, 3rdpartyvendormanagement#

No business should have to feel they are “on the watch” for changes in their contracts and agreements.  This includes those special “1-year promos” that are deigned to take advantage of companies who get complacent and don’t audit their billing. So instead, the price rolls to the current market retail prices which is usually DOUBLE the promo rate!  Now the service provider should INFORM their customer more clearly of any changes going into effect, clearly state them and offer cost saving OPTIONS?Well, I think we can agree that this is is NEVER going to happen!

Example from frustrated Corporation Manager:

“They didn’t put us on any plan after the expiration, but after I contacted them they supposedly put us back on it and told me to only pay what we were paying prior. It was a big fiasco and has been. I was not under the impression it was only a year thing, but I will contact them and my director to see how they want to proceed if we want to stay or go with another company.”

“I did speak with them and it has taken 5 phone calls over the course of 6 months several disconnection notices that they claimed to me they were going to adjust our account. Again just the other day we received another disconnect notice and I called them on Friday and apparently they only issued us an adjustment from December forward for some reason not November when it had started, and they are saying whatever the promotion was parts are not available.” – P.C. Orinda, CA

Let’s be very clear about this:  This treatment is “vendor abuse”. Service providers have had the ability for MANY YEARS to take advantage of their Clients, and most often do. Unfortunately, that means the business has only 2 options:

1. They can have an internal staff spend hours trying to keep up with the renewals, inventory, billing changes, audits, inspections, expired warranties, agreement promos, 3rd party charges and all the other aspects of contracting with vendors.
2. They can entrust these services to a company that provides a fully managed vendor and supplier service which includes; proprietary software, monthly bill auditing, proactive contract management, document management, compliance notifications, increased efficiency, and maximized profits.

 The choice seems pretty darn simple, doesn’t it?

Imagine all the hours FREED up from resources not having to deal with the frustration of vendor management. Having an EXPERT auditor, contract negotiator and accounts manager creating your unique profile including analytics and visibility into all spend. Having the ability to access all documents, contracts, bills, renewals, compliances, and warranties from ONE CENTRAL LOCATION – 24/7.  That is right, even while key vendor management resources are on vacation or away from the office for any reason,  when an important contact, bill or document is needed it is easily accessible by anyone with credentials.

We understand and respect the services the efforts that internal vendor management resources provide.  But sometimes, they simply cannot dive deep into every bill or invoice and provide the most optimized approach to improving your bottom line.  Sometimes, the only way to do that is by working with cost reduction specialists who do it every single day.

Why are we trying to do everything in-house, and when do we start looking outside to experts who are better suited to improve our bottom line.

Here are some key considerations your company should be looking for as you determine if an outsourced managed service solution will create value for your company:

Does outsourcing align with our internal resource needs?

As you evaluate your internal staffing, resource roadmap, and internal processes, does a managed services solution allow you to unburden your staff so they can handle other business-critical activities?   Will a fully managed solution deliver the improvements better than we can internally?

Are their experts better than ours?

You need to ensure the VMS provider is designed and resourced by a team of subject matter experts that are focused on cost reduction and have the appropriate industry expertise to provide you with the required improvements to your organization.

Is our process proven to provide results?

Do you have a cost reduction strategy?  A proven process that begins with assessing the current state of your vendor agreements and contracts, resulting in demonstrated savings should be a prerequisite.  

Scalable and Reliable Service Level Performance

Can the provider meet your unexpected demands (higher number of new vendor diligence than you anticipated) and align with your growth plans to scale with your accordingly?

Are You Ready for Outsourcing?

If you are unclear if outsourcing makes sense for you, consider the following as objectives that outsourcing some or all of your Vendor Management Program is something you should be considering:

• Lowering Costs
• Streamlining Operations
• Implementing Best Practices 

In the end, outsourcing your Vendor Management function can make sense on many fronts.  It can send a message to your staff, executives, board members, and investors that your take seriously the responsibilities to mitigate third-party risk, optimize your operating costs, ensure regulatory compliance and strive for excellence.

But not every vendor relationship is created equal. A true, risk-based approach requires organizations to first segment their vendors based on pre-determined criteria, and then establish an appropriate level of ongoing due diligence and oversight activities based on the assigned level of risk. And while the specific activities may vary across organizations, there are three types of risk you want to be sure to address.

