I mean no disrespect in this week’s blog. I am not calling anyone names. I just have a certain style: blunt, maybe rude, abrasive, contentious. I prefer to describe my style as direct. I call things as I see them. I am not intentionally rude just sometimes a little clueless. Unless you really deserve it and you are toast. This is not one of those times. I repeat; I am not calling anyone names and mean no disrespect in what follows.
I borrowed the title from a consultant describing RFP processes and it resonated with me.
This is not to say that anyone in purchasing or contracting is actually stupid; it is not the people that cause the stupidity. It is frequently the buying process looking at the lowest price, as if all things are equal. Those of us in the ‘value’ crowd have lamented this mentality for years. The process is designed to simply pay the lowest possible price and frequently that lowest priced product doesn’t actually do what the end user needs done. Contracting officers or buyers are technically and emotionally disinterested in what they are buying so when a lower price comes along, it looks great! They will buy trash cans, chairs, pens and paper today and trucks, coffee filters and satellite phones tomorrow. While there are segments, there is little expertise and knowledge of what contributes to the highest value versus lowest price.
And that is the problem: if the mandate if ‘lowest price’ wins but the lowest priced-solution is inferior, you have a very short-term result. I’ve used this example before: Which is better:
Paying $100 for a solution that last one year or $300 for a solution that lasts five years?
Choosing the former, rather than the latter is just plain stupid – in plain English. Why would you spend $500 over five years when you can spend 40% less over the same five years? That solution represents value.
So don’t buy on stupidity: take a close look at the total cost and the overall value of what you are buying. This will help you make a good decision that will save your organization time money and aggravation.
And that will be the smartest decision of all.
Thanks for reading.