Let's start with the basics of understanding what cloud computing means, how to navigate various terminologies, and what procurement can do to influence the costing models. A.) What's "The Cloud" Anyway? (For Buyers) It's like renting, rather than buying. Imagine you need a car. You could   buy   one (which is essentially having your servers and IT equipment). You're responsible for fuel, maintenance, parking, and insurance. It's a big upfront cost. Or, you could   rent   a c

Let's start with the basics of understanding what cloud computing means, how to navigate various terminologies, and what procurement can do to influence the costing models. A.) What's "The Cloud" Anyway? (For Buyers) It's like renting, rather than buying. Imagine you need a car. You could buy  one (which is essentially having your servers and IT equipment). You're responsible for fuel, maintenance, parking, and insurance. It's a big upfront cost. Or, you could rent  a car whe

Cost of Technology comes down with time but that's not the case with Procurement Tech. I wonder what's the reason?

Running out of Cost Saving Ideas in 2024? I'll give you 20 of them!Which one can you execute by July/Aug 24? Ask your Procurement Excellence team to do it for you!9900+ subscribers saw this first in the Supernegotiate Linkedin. Follow my LinkedIn account now!I am dropping a video on this on Sunday! I am always Supernegoting! Like my work? Buy me a coffee here! Download the file here.

In my last post, I talked about basics of Index based costing model in 2024.Today , I want to build on the basics and introduce a concept used in financial trading/hedging industry. The concept is to combine Options (Call/Put) with Index based costing models in Procurement especially while buying Raw Material Commodities or their derivative products (i.e steel, copper, crude or products where these commodities influence more than 60% of the price) Limitations of Future contr

There are many cost models available in Procurement Industry. Let us start by naming a few 1. Total Cost of Ownership (TCO) Model 2. Should-Cost Model 3. Cost-Plus Pricing Model 4. Activity-Based Costing (ABC) Model 5. Benchmarking Cost Model 6. Volume/Portfolio based Cost Model 7. Index based Costing Model Out of these, the most common costing model used in Commodity Purchasing in Index Based Cost Model.   In an Index-based pricing, the contract price for a commodity is tied

For decades, the capital expenditure (CapEx) model was defacto model for acquiring and implementing new information technology. Companies were required to make large upfront investments in IT infrastructure like servers, software, and data centers that they would then own and depreciate over several years. Also, In the traditional CapEx driven approach, companies purchased perpetual software licenses, storage hardware, and compute capacity based on projected peak demands. As