• Operational Risks
• Financial Risks
• Regulatory Compliance Risk

OPERATIONAL RISKS

Operational risk is the risk that your organization will experience a major failure, shutdown, or unexpected disruption of some segment of your business if a vendor’s processes, people, or systems fail. The operational risk goes hand in hand with your reliance on a vendor and is typically higher with vendors that provide services such as outsourcing, IT systems, and data.

There are two good ways to take a proactive approach and mitigate operational risk: perform periodic on-site and/or due diligence reviews and create a contingency plan should you experience a failure with a risky vendor. These two risk-mitigation activities go hand-in-hand, especially for mission-critical vendors. Monitoring daily performances that don’t meet the standards required is also a good indication that in a time of risk there is a higher risk of disruption or failure.

FINANCIAL RISK

Financial risk is the risk that your organization is negatively impacted financially due to a vendor relationship. This can come in two forms: excessive costs and lost revenue.

Poor Vendor Service due to Finances

Many supplier performance issues are related to finances.

Deliveries were late, and shortages were piling up with no relief in sight. The primary supplier was actively blaming the secondary supplier for the bottleneck, claiming that their supplier was behind in their coating process. They began casting aspersions on the supplier’s lack of process control, communication and even hinted at ethical issues.

While the protocol was for the primary supplier to manage all downstream relationships, this problem had escalated high enough that it was time to call the supplier directly to get to the bottom of the issue and develop a get-well plan.

Negotiating and Enforcing Contract Compliance

Organizations understand the importance of managing competitive solicitations and negotiating good pricing. But negotiating a good price has little to do with managing costs, which comes from enforcing contract compliance, effectively managing the procure-to-pay cycle, and performing periodic cost and contractual audits. It’s the work done after the vendor contract is negotiated that mitigates the risk of excessive costs.

The other financial risk relates to the reliance on vendors who support your revenue-producing activities. Examples include fundraising companies, outsourced service providers, and fulfillment centers, to name a few.

It may also include vendors whose technologies you use to process financial transactions. Problems with these vendors may delay access to revenue or, in the worst cases, result in lost revenue for your organization.

It’s important to identify and segment these types of vendors to design the most appropriate diligence and oversight activities and to also integrate with your vendor management operational risk planning as it relates to contingencies.

Regulatory Compliance Risk 

This has become a HOT TOPIC in many industries. Nonprofit organizations like health plans, healthcare systems, and credit unions, along with those that receive Federal grants, are heavily regulated by Federal agencies. And in many cases, certain regulations pass through to third-party vendors.

Regulatory compliance risk is the risk that a third-party vendor will violate a law or regulation that your organization has placed on them as a requirement for doing business with you.

Ensure your risk management activities enable you to evaluate how well your vendors are complying with the appropriate laws and regulations.

Even though a supplier may be remarkably reliable, the fact that their component or ingredient is essential to your finished product makes them high-risk. Partnering with a company that oversees these risks to proactively avoid business disruption is key to avoiding potential problems.

Audits aren’t just necessary for validating new suppliers––they’re an important tool for maintaining quality and compliance over time. The recent rise in outsourcing only further underscores the importance of having a plan in place to conduct regular evaluations led by skilled quality professionals.

Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA saving them millions in costs.

Through our Billing Optimization and Vendor Management Solutions proprietary platforms, we utilize technology, processes, expertise, time, and resources to improve our client’s bottom line.

Limitless Technology manages your vendors, so you can manage and grow your business.

For Additional Information Contact us at 407.330.4466

We all understand the importance of overseeing our vendor ecosystem, but today we’re paying it a bit more attention as we realize the critical governance oversight it provides us. Our systems are uniquely positioned to act as a bridge that connects all of our stakeholders.

We have traditionally managed our vendors ourselves, as we feel this gives us better control over our vendors—allowing us to keep a hand in what is going on. However, more established enterprises are seeing the benefits of third-party management, bringing these specialists in to manage the day-to-day oversight of their vendors. Vendor management specialists can help manage transactional activity, collect operational data and even come up with suggestions for improvement.

By outsourcing management of our vendors, we can reduce our costs, improve service delivery, and place our focus on internal resources to help us develop richer relationships and higher strategic value.

