March 18, 2020. On that pivotal day, the COVID-19 pandemic was officially recognized in the US, marking a significant turning point. Subsequent reactions and adaptations in collective and individual behaviors were as diverse as the nation itself. Some regions swiftly implemented stringent lockdown measures, while others opted for more lenient protocols. Yet, what unfolded in the aftermath defied all expectations.
Overnight work-from-home company mandates gave meteoric boosts to a full set of suppliers like Zoom (video conferencing) or TeamViewer (remote access desktop);
Increased security concerns from Suppliers letting their employees work from home, after having emptied their massive campuses – giving a boost to a plethora of Security Suppliers;
High Tech companies relocating from Silicon Valley to other pastures at a pace never seen before, including Oracle moving its iconic headquarters from Redwood Shores to Texas;
A major loss of tribal knowledge from workers in and out of business;
The establishment of the new “World of Work” accelerated the advent of generative A.I. almost everywhere.
The list could go on and on, with so much having been written about the transformative changes incurred by the pandemic that changed life as we know it.
POST PANDEMIC EFFECT IN TECHNOLOGY PROCUREMENT
One important fact that has been often overlooked, is, indisputably, a post-pandemic effect in the technology procurement industry: The “silent” increase of renewals and maintenance contracts. A 20% increase at the “anniversary” date is nothing uncommon, and sometimes it is higher than that.
Suppliers nebulously invoke the need to “recoup their own costs” to justify those increases. However, one cannot help but to wonder: What costs? Their costs, after all those well-documented layoffs and relocations, have gone down substantially.
The trend started with “Mega Suppliers,” but here at Green Cabbage, we see it across the board, including with niche, “Tail Spend” Suppliers. It almost looks as if Suppliers had secretly conspired to apply such stiff post-pandemic increases across the board.
Customers need to have the mindset that everything is negotiable. There is no fatalist attitude to those cost increases. But customers are often left wondering what they can do to mitigate those surging costs. What are the available levers to pull?
Green Cabbage can quickly and easily identify those levers for you. Our market intelligence, from over 15,000 suppliers, will identify savings in your contracts and our expert team can help you negotiate a better deal.
Four years later, the reality is that many companies still have not rebalanced their technology and contingency workforce agreements. If done correctly it has been proven to yield significant savings 15-30% - what would that mean to your bottom line?
Are you ready to take control of your supplier negotiations? Click here to learn how you can be fully prepared and ensure you are getting the best deal possible.
Written by: Chief Operating Officer at Green Cabbage, Francois Daumard