“You never know where you’ll find savings” is a phrase I catch myself saying to clients a lot these days. Most IT buyers are aware of the usual suspects of IT overspending – things like overbuying, over-licensing, etc. But, what about those unexpected culprits?
We see our fair share of surprises here at NPI. A client recently purchased Cisco equipment for an offshore office in India. The company wasn’t incorporated in India and used a third-party consulting firm to handle the equipment purchase and implementation.
When NPI reviewed the deal, it was obvious the company was not getting the level of pricing that a company of their size and spend should be receiving. As it turns out, the third-party firm was purchasing the Cisco equipment from a local distributor and the distributor was basing pricing off of the third-party firm instead of our client. As a result, the company was missing 8 to 10 percent in discounts.
Equipped with this new information, the company approached Cisco. The first question the vendor asked was “who will own the title to the equipment?” Our client confirmed that they would retain the title, even though the third-party firm was handling ordering, installation and the equipment would sit inside the firm’s space. This info allowed the company to receive the appropriate level of discounting.
Another example of “surprise savings” (or “overspend near-misses,” depending on your point of view) with this particular purchase was the port tax involved. Equipment shipped into India has a large port tax excised. However, local India technology companies are exempt from this port tax and can purchase the equipment significantly cheaper than foreign companies.
NPI was able to help our client navigate this buying process, ensure the right discount levels were applied and avoid substantial tax fees. It’s not exactly an ordinary path to savings, but it’s another example of how every IT purchase is unique in its savings potential. What “surprise savings” stories do you have to share?