Outsourcing certain jobs frees up everyone else in your business to focus on the areas they add the most value. An outsourced job usually requires a particular skill set unique to that industry, so having your existing employees pick up jobs they aren’t particularly trained for will take time away from their own specialized work, and will result in less-than-desirable results. You can’t expect your director of sales to also be an expert at marketing, just like you can’t expect anyone else in your company to quickly pick up the skills required of your own job.

When one individual is responsible for developing and managing an internal vendor management system, that information is often held by just that single person. When that person goes on vacation, takes time off for life events, or quits, the work is shuffled off to a backup who doesn’t necessarily know what to do. This can result in two problems:

1. The backup does it wrong. Tasked with vendor management, the backup will give it his best shot, but if he doesn’t know what he’s doing, he can easily make costly mistakes. This can create problems down the road.
2. The backup wastes a lot of people’s time asking questions. The backup wastes time reinventing the wheel and asking a bunch of questions that the vendor manager already asked.

Outsourcing creates stability. Losing an employee won’t mean losing systems, policies, and procedures. They are already developed and stored in an easily accessible place.

While there are many reasons why your organization would benefit from outsourcing your Vendor Management … Here are 6 of them.

6 Ways Outsourcing to a Fully Managed Vendor Software Solution Adds Visibility and Efficiencies to your Organization?

1. Cloud Based Repository. Increased Efficiency and Productivity.

Automatic Renewal Clauses (“ARCs”) or AUTORENEWALS can be golden for business. But for all their perks, ARCs are notoriously problematic. They may irritate customers who’ve missed the termination window, trap businesses in undesirable ongoing agreements, and undermine the validity of entire contracts. They act to perpetually renew a contract when no notice has been given to terminate it. So how can a business ensure they manage their autorenewal contracts to avoid termination penalties, increased fees, and being locked into an unwanted contract.

Keys to Managing Auto Renewals, Todd Larsen, CEO

3 Keys to Managing Autorenewal Clauses

ONE.

When you sign a contract set a recurring alert as a reminder to review the agreement. Organizations especially those with multiple locations have numerous contracts and agreements. Managing them ALL can become overwhelming. In most cases after the contract is signed, it is FILED and FORGOTTEN! Therefore, managing every contract and agreement is a must or the organization can easily miss autorenewals costing them thousands.

TWO.

Review the contract portfolio completely periodically. While it is certainly important to negotiate the best bargain for the organization, contract risk management increases IMMEDIATELY AFTER contract execution. Collecting autorenewal contracts with an unspecified duration for analysis can be TRULY illuminating! Questions to ASK …

• What percentage of all contracts are autorenewals or unspecified?
• How long ago was the oldest review?
• What types of contracts are auto-renewed? What departments, divisions, or subsidiaries are producing the most autorenewal contracts?

THREE.

If you chose auto-renewal contracts TAG them appropriately. One of the MOST COMMON MISTAKES made by finance, legal, and contract management departments is to open the spreadsheet of contracts and leave the “expiration date” blank. With a blank entry, it is not clear whether it was forgotten or if an expiration does not exist.

Most organizations have autorenewal contracts in their portfolio. Chances are that no one knows how many, how much money is at stake, and what the consequences are. With the three simple steps above you can help your organization master these challenging agreements.

The LIMITLESS Vendor Management Solution (VMS) Software is: fully managed software, enterprise-based, and generates high-level spend and vendor management metrics. VMS provides a SINGLE SOURCE tool providing transparency and visibility into all vendor management processes, documentation, invoicing, and costs.

Imagine all of your vendors at your fingertips in one FULLY MANAGED software solution. Tracking and managing contract auto-renewals is only one of the features of LIMITLESS VMS.

With a Vendor Management Solution, contract experts can negotiate a fixed rate for a particular service. The contract terms must be met ensuring that both parties are aware of what is expected and any variances will be flagged and the vendor will be held accountable for any charges and changes outside of the agreed terms.

Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA saving them millions in costs.

Through our Billing Optimization and Vendor Management Solutions proprietary platforms, we utilize technology, processes, expertise, time, and resources to improve our client’s bottom line.

Limitless Technology manages your vendors, so you can manage and grow your business.

For Additional Information Contact us at 407.330.4466

Your company starts to grow, and you need more technology to keep up with additional staff, customers and to help improve the process. You are aware of the efficiencies and cost savings made possible by new technologies and are upgrading their infrastructures as a result.

