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Frequently Asked Questions
ICT is “information & communications technology“, the name of the new industry created by the convergence of the IT (computers), voice (phones), network (internet & data) and application (software) industries over the past 30 years.
Businesses may opt for a “managed services” solution when they prefer to “rent” a business application as opposed to buy all the equipment required to install, and hire the employees required to manage a business application. A business phone system is an example where some businesses prefer to own the phone equipment often in a single location with workers coming to the office.
Others prefer to rent the ability to make & receive business calls without the overhead of owning and managing owned equipment using cloud or hosted VoIP-voice over internet protocol or now known as UC-unified communications.
A procurement partner is any professional who helps a business decision maker evaluate & procure ICT solutions. They’re usually a vendor’s in-house “account executive” employee who get’s paid a salary & one-time commission or an independent sales agent AKA contract “partner” for a vendor that gets paid a recurring monthly commission when a business contracts for an ICT managed service.
A trusted technology advisor (“TTA”) is a procurement partner who has risen above the level of order taker or broker. TTA’s specialize in understanding the entire technology ecosystem of a multi-location midsized business so they can help the business sort through diferent prospective technology solutions from different vendors.
A skilled TTA will help a business evaluate different managed services vendors and ensure that the vendors’ sales engineers completely address any and all multi-vendor integration concerns.
IT SPVM is the title applied to a person or group of people who specialize in identifying different IT acquisition channels, negotiating contract terms and managing ongoing IT supplier relationships. Historic internet searches indicate that Gartner, a technology research and consulting firm, has used and published the term extensively over the past decade and even has a division of analysts that work in the “sourcing, procurement and vendor management group”.
The title is now widely used in business and the IT SPVM acronym easily identifies people engaged in the profession. Mid-sized and multi-location businesses looking to hire or contract for this expertise will use the IT SPVM term in help wanted job descriptions.
A “center of excellence” or CoE is a library of easily accessible and vetted information that ensures organizational decision makers can apply best practices analysis to telecom & IT sourcing, procurement and vendor management projects. Gartner analyst Yanni Karalis states a CoE concentrates existing IT SPVM expertise and resources “to attain and sustain world-class performance and value”. Towards that end, TA is creating an open source IT SPVM CoE that can be accessed by any business and used as a template for any business to create their own IT SPVM CoE.
Initially, the CoE will exist as blog posts on the TA website and a weekly email newsletter that answer business decision maker questions within different catagories of IT SPVM. Ultimately the blog posts will be incorporated into a CoE e-book that is continually updated by TA subject matter expert (SME) members in specific ICT categories. TA will publish a directory of category SME TA members who are volunteering to write different parts of the CoE. Business decision makers are invited to communicate directly with SMEs for consulting on any topic where an existing blog post does not already provide a direct answer.
TA’s SMEs (subject matter expert) are trusted technology advisors who represent multiple recommended vendors in a specific service category. Out of ten vendors in a specific managed services category, a SME can quickly determine which three are best suited for a specific midsized business based on different situations. TA’s SMEs are selected based on their LinkedIn profiles as well as their industry reputation among managed services vendors and their SME peers.
TA exists to to educate the trusted technology “Advisor” how to collect, categorize and curate the overwhelming amount of information they receive on a daily basis from ICT managed services industry vendors and distributors. An Advisor can be an independent contract consultant who advises the CxO or IT director of a multi-location, midsize business or an in-house employee of a multi-location, midsize business where the CxO or IT director has decided to create an in-house Advisor. Any Advisor may apply for either a complimentary or professional “Advisor” membership with TA.
CxOs (CEOs, CIOs, CFOs, CTOs, etc.) and IT directors – the business persons who actually sign the managed services agreements – are the “Customer” members of TA. Since Customers want to be educated and/or properly advised to ensure they’re signing for the right managed service solution at the right price, TA does all it can to teach our Customer members all they need to know to A) select an Advisor who will put the Customer’s interests first, and B) make the best decision for their business based on the Advisor’s counsel and TA’s full-disclosure policy.
TA educates Advisor and Customer members by first curating and then evaluating all the marketing, sales and engineering information generated by ICT managed service vendors and providers. Any ICT managed service provider or vendor may apply for either a complimentary or professional “Provider” membership with TA.
Customers, Advisors and Providers often need extra legal, accounting, marketing and administrative support. As such, any professional falling into this fourth category may apply for either a complimentary or professional “Support” membership with TA.
As a 501(c)3 non-profit educational corporation, no person or entity “owns” TA. TA is operated by its two founding and voting board members Dan Baldwin & Nancy Hagen Baldwin. TA is funded by contributions from TA professional members. TA may also receive a commission when ICT managed services are acquired through TA referral links. All TA professional members are invited to advise TA during monthly professional membership meetings.
On October 1, 2022, TA will publish and distribute its first weekly email newsletter, “SPVM News” to 10,000 CIOs and IT directors of businesses with 500+ employees. Working with IT & social media professionals, TA will grow the email distribution list to 50,000 CIOs and IT directors by March 31, 2023. TA will grow and measure success by having above average open and click-through rates and below average unsubscribe rates.
By 3/31/23, TA also expects to have published the inaugural “IT SPVM CoE” where the top solution providers for all current categories will be ranked along with a category SPVM best practice buyers guide. In the same way that Consumer Reports is a non-profit that successfully teaches consumers how to purchase consumer items, TA will be a successful non-profit that teaches multi-location, midsize businesses with 500+ employees how to SPVM (source, procure & vendor manage) ICT managed services.
TA is the same as a traditional master agent in that TA educates Advisors and provides Advisors access to solution agreements – through agreements with current master agencies or with carriers direct. TA is different from a master agency however as TA can never “sell out” as there is no “ownership” of a non-profit corporation. Another way that TA is different from a master agent is the way TA views Advisors. Few, if any, master agents would consider training an in-house IT employee to be an Advisor or recommend a solution that they do not represent as doing so violates their profit model. As a non-profit corporation that teaches first, TA does not avoid recommending a solution that pays no commission.
As well, TA teaches in-house IT employees how to become an Advisor with the understanding that most, if not all, ICT vendor agreements prohibit paying commissions to customers. If an in-house employee becomes an advisor through TA, the in-house employee’s business enjoys a discounted retail price (the normal retail price minus the commission amount) or the commission may be donated to a non-profit organization as allowed by the ICT vendor and/or customer policy.
While the IT SPVM CoE best practice information that TA teaches can benefit any business, it is very dificult for an independent Advisor to financially support themself and their family budget if all their consulting time is used up on smaller business clients. As an Advisor earns about a 10% commission of the monthly managed services invoice of their clients, it only takes about five clients with 500+ employees each to make a decent living. (Five clients with 500+ employees generally spend $25,000 per month on managed services. This totals $125,000 of commissionable monthly recurring revenue (“MRR”). Multiply this MRR by an average 10% industry commission and the Advisor receives $12,500 per month or $150,000 per year in total commission income before self-employment taxes.)
The other reason for the 500+ employee target market segment is due to greater IT environment complexity. When a business has 500+ employees, the company almost always has multiple-locations spread across the United States if not the whole globe. Wide geographical disbursement of employees and business locations almost always requires multiple technology vendors to work together to produce an integrated technology solution for a business. When CxOs and IT directors are required to deliver multi-vendor, multi-location technology solutions they turn to trusted technology Advisors with the most recent training from the top vendors in the industry.
Large technology solution providers such as AT&T, Verizon, Lumen, Spectrum, Comcast, Cox and others that support both a direct sales force of in-house employees as well as an indirect “partner” sales force of independent contractors due so in an effort to ensure they cover their target markets in the most cost effective manner. Where providers expect ongoing “guaranteed” sales revenue from specialty markets such as schools, government and the military, it’s not unusual for the provider to strongly support a direct sales force of in-house employees and “protect” these markets from their sales partners. For almost all other markets, large providers almost always prefer to generate larger, multi-location sales through their indirect sales partners as the indirect sales partner will ensure the needed “after signature” multi-vendor project management needed that the in-house sales force is not trained for.
Do Business Customers Pay the Same Retail Rate When Buying Through Advisors as Opposed to Direct Sales?
Yes. No. Maybe. Ask!
If you ask this question of 100 independent Advisors, 99 will tell you that you’ll pay the same retail rate whether you buy a technology service through them or through the provider’s direct sales team. When this is true, it’s only true because the technology provider has a policy that says it’s true. At the end of the usual 36-month contract services term however, the service provider’s accountants know that the cost of the service provider paying 36 monthly commissions to a sales partner will provide the service provider much less total revenue over the term than they would have earned paying an in-house direct sales person a one-time commission. It is not unusual for a large service provider’s direct sales team to provide a service at a much lower retail price point than the same service can be sold through an independent Advisor.
The only way a customer will know if the price would be the same is to ask for a quote from both the independent advisor and the direct sales person. After the sale, it’s generally the same service provider support team that installs the service regardless of which sales “channel” the customers buys through. When the customer has the legitimate lowest price quotes from both the direct and “indirect” sales channels for the exact same service, quite often the customer may choose to buy through an Advisor – at a higher monthly rate – when the advisor bundles his or her “after signature” extra value to the signature.
When multi-vendor project management is required after a contract is signed to ensure a successful installation, business customers often agree to the higher per monthly price through an Advisor so that the advisor will personally ensure a successful implementation – something a direct sales person simply can not provide in a multi-vendor project.
How Does TA’s Policy of “Conditional Full Disclosure” Prevent Conflicts of Interest Between Customers, Advisors and Providers?
TA acknowledges that the whole point of Providers creating a technology business is to generate high profit margins for the owners. TA believes that high profit margins usually result from one of two situations – the selling party “earns it” by delivering extra value or the buying party “loses it” by signing a contract with incomplete market knowledge.
TA’s non-profit educational function is to teach parties that want to learn how to achieve sufficient market knowledge prior to signing a technology managed services agreement.
TA’s policy of “conditional full-disclosure” requires that TA members fully and truthfully answer objective questions put before them by other TA members. TA’s job is the teach TA members the objective questions to ask other TA members when transacting business as well as how to understand the different possible answers. TA specifically trains members what questions to ask to to avoid conflicts of interest and to ensure the right managed service is selected at a fair market price.
Does TA Function as a Co-op Where TA Members Save Money or Get Special Deals by Buying from Other TA Members?
While TA was not specifically designed to function as a classic cooperative, TA Providers dramatically lower their new customer acquisition sales and marketing costs when the new customers learn about the Provider through their TA Customer membership. Because the the “pre-sale” education TA imparts on our TA Customer members, TA Providers also experinece lower “after signature” customer implementation costs. Because TA’s Customer member education program lowers the total cost of customers for TA Providers, TA Providers can afford to offer TA Customer members special pricing and/or unique benefits without adversely impacting their overall margins. TA teaches our Customer members how to be a high margin customer so they can then ask TA Providers, “Do you offer any special deals for qualified TA Customer members?”
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