Unexpected Pleasure

This week, I have had the pleasure of firing one of our major software vendors. I cannot tell you how good it feels to do it. Each official letter – each follow-up email with other partners — oh, and the ability to finally rid myself of their hundreds of consultants who want me to just give them an hour so they can show me why their dick is bigger than the last guy’s…..it’s heaven.

Is it wrong that I’m glad my boss gave me this job to do?

Let me share some high level numbers with you so you understand how significant this is:

  • Our annual IT budget is around $5 million a year.
  • This major software vendor charges us around $400,000 per year just for the pleasure of using their pain-in-the-ass software.
  • The other systems we have to run because the major software vendor does not have that functionality adds another $350,000 per year….wait….make that $400,000….just realized I forgot two systems. (There are at least 8-10 additional systems in that number).
  • And, because I need people to support it (people who are NOT cheap), I’m paying another $650,000 a year to have people supporting it.  
  • Just a rough swag at how much this system is costing us: $1.5 million….a year….or 30% of our annual budget.  I bet, if I threw in hardware costs and internal staff, it would be closer to $2 million a year.
A year ago, we started talking to this major vendor and sharing the costs with them. If they wanted to stay in the game, they needed to help us reduce our costs to support their outdated application. They pointed out that for a mere $3million dollars, we could upgrade to the latest release which should drive down people costs – but that’s only if we spent an additional $1 million to rebuy all of the licenses.  Yep – spend $4M to save money….my math skills couldn’t work that one out either.  We continued to work with them, but they finally came back and said there really wasn’t anything they could do.  I guess they forgot that we still held some cards in this game.
The system that will be replacing them does have an expense to it, but nothing in the ball park of what the current software costs us today.  One piece, for example, is 8% of the annual costs of the system it is replacing. The system we purchased to replace the major software vendor – the license were 25% the cost of the major software vendor’s licenses.  Which means their annual recurring expense will be around $70K versus $400K.  As you can tell, this change wasn’t difficult to sell to the executives.

I guess this is why I have immense pleasure in firing them.  While change is hard and not fun, this one is for us.   Sure the new software will bring with it its own issues, but they will be new issues rather than the same old issue over and over again because the major software vendor won’t fix their fucking code.  Nope, no hostility here. 🙂

One Comment Add yours

  1. Wow, those are some huge numbers! What a great job! I’ve never been in a position to fire anyone (vendor or otherwise). Bet that felt great!

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