Some highlights:
- Fortune 100 companies manage their ITAD process differently; some are robust and rigid, while others may not have the same level of attention.
- It can be difficult to get a customer to switch ITAD vendors due to the cost associated with changing over.
- Incumbent ITAD vendors can be hard to replace due to the complexity of the RFP and piloting process required for introducing a new partner, as well as hidden costs like flying personnel for auditing and managing that partner.
Todd’s assessment:
Todd Zegers,
President & CEO
Circular Integrity
info@CircularIntegrity.com
(949)346-1683
It’s a mixed bag. I would tell you if you interviewed the Fortune 100, you probably get 97 different answers on how these guys are managing. And I mean that literally because you know I’ve seen large fortune 20 organizations who have a very robust, very strict, very rigid global process that everybody adheres to. You’ve got your primary vendor who’s going to get 80% of all the stuff. And then you have to have a backup vendor that’s going to get 10% or 20% of that, because what happens if vendor number one has problems, you have to have a failover mechanism in place.
For some people, that’s probably a single source. You know you’ve got someone as good as that, and then you’ve got another Fortune 20 down the street whose warehouse handles all the inbound shipments, but who just gets the guys that are just dumping the waist in, whose giving it to the guy down the road who’s issuing a certificate and who probably has no insurance and probably may not even be doing the right thing with the devices.
So the level of attention that ITAD gets in any Fortune 1000 company is a mixed bag. I think the good and the bad of being in the ITAD business is that the bad is it’s really hard to get a customer to want to switch, and the reason I say that is if you’re a large Fortune 100 and you’re spending $600 million a year in your IT budget and you’ve got a vendor doing your ITAD today that maybe at no cost or low cost, maybe you’re getting a few dollars back, as long as nothing is bubbling up and there’s no massive problems, they’re not going to switch. It’s a complex process to switch over.
The good of it is if you’re the incumbent, it’s very difficult for your competitors to get in there and try to take that business away from you, unless you’ve got a really compelling answer to why we should even go through this exercise to save $50K, $100K a year and they’re going to throw $250K of soft cost to try to go to an RFP and interview process, to go through the contracting process to pilot the ITAD partner and to bring them on, to fly your people to all their facilities to audit what they’re doing. And then manage all that. There’s a lot of hidden costs that people have to account for when you try to bring on a new ITAD vendor if you’re a large organization.
