The Hidden Risks of Buying on Price Alone

Published: 15 March 2017

Are you comparing software project quotes from different suppliers? How do you make a choice when the solutions offered are similar?  Is buying on price the right thing to do? What else should you look for?

With unstable global markets, many businesses are under constant financial pressure. As a result, purchases are made with caution, especially when it comes to significant investments such as a new CRM or ERP solution. Buying on price alone is a common mistake, and here we explain why…

Comparing software project costs: cheaper is not always better

When comparing software project quotes and budgets are tight, the cheapest one can be tempting. However, this can be dangerous – here we discuss what can go wrong when you are buying on price alone…

Hidden Costs

Suppliers who quote a lower price at the start of the project may use subsequent change requests to recoup the difference, or charge for extra days required to complete the project. As a result you may end up paying more down the line.

Business disruption

If the software provider has underestimated the number of days required to complete your project, it is likely there will be overruns causing disruption to your business.

Quality issues

Some suppliers will not quote for scope and documentation. However without this crucial step, you may find what is delivered is not as expected and additional budget may be required to get it right. Extreme circumstances may include finding a new partner to remedy the issues.

Low staff morale

Badly implemented systems can slow your people down, impact performance and drastically affect productivity

Dissatisfied customers

If the system is unworkable it will not support your business processes which can lead to increased response times, errors and unresolved problems, which damage your customer relationships and your business reputation.

What to Look for Beyond Price

To make sure your project is successful it is important to find a partner who can provide real value for money. A good partner will take time to get to know your business and your processes to provide you with personalised advice and recommend solutions to suit your needs.

You need to ask yourself the following questions:

  • Can they demonstrate they fully understand your business requirements and processes?
  • Are they committed to you?
  • Can they demonstrate longevity?
  • Do they have a clearly defined project plan and methodology?
  • Can they provide references?
  • Have they received any awards that reflect their expertise and success?

Remember, choosing the right business partner is not just about a one-off project – a good partner will be with you at every stage of your business journey, offering actionable advice to help you grow. This is a very important step that can make or break the success of your project.

If you liked this blog, check out our handy guide discussing whether to buy from a partner or direct from the vendor.

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