Ask the Board – October 28, 2019 | JOSEPH McQUEEN

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“What are effective cost-reduction strategies that can be employed with digital signage to keep your capital investment and maintenance low?”


The strategy we use to contain costs is to leverage our company strengths rather than have external consultants do the work for us. We accomplish this in a number of ways:

  • Develop internally: Most of our digital signage solutions are developed internally using our staff. From external LED, internal LED, video walls, and single screens, we design and engineer everything. Doing this takes an investment in staff and training to get them there. However, by doing this, there is a direct savings from having a third-party develop and build the solution. Double bonus is that since the internal staff understands the nuts and bolts, they can better train first-level support staff on what actions to take instead of requiring third parties to maintain the installation.
  • Leverage Buying Power: We have an internal team responsible for purchasing products. By leveraging this team, we can save a tremendous amount over buying from a third-party. We’ve seen savings of more than 30 percent by purchasing direct over what A/V vendors typically charge.
  • Leverage Logistics: We used to leverage third-party relationships to stage and deploy equipment for our solutions. However, we found that executing at arm’s length limited our control and impact while also increasing cost. We discovered that we already have a lot of that capability built in, so the function was moved to our own distributions centers. This has provided a good number of benefits: We grow our internal people by having them stage equipment, increasing career opportunity. We leverage our existing logistics networks; since we’re already shipping to stores from our distribution centers, costs are lower and ship times are more accurate. We leverage our space; by using our distribution centers, we eliminate the need to pay for storing equipment. Additionally, from a maintenance perspective, we keep spares in these locations and can usually ship them two-day ground, while third-parties often take a week or more to get the replacement part.

It takes a while to build this capability, but by investing in our people, playing to our strengths, and getting creative, we save over 50 percent from having outside firms do this work. At the same time, we can better support and maintain the solutions we deploy, keeping our brand reputation high and within our control.

 

About Author

Senior Manager of Network Services
American Eagle Outfitters

MEMBER OF THE DSE ADVISORY BOARD
End User Council

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