As we embark into first week of the fall season, the time is ripe to review and prepare next year’s budget. When technology expenses for 2019 budgets, the following five areas are prime opportunities to harvest savings or craft better budget strategies. This is part one of a two-part series.
Review all your technology partner agreements
Using budget time to review all technology partner contracts or agreements is smart. If you haven’t done this before, now is the time to start. This practice ensures awareness of the essential elements within agreements while planning next year’s strategy and budget.
Agreement Expiration Date
Expiration dates in agreements are central in controlling budget costs. When a renewal of an agreement is approaching, make that call with your technology partner. Have that conversation about their performance, focus on what is working and not working, and let them know the renewal is approaching. It not only shows you are on top of your job, but you also respect the relationship.
Non-Renewal Service Notification
Also review the agreement to know when to send the non-renewal of service notification to the partner and begin to plan for the transition. Most agreements need at least 90 days’ notice. Add the date to your calendar as a reminder. Tip: give yourself a 10-day warning prior to the date.
Evaluate the pricing model set in the agreement. During the past year, have the number of licensing subscriptions increased or decreased? Are the agents counts correct? Do the invoices match the agreement? Surprises do show up when taking the time to properly analyze agreements consistently year after year.
This year’s review of technology partner agreements is important for those where their services store customer Personal Private Information or PII. New terms to cover your brokerage for the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act of 2018 will safeguard the firm. WAV Group can aid in supplying the right language for GDPR and copyrights into your technology agreements.
One overlooked term in technology agreements is copyrights. Include terms to define the right copyright use of any digital asset the partner obtains from your brokerage or agents.
WAV Group has been in the forefront of PII and have helped companies to obtain compliance to GDPR. We can aid in supplying the right language for GDPR and copyrights into your technology agreements.
Telecommunication is a valley of hidden opportunities to reduce expenses for your budget. A major change in philosophy is to question if it is necessary to have a phone at every desk. Today’s real estate conduct business calls or text messages via mobile phones, not the phones in the office. Yes, I know, of course there is a need for staff and a few community phones to handle office calls. Key words “a few”!
The right phone system transfers calls – manually or automatically – from the office to an agents’ mobile number or to an application on their mobile phone. Want to recruit younger agents? Let them know your brokerage has a system where they can use their phone to receive calls from an automated system.
There is this heated debate between hosted versus on-premise phone systems. There are plenty of advantages and disadvantages to either system. The tipping point in choosing the correct system is based on the number of phones and the makeup of your IT team.
My take on which system to choose as an enterprise brokerage is dependent on how much I need to control fixed expenses. When the market is good – like now – the benefit of buying on-premise phone system is you own the system. The IT team supplies the only future cost, which is maintenance.
This strategy also offers an advantage during a market downturn as monthly invoices end or decrease. I implement on-premise systems were total cost of ownership (TCO) pays out in 26 months for 200 phones in 10 offices. Phone systems have a life expectancy of at least 5 years. That is 34 months without an invoice from a hosted provider.
If the strategy is to minimize initial capital outlay or minimize the amount of IT involvement, then hosting is the right solution. There are plenty of services available from national companies like RingCentral and Bitrix. The WAV Group has access to all these companies and can deliver a solution that is custom fit to fulfill your needs.
When it comes to bringing voice (telecommunication lines) into the office there are a lot of options and opportunities. After reviewing several brokerages telecommunication costs, older technologies incur more expense. Newer technologies tend to deliver voice at more reasonable rates.
Brokerages are also in fear of using “best effort” services rather than “guaranteed services”. Best effort services supply the same uptime as guaranteed services at a fraction of the cost. An outage is an outage, period. Guaranteed services are not exempt from outages and their support services equal those of best effort services.
With that being said, the telecommunication industry has a few little hidden secrets in how they sell their services. The WAV Group has access to these companies to ensure you receive best pricing.
Most brokerages do not take the time to do this but implementing a mid-year budget review aids in lessening the effort in a yearly budget review. Mid-year budget review allows you to compare actual versus budget based on market activities. The review can also allow the ability to pivot based on new company goals or changes in the market.
Next week’s part two will look at Cloud Services, Hardware Refresh Program and Shadow IT have an impact on technology budgets.
We understand that having a sound technology budget and strategy are essential to the bottom-line of brokerages. The WAV Group is available to help find technology cost savings and strategies for brokerages. Contact Victor Lund, Marilyn Wilson, or David Gumpper to schedule time to discuss any interest in these systems. Firms may schedule a private WAV Group overview for their executive team or board by contacting Camilla Harvey at Camilla@WAVGroup.com