Data to a business is like nutrition to a human: a vital ingredient for health. The quality of the data ultimately determines how much an organization can thrive. Unfortunately, many of today’s enterprises are subsisting on junk food and empty calories because they lack reliable and detailed information of their IT spend.
Companies that have implemented multiple ERP systems, have undergone several mergers and acquisitions, procure IT services from numerous divisions or rely on several layers of resellers are subjected to ever-increasing shadow, redundant, rogue and unmanaged spend. For instance, a company may purchase IT services from a vendor such as Dell directly and through 10 resellers. Since these resellers’ purchases from Dell are uncoordinated redundant spend invariably arises.
For many businesses, IT costs are the largest or second largest component of SG&A expenditures. And vendor costs represent the dominant portion of IT spend. Companies can’t exactly go to their vendors and say, “Please point out where we can reduce unneeded spending on your services.” When companies realize the IT bloat has begun to metastasize, some enterprises have resorted to the only option they can find: consultants pouring over data for months, delivering reports that are outdated as soon as they are written.
CXO Nexus founder and CEO Ken Male set out in 2017 to confront the data issue. “I have seen first-hand the inability for companies to have true visibility into vendor spend. This results in millions of dollars of excess spend each year that they don’t know about because they can’t see it. None of today’s financial systems can solve this because you need to turn the problem upside down,” Mr. Male said. “You can’t look at high level ‘vendor totals’, you need to start at the line item level for each and every transaction. The only way to solve it is to build from the product level detail up.”
While something like this would have been impossible just a few years ago, the rapid pace of development of Artificial Intelligence and Machine Learning has opened a whole new horizon of business opportunities. Using patent-pending AI and ML, CXO Nexus normalizes the data from all enterprise systems, aggregates it, and displays it back in a way that simplifies C-suite decisions. The result is a clear set of data that is one of the fastest boosts to expense reduction and a business’s health.
John Lark joined CXO Nexus in 2019 as the President and COO. Mr. Lark shares that he has seen many customers have multi-million-dollar benefits in a matter of weeks, and that some customers are finding up to 50% of their actual IT spend hidden by confusing vendor relationships, purchasing through resellers, and rogue spend.
And it seems to have been a sound decision. CXO Nexus has seen demand for its SaaS solution increase 10-fold since March. “Cost Optimization never goes out of style,” said Mr. Lark. “Many companies realize that a $1M cost reduction has the same impact to their earning per share as a $4M revenue increase and we are the fastest way to do this without cutting headcount.”
With customers like Nasdaq, Horizon Media and One Main Financial already realizing huge returns from clarity around their IT spend, there is little question that New York and Silicon Valley-based CXO Nexus is ramping up for big gains with a new product release later this year. “When you think about the value of this reliable data, we see multiple revenue streams that will serve the needs of enterprises, suppliers and investors,” said Mr. Male.
While fad diets come and go, it’s pretty clear that being able to clarify data in near-real-time, cut costs in weeks, and give previously-unavailable insights to decision makers is a business lifestyle change that enterprises will soon find they can’t survive without.
August 8, 2020
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