But are you aware of How Purchasing more Technology can lead to Cost Creep?

Every CFO knows about “cost creep”; the slow build-up over time in the cost/revenue ratio. In today’s marketplace, there is an increasing number of service providers who can deliver more efficient solutions, giving end-users more options than ever.

In the beginning, new suppliers are on their very best behavior, cutting deals and slashing costs. The client will enjoy some pretty large cost savings during the first couple of years.

However, as the contract matures and becomes less visible to the client, costs begin to slowly creep up until, if unchecked, they can accelerate way beyond the initially agreed-upon amount.

When you purchase more services, your plans may mutate, creating new contracts that incur additional charges. Over time, small ancillary charges can appear but are not questioned, increasing your bills slowly. This “creep” may leave you paying for services you do not need and may not even understand.

Because data is at the heart of every business and it plays a crucial role in businesses staying connected, technology bills are perceived as a necessary fixed expense and are often overlooked even when the initial cost has increased yet services have not changed.

Companies, Organizations, and Businesses can easily incur monthly expenses ranging from thousands to tens of thousands of dollars each month. Managing the financial component of vendors can be a nightmare! Looking at just telecom you have: Multiple carriers, multiple contracts, introductory offers, equipment, and different locations. Just these factors can lead to poor financial management and procurement processes.

Learn how to improve vendor management processes and improve your bottom line! #stopcostcreep #reducecostcreep

With a Vendor Management Solution, contract experts can negotiate a fixed rate for a particular service. The contract terms must be met ensuring that both parties are aware of what is expected and any variances will be flagged and the vendor will be held accountable for any charges and changes outside of the agreed terms.

If you have questions about any of our VMS benefits contact us today at 866-504-4050 to learn more about our Vendor Management Solutions.

Vendor management is a core competence in successful business. In a competitive marketplace, businesses must look at creative ways to extract more value from providers, while reducing risk and upholding quality.

Simply beating suppliers down on price year after year is not a sustainable strategy!

Limitless Technology, LLC has been managing complex indirect spend and vendor documentation since 2006 for some of the largest companies in the USA saving them millions in costs.

Through our Billing Optimization and Vendor Management Solutions proprietary platforms, we utilize technology, processes, expertise, time, and resources to improve our client’s bottom line.

Limitless Technology manages your vendors, so you can manage and grow your business.

For Additional Information Contact us at 407.330.4466

As companies attempt to streamline their costs, an area that frequently gets overlooked is vendor management. This critical function of an organization is oftentimes plagued with errors and inefficiencies, especially if it has not been given the proper attention.

Problems include not knowing the exact services you have, SLA’s for providing the service and whether or not you’re paying too much. Recognizing the “whether or not” in itself is an enormous problem and a difficult task. However, there are unique service offerings and software based toolsets which companies can take advantage of to fully understand their current vendor environment.

Just as a retail store takes an inventory of what products are on their shelves, companies need to do an inventory of their vendor and supplier management systems. A expertly  managed VMS solution proactively measures and monitors your vendor environment, so you know where every penny is going and the value you’re receiving in return.

It’s easy for unnecessary services — (which in many instances go unused or provide little value) — to creep into your vendor invoice line items. The VMS system analytics gives you a 360 degree view so you can accurately gauge your situation, determine whether service changes need to be made and whether it’s feasible to reduce costs.

VMS is essentially helps analyze where a company’s vendor infrastructure is today and what modifications can be made to improve the organization tomorrow.

The end result of the VMS Service and Software is to ensure individuals responsible for their company’s vendor management can make better educated decisions about what they actually need, what risks are involved and how much to pay for them. Additionally, the data enables them to more effectively manage adds, moves or changes to  line items, equipment and services as their company expands. It puts users in control of their vended services which inevitably reduces costs, improves efficiency, mitigates risk and can save significant amounts of money.

Whether you’re being billed correctly or utilizing your vendors to full capacity will no longer be a challenge once you engage in a fully managed vendor management service. Once engaged with VMS, you will know what services you’re paying for, their true costs and the value they’re delivering to your organization.

In order to survive in today’s business environment, you must find ways to increase profitability, improve productivity and obtain a competitive advantage. A VMS solution provides you with some additional help to achieve this objectives.