Test Your Tech Vendor’s Ability to Value Their Solution
CIO magazine seems to think that comparing TCO (total cost of ownership) and ROI measures reflects on the maturity of a company:
“When you think TCO you don’t see IT as a business driver or an asset that can increase revenue, profit or customer value,” says Anthony Giannino, a consultant at Cornerstone Solutions , a value-added reseller in Chicago. Giannino was CIO at pharmaceutical distributor Alliance Wholesale from 2002 to 2007.
TCO seems to be a way to compare alternative technology projects whose scope is the same. I heard a lot of this in the selling of hardware because the comparisons of the product were more easily arrived at. I don’t think TCO is useful when the “product” becomes more of a technology solution which has variations in scope, software cost, services costs, and solution fit with the business that tend to cloud comparisons. In these cases I think that a clear criteria ought to be the vendors ability to do a “hard dollar” value assessment that means something to the company. This should be done with plenty of ownership by the potential client and agreement on the business processes that are technology enabled along with the value.
It doesn’t take any fancy calcultation or a mountain of value points to make the financial point. The best value statements are those that focus on a few key bottom line areas that are high value- a simple cost versus benefit analysis over time is all that is needed as long as the project is relatively short - 1-2 years.
What do you think? Can you give an example of a simple value assessment and value statement that you worked with a technology vendor on? Did the vendor’s ability to do this with you score points? Let me know about your technology solution evaluation experiences.
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Tags: pharmaceuticals, projects, ROI, