How to choose productivity tools that optimize efficiency and ROI
Today, Chief Innovation Officers (CIOs) are faced with a multitude of decisions every day as they try to reduce costs, maintain workflow efficiency and improve service offerings through new digital tools – whether that’s implementing new automation strategies or sourcing tools. to support companies’ digital transformation efforts.
For many CIOs, simply weighing the pros and cons between different software vendors and the tools offered can itself be a challenge, while others get caught up in ongoing contracts and don’t know how to maximize their value.
For example, choosing between the productivity/collaboration tools of Microsoft 365 and Google Workspace is a difficult decision for many. Both services come with a variety of features, and it can be difficult to decide which one is best suited to your organization to optimize efficiency and provide the best value for money.
So, where to start?
Strategy consultant and Max Sankey, director at Efficio.
Maximize the value of your current platform
To get the most out of existing technology, regardless of provider, it’s important to look for opportunities to bundle features and remove tools you don’t need; think of functionalities such as communication platforms, identity and access management, Single Sign On, file storage, telephony, data visualization, EUC cybersecurity and even EUC hardware. Companies can consider periodic or automated license harvesting to limit unnecessary new purchases. For companies that have yet to implement this, there is often up to a 20% chance of harvesting users to avoid new purchases and maximize the value of the existing platform.
Knowing when the time is right to reevaluate
Google Workspace and Microsoft 365 may have similar licensing prices for standard users, but to effectively assess the costs of both platforms, it’s important to compare the total costs of your broader tech stack.
For a more nuanced assessment, it is important to assess user profiles, employee mix (e.g. full-time or part-time), seasonality and employee turnover. For example, Microsoft offers a more modular licensing model for specific roles in an enterprise environment (e.g. F vs. E, M365 vs. O365, and any combination of add-ons), which can provide significant cost savings if you currently only use one license type. The cost of a full migration between platforms can be significant: one to three times your annual licensing fee plus the internal effort.
Contract agreements of one or three years?
When it comes to controlling costs and selecting a productivity tool that will ensure optimal efficiency for your business, it is also important to take the contract agreement into account. For example, if you look at Google and Microsoft’s deal plans, Google’s one-year deal is similar to the three-year deal, but it may eliminate discounts in exchange for the flexibility of a shorter commitment.
Meanwhile, Microsoft’s one-year New Commerce Experience (NCE) or Cloud Solution Provider (CSP) is even more flexible, allowing for monthly commitments. This can be beneficial for seasonal licensing requirements or mid-year discounts. That said, if you are using the NCE/CSP, it is critical to monitor usage monthly. Companies often sign up for the monthly NCE/CSP at a higher unit price because of the added flexibility, without taking advantage of the real opportunities.
Both Google and Microsoft’s three-year agreements tend to be better suited to larger enterprises with consistent or growing workforces. Benefits include a better overall unit price and longer-term price protection. One key difference is that Microsoft’s Enterprise Agreement also allows customers to upgrade their subscription licenses on the anniversary of the three-year agreement.
Insight into cloud spend to drive negotiations
Another recommendation would be for companies to leverage their full Microsoft or Google spend and footprint during negotiations, especially to see if they can jointly enter into their various agreements.
While cloud teams typically rely on reservations, savings plans, and forecasts to optimize their commitments, companies must ensure they understand the benefits they can leverage in their licensing models. For example, Azure’s ‘Bring Your Own License’ can make purchasing Server or SQL through EA more affordable than on-demand.
Pricing for Microsoft Copilot or Google Gemini?
Microsoft Copilot (powered by OpenAI’s advanced LLMs such as GPT-4) and Google Gemini (powered by Google’s AI technologies) both aim to increase user productivity through AI integrations within their respective ecosystems. They offer an extensive list of features such as content generation, summaries, analytics and contextual suggestions to strengthen teams and create efficiencies.
Microsoft and Google currently offer fixed per-user pricing for each AI module, allowing companies to choose which users can use the AI functionality. The list price for each AI module is comparable to the productivity license (Workspace or Microsoft 365), effectively doubling your monthly spend. However, many of these new add-on products, e.g. GCP’s Anthropic, Google’s Gemini, Microsoft’s Co-pilot, Microsoft Power Automate, are effectively used as ‘sweeteners’ during negotiations to secure better discounts on core products.
To reduce costs and optimize efficiency across the business, CIOs must understand the options they have before moving forward, especially when it comes to productivity tools, to avoid unnecessary headaches and lengthy contractual agreements. Without understanding the features and benefits that new digital tools offer and the associated costs, many CIOs unknowingly agree to contracts that could cost them more than what they are already paying and be less efficient.
Before exploring new digital platforms or services, especially productivity tools, it is important to reevaluate the current service and determine if improvements can be made to maximize value and avoid purchasing something new. If this is not an option, CIOs must determine when the time is right to change and whether it is more valuable to enter into one- or three-year contracts.
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