The Beat, Emerging Tech: Cost Reduction’s New Landscape (Part 1) - Asking the Right Questions

Key Emerging Tech Trend: In technology, the rate of growth and adoption is not linear and, singularity is around the corner. Science fiction aside, Pew Research, polled experts in field citing 2025 for a more integrative singular environment accessible to all. IT Budgets are set to increase make a sizable increase by 44% of the Corporate IT leaders.

With such an environment there is a need to reflect in this new 4 part series for the new sourcing of emerging tech handbook to maximize cost reduction/efficiencies:

Part 1: Asking the Right Questions 
Part 2: Identifying Savings 
Part 3: Quantifying/Rationalizing Savings
Part 4: Implementing and Recording Savings 

At this Rate of Technological advents happening generation over generation and the frequently changing landscape of technology providers, apples to apples sourcing on products and services is often now irrelevant to attain maximum cost reductions. Just as we are seeing in the b2c frequently with apple and Disney and Instagram as a quasi competitor for Amazon with its shop here feature, we see the same sort of melding in the business world where seemingly unrelated business models become relevant. Supplier selection has become much more complex.  

Technologies are only viable if they are more efficient and if they are more efficient there is the opportunity for the sourcing professional to attain the cost reduction and get the savings. 

The first step is to ask and start with the question, “is this the really needed?”. And while depending on your businesses involvement with procurement, this might be an unwelcomed inquisition but starting with this question paired with some additional information can push the envelope for new thoughts and approaches to solving a business need before you go ahead and decide to lock in with the supplier with antiquated tech. As result the RFP’s will become more complex to analyze. It isn’t so much about what they think they need as is about what is changing. 

Commoditized services are now less common and are costing more to own operate. Take for Example MRO: This industry has seen tectonic shifts in its operating model Automation, IoT, and yes its almost practical 3d printing. 

I have been on two clients so far this year where I found myself and my team asking the same thing. Do we really need this? One for a client who buying monthly subscriptions of cable… Who does that now? isn’t there apple tv and fire-sticks etc… 

– Seemingly a question that should come out of FP&A or Corporate Finance but Sourcing professionals with the SME Expertise own the unique vantage of actually being able to respond in the non-biased way with an actual background in the product or service. 

Being stuck in the Business as usual frame of mind can litter your OPEX balance sheet inefficiencies that are weeding away at your competitive advantage. 

Traditionally Sourcing & Business Operations Professionals look to finding the right strategy by looking for the lowest cost of a certain product/service but often times what we find specifically that the lowest cost isn’t always a matter of your quoted price but different and highly tied to the purchase and technology partner. 

Next week, Part 2: Identifying Cost reductions