It can be very difficult to explain ‘best value’ against ‘lowest price’ sometimes. Most asbestos consultancies have the same sort of overheads, staff are on similar salaries, they make similar profits and they carry similar levels of accreditation… so why are there such varieties in pricing?
We’ve seen computer generated reports that clients can’t make head nor tail of, poor customer service, areas not properly surveyed, inadequate detail etc. etc. etc. These all can lead to unplanned and costly follow up works making the original ‘competitive’ price very expensive indeed in the long run.
“You get what you pay for” seems a tired old cliché. An IT friend of mine directed me to this article recently which I found very interesting. Although it is dealing with computer programming costs, it is easy to see how it can also apply to most other purchases too.
Best value is something we know instinctively in our personal lives, (who amongst us has got the cheapest possible house, car, tv or hifi?) but somehow that common sense seems to desert us when we come to work. The articles argument basically says that organisations that buy in work too cheaply are often accruing ‘Technical Debt’ which is a term I had not heard before. Here is a short excerpt from the article.
“Technical Debt is a wonderful metaphor developed by Ward Cunningham to help us think about this problem. In this metaphor, doing things the quick and dirty way sets us up with a technical debt, which is similar to a financial debt. Like a financial debt, the technical debt incurs interest payments, which come in the form of the extra effort that we have to do in future development because of the quick and dirty design choice. We can choose to continue paying the interest, or we can pay down the principal by refactoring the quick and dirty design into the better design. Although it costs to pay down the principal, we gain by reduced interest payments in the future.
If you are an IT buff or just interested in the topic, the full article is here
So if your report contains omissions or too many exclusions, if the report is hard to read or understand, if it is incomplete, if the report takes longer to arrive than you had planned or raises more questions than it answers then you have acquired technical debt – and putting that right can cost a lot more than you thought you had saved when you took that lower price.