Research Conducted by AIQ Finds American Businesses Consistently Over-spend Optimal Market Prices
SALT LAKE CITY, UT / ACCESSWIRE / September 26, 2023 / American enterprises are paying technology prices that are 79 percent higher than what market conditions warrant, reports AIQ (www.aiq.co), a leading technology-enabled cost management and profitability improvement company backed by Copley Equity Partners. AIQ's research revealed that this trend for overpaying for technology accelerated through the pandemic and has remained at an elevated level. The research also revealed that, 75 percent of the time, alternative vendors could be found that better fit the enterprise's documented business requirements. The data was collected through an evaluation of technology purchases made by over 60 businesses across a broad range of sectors, including healthcare, technology, retail, and professional services.
According to AIQ, nearly every company examined was found to be paying for and using redundant solutions - with multiple vendors contracted to provide similar and overlapping solutions for technology categories such as CRM, cloud and data services, billing, software, network storage, business process outsourcing, telecommunications services, and data center technology - representing opportunities to consolidate vendors, negotiate lower costs, and simplify the supply chain.
Additionally, AIQ found that 60 percent of the companies it reviewed did not effectively manage auto-renew supplier contracts, oftentimes resulting in spending on products and services that were no longer in use.
"The past several years have been a technology-buying bonanza in the enterprise sector, and it appears that many organizations have paid far too much for their solutions, did not assess the supplier landscape effectively, and their excessive spending combined with slowing economic growth may be depressing their enterprise value," said Blake Wetzel, chief executive officer of AIQ. "As the economy softens, businesses would benefit from optimizing their technology contracts to eliminate unnecessary systems, reduce overhead, and harvest expense reductions for operating capital."
According to Jon Arnold, founder and principal analyst of J Arnold & Associates, a technology consultancy based in Toronto, AIQ's data aligns with what he is seeing in the market.
"For the past several years, I've spoken with many enterprises that have heavily invested in new innovations like cloud services, customer engagement platforms, business processing capabilities, and other solutions at peak market prices," noted Arnold. "As capital becomes more expensive, many of these organizations find themselves financially handcuffed to their tech stack, limiting their ability to invest in emerging solutions that may offer even greater value to their business. These companies are having very hard conversations to find a path forward to reduce their technology spend while still taking advantage of the profound benefits associated with modern innovations."
Headquartered in Salt Lake City, AIQ provides end-to-end technology vendor assessment, procurement, and negotiation services to large enterprises around the world. Through AIQ's proprietary reverse-auction process, clients have enjoyed supplier savings of 44 percent, on average, since the company's inception 20 years ago. AIQ handles all facets of the procurement process, including vendor identification and vetting, reverse auctions and direct negotiations, finalizing terms and conditions, and executing contracts. AIQ's clients organically increase enterprise value and improve their cash positions without having to reduce headcount, slash budgets, or secure external funding.
For more information visit www.aiq.co.
For over 20 years, the AIQ team has helped clients increase their enterprise value and operating cash by materially reducing IT costs. AIQ is backed by Boston-based private equity firm Copley Equity Partners. AIQ specializes in creating industry-leading savings of technology-centric IT services in over a hundred categories, such as cloud, SaaS, digitization, and big data, through the application of its unique tools, expertise, and business processes. Its patented technology and business process platform ensures maximum savings for clients, while measurably improving quality and service levels from IT suppliers. http://www.aiq.co/
About Copley Equity Partners:
Established in 2012, Copley is a private investment firm with offices in Denver and Boston. Copley partners with growing, lower-middle market private companies. The firm invests out of an evergreen, single-family office capital base and is comfortable in both majority and minority ownership positions. Copley's patient and flexible capital base allows the firm to provide each portfolio company significant support post investment. www.copleyequity.com.
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