A cost first mentality will land you in last place

Is the first item you review when making a decision the cost?  Do you think in terms of what you can (or can’t) afford?  When choosing between alternatives, is cost how you order them?  Approaching business decisions with a cost-first mentality can be very limited, especially when looking at technology decisions.

Let’s start with the fact that commodity items ARE typically ranked based on cost.  There is no reason to pay more for these items, as you will not get a higher return on your business by paying more for toilet paper!

The issue with looking at cost first is that it severely limits what is POSSIBLE in your business.  It also means that you work with vendors, not partners….another way to ensure there is no value added to your business relationships.  Shifting your approach to an INVESTMENT based mentality will provide a better framework for making business decisions.

Technology decisions should be evaluated based on their potential return for your business, not a cost first mentality

A great example of this is the now common desktop computer.  The cost first mentality says, go to the local Best Buy and pickup whatever is on special.  The proper way to look at this is to ask:

  1. What job functions are supported by this equipment
  2. Will an increase in output (for this job function) result in higher business profits
  3. What is the TOTAL lifecycle cost of this equipment

Your sales folks will be more productive if they have business-class equipment, with longer battery life, flexible form factors (think tablets), and reliable hardware components (less downtime).  The same cannot be said for your customer service positions.  They need to run a basic set of applications and need to be easy to swap out quickly in the event of failure.  This simple example should provide a framework for making almost any business investment decision.  It applies the same to software, services, and other purchases. Prefer an investment first mentality over a cost first mentality, when at all possible.

Don’t let what your cost is today limit what you may need to invest tomorrow!

Absolutely nothing wrong getting more for less, it’s one of the greatest things about technology!  Why would we pay $800 for WiFi….the last one we bought from Best Buy was only $59.99?  Well, because there are very real differences in these two products.  #3 above becomes material very quickly when discussing hardware purchases.

Where this starts to matter is with technology SERVICES.  It is a lot harder to quantify the differences between service offerings.  Often the super magical CompleteCare package is marketing speak for workstations patching and anti-virus, hardly a differentiated offering in today’s technology space.  It will take a more savvy buyer to understand if there are any differences in what services are being offered, and if that’s too much work, then we fall back on COST. 

Don’t let this happen to you! It will limit your opportunity to partner with firms that will provide increased profits to your business.