You get what you pay for. Really?

I have learned the hard way those tempting bargains are not what they really seem. Whether it was a cheap used couch or the latest electronics from an unknown (and untrusted) brand, life is littered with examples of where spending more actually ends up costing less in the long run. Buying things over and over because they keep breaking gets costly. With few exceptions, it is usually cheaper to spend a little more money up front to buy the quality trusted product.

Does the same hold true for software services? Certainly great strategists and developers are hard to find and they are more expensive to keep on the payroll. Therefore, their services naturally cost more. But there is a limit. There is a level where returns on the service diminish when costs get too high. Who wouldn't love to have Mike Holmes as their home renovation contractor? However, does it make any sense to pay more than his television contract to fly him out to your remote cabin in Northern Saskatchewan to fix the patio steps? Likely not and if you shop around there's a good chance of finding a better cost alternative for someone equally willing to "make it right".

There is no question that planning and developing a higher quality web site that addresses your business goals is not something you want to engage your friend's nephew working out of the basement while finishing High School. You look to the vendor and partner eco-system for the best qualified to take on such important tasks. But before you get swept up by flashy presentations and bubbly personalities do your homework. Look around and ask:

• Does your approach include a strategy engagement that will directly tie business strategy to online strategy? And don't just stop after they offer a quick and assuring "Yes, of course". Ask for evidence with other customers who had their business positively impacted by the work delivered. Ask about their strategy processes in detail as it's the most critical part of the project engagement. A pretty web site with a good IA is of no value if it doesn't map to business strategy and engages the intended audiences.
• Is your organization willing to work with our staff to share knowledge and look at creative ways of keeping costs in line? A consulting organization that wants to do everything and not share the knowledge is likely working towards their best interests, not yours.
• What are your rates (hourly, daily, fixed cost, etc)? $200/hour is not expensive if that person can finish their tasks twice as fast as the competition. However, AND THIS IS AN EXTREMELY IMPORTANT DISTINCTION, if your service provider is providing high hourly rate resources for the same or similar duration as the competitors at 50% less you are not receiving value. It does not matter if that person has worked at 10 other high profile customers. All other things being equal, a consultant's value comes from being as efficient as possible. Experience is important but learning from good experience to be as efficient as possible is where the value is . If you are comparing one service providers apples to another's the costs should not be 50 – 100% higher.

I have been consulting for over 15 years and, without bias, have been impressed with how non-linear creations keeps their customers best interests, and money, at heart. NLC also has over 15 years of expertise in delivering on the value promise. Delivering value is more than adopting what is read in business books; its providing the evidence of that experience and ensuring the service provider truly cares about your business success.

Comments

[Kelly Lautt]

The message that success is about delivered value and driving toward actual business goals is a powerful and important message. The advice to ask about the actual approach to strategy development (and strategy alignment... as in aligning the project strategy to the corporate goals) is stellar. It is very common that either 1) partners ignore strategy and jump to planning and implementation or 2) go off on a huge strategy pre-work project or set of workshops without any real focus, experience or skill in the area. Strategy development isn't just listing the things that need to get done (a common mistake). It is a clear, implementable and organizationally appropriate statement of approach to achieving goals that should cover all related areas (not just software, implementation and immediate user requirements).

I have mainly picked out one point of this post to comment on, but the overall message is important as well. Make sure your potential partner can explain their differentiators (why they can provide better service to you), especially in terms of how their experience, templates, approaches, knowledge, techniques etc. provide optimal value. A cost should provide a larger immediate and/or ongoing return and your consultant should be able to explain how their approach will do that. If you can see and understand what they will provide and how that will provide large value for low cost and effort, you can easily judge for yourself.

My interest is around success and value optimization around Business Intelligence instead of web sites, but a lot of the messages are very similar around focusing on the right things when launching into IT projects whose real value is in fulfilling or driving toward business goals (see my blog at http://northstarbi.com/blog)