Recycled Bullsh-IT

With a subdued and slightly desperate festive season well underway and a distinct financial chill in the air for many, I thought that I would add to your seasonal cheer with some advice on buying on the cheap. Everyone seems to be looking for a bargain, either to meet their restricted budgets, or to be able to brag about the great deals they have found.

 When it comes to business expenditure, there is undoubtedly a softening of prices from some IT vendors (not all – see The Customer is ‘king Furious), and it would be tempting to push hard to get lower costs from the increasingly desperate suppliers. However, I would just like to sound a cautionary note for those tempted to get carried away here.

 With confidence reducing, and budgets being cut, it is reasonable to share this pain around. Looking to reduce unnecessary or waste costs is always fashionable and will look even better right now. Your suppliers will naturally be more than willing to help you with this, no? However, I have noticed a curious set of behaviours in this dance that can have significant consequences for your future supply chain.

 Your best suppliers are the ones who really value your business – helping you plan effectively, and providing advice, guidance, and other beneficial added services. They will undoubtedly be aware of your budgeting issues and will help you in creative ways to achieve more with less, quite often at their own expense. At the other end of the scale, there are those suppliers who are more a necessary evil (described in Partnering for Profit or Pleasure) – those on which you have a critical reliance or who monopolise the provision of some vital IT component or service. These bloodsuckers will know the leverage they have over you and will laugh in your face at any request for a discount or a price reduction.

 So, what happens is that you push your true partners harder for discounts, because it is easier, which in turn causes them problems, and possibly puts them out of business. Even if they survive, their attitude to you will change and you will find that all the extras they did for you in the spirit of partnership become chargeable or are no longer offered. This will eventually lead to all your suppliers treating you as a chequebook not a valued customer. With no effective relationships with your key suppliers, life will become more difficult and more expensive for you.

 Imagine a different scenario, where you work actively with your best suppliers to reduce costs, whilst ensuring they retain sufficient profit to stay in business and put your efforts into removing your dependency on monopoly vendors (or setting up alternative options with your best suppliers). Removing this dependency will quickly reduce your costs and gain you more responsive suppliers, who can help you drive your business forward rapidly during the coming upturn.

 So which Scrooge are you going to be this year? Bah Humbug, or the one who saves Tiny Tim?

 Have a Merry Christmas!

John “There Ain’t No Sanity Clause” Moe