Over the years I’ve heard (and perhaps you have too) someone occasionally comment from a non-LOGIS entity something like: “LOGIS? – Yeah, I’ve heard they’re good but expensive!” Sound familiar? I’ve even heard similar comments from a department that doesn’t use LOGIS applications, yet they are a LOGIS member none the less.
When we compete for business, especially responding to an RFP, we usually don’t appear to be the cheapest solution. Why is this the case? With the number of members participating in the shared LOGIS applications this certainly reduces the costs each pay. So, shouldn’t this allow us to quote even lower costs to potential new members vs. what vendors quote?
Well, many of you know that LOGIS is a total cost of ownership model. But put another way, LOGIS was structured by its Board of Directors many years ago to be an overall service organization, responsible for ALL aspects of providing application technology to our members. This means that we don’t just provide the software and hardware. We are structured to handle additional responsibilities such as the network infrastructure, data communications, security, local support, PCI compliance, disaster recovery, a CIP program to replace all hardware and many other services. To do all of this, our costs reflect the provision of these total services. Far beyond what is provided by private sector vendors.
One example mentioned above: LOGIS must provide a disaster recovery site. This means that most applications have duplicate servers at that facility which are running and ready to be a fail-over environment allowing for business continuity of our applications in the event of a disaster. It also means that all of the data used by most of the LOGIS applications are mirrored simultaneously at both sites. And of course, the data is backed up on a daily basis.
Now if we wanted to undercut the competition, it would be easy! We’d simply reduce the number of services we provide. Dropping that disaster recovery service; eliminating hardware replacement cycles, assistance with networking issues, unlimited training, etc. would significantly reduce our costs and therefore what we charge. Our members however have made it pretty clear. The reduced service approach is not why they joined LOGIS. They realize that any of those services no longer provided by LOGIS would need to be replaced by each member, sooner or later, along with paying more for that assistance or service.
LOGIS isn’t more expensive when comparing equitable service levels. Because our members share in those services, LOGIS is by far more cost effective than any other entity or vendor, local or national.read more
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