Technology On Price Alone

By Hillel Glazer



Purchase technology on the basis of price alone? In a word, "fuggedaboutit."

Unfortunately, when it comes to technology purchase decisions, often, business owners have little to go on other than cost.

Many business owners' decision-making boils down to answering, "What's it going to do to my bottom line?" which may further get diluted to, "What's it going to cost me?" This is a reasonable approach, except that we all know the bottom line isn't just a function of money flowing in one direction.

On the balance sheet, cost is a one-way line item, though the math behind "cost" that goes on in the business owners' heads really isn't just "cost," it's also accounting for the benefits, features and savings elsewhere on the balance sheet. So, really, the business owner is thinking about the bottom line, which has a lot more in it than just outlay.

Technology is frequently decided on cost alone because of four interwoven reasons:

1 Instead of comparing technical solutions

to the business's needs, business owners compare the options to each other. Most often, of all the various technical solutions available, only some limited number of comparable features and functions are shared among them. The various options aren't similar enough to each other to make comparing them and deciding on price alone a fair assessment of which one is "best" for the business.

2 Vendors and product marketing have de-

fined a value proposition appropriate to sell their wares. They define their market of users and buyers and sell into it. Their goal is to put business owners into their target market so that their product exactly fits the need - as they, the vendors, see it.

Closely related to this scenario, many business owners find themselves insecure in their implementation of technology. As a result, they are led astray by vendors who describe the features and benefits of their products in terms of business activities that the owner may not be performing. Your business doesn't necessarily need all of the product's features.

3 The high tech generation of products and

services has largely skipped over the consumer education process that typically preceded a sale in previous generations. In traditional sales, the consumer is alerted to a product and educated about it through advertising, articles and personal visits by salespeople and into showrooms. Once upon a time, this educate-sales cycle was the only sales mechanism out there and all consumers were part of it.

Today, business owners can easily do much of their own research, find vendors and products, and make a selection decision without ever meeting a salesperson or going to a showroom. Furthermore, the technology consumer is often making the entire purchasing decision and implementation completely alone and in the dark.

4 Business owners have not defined their

needs or formalized their business practices well enough to be able to match the right technology to their business at the right price. The previous three points are held together by this fundamental oversight. Without first defining what the owner's ideal business processes would look like, and without characterizing the activities and results the owner currently lacks, no technology solution can be applied with any high degree of certainty.

As before, closely related to this oversight is the not-so-simple matter of articulating the business owner's and business's needs to the technology vendors. The business owner thinks in business terms and the technology vendor generally thinks in technology terms. Getting to common ground as far as terminology and expectations is made even more difficult when the owner hasn't fully defined the problem she needs to solve and the vendor is looking to decorate its product to match the problem.

Business owners can do much to ensure they get the right technology at the right price. These four steps will allow owners to solve this dilemma with only a little up-front homework.

1 Before looking up a technology or call-

ing in vendors, define your need in two ways: (1) what can't you get done that you want to get done, and (2) what would your business processes look like if everything worked the way you wished it to.

2 Educate yourself, but not in a vacuum.

Talk to employees, advisers, neutral parties and trusted vendors about what you're considering. Though your situation may be unique enough to require a custom solution, it's likely that someone can cut through much of the noise down to just a few ideas from which you can make your final considerations.

3 When entertaining vendors, share your

needs and desires with them and specifically ask them to address how their product, service or solutions do or don't match your defined needs. Some vendors may have helpful suggestions you haven't thought of and can help you better define your needs and ensure the proper depth and breadth to the solution. When discussing technologies, keep your business processes foremost in your mind. This will ensure that you can relate the product's features and benefits to what you actually do and what you will actually use.

4 Compare technology products, services

and solutions to your business, not to each other. Compare them to how you want to work, the impact on your business, how much maintenance you want to do yourself, and whatever other subjective and objective measures are relevant to your business.

When making any purchase, cost is never the only consideration. At some point before the cost question you've probably determined that the items you're choosing among meet a minimum set of expectations. Technology is no different. Be sure you get the right technology for you, which is not necessarily what some other measure defines as the "best" technology for the market.



Hillel Glazer is the principal of Entinex, Inc., The Technology Strategy Company which helps non-technology companies make technology decisions. He can be reached at 877-ENTINEX, hillel@entinex.com, or on the web at www.entinex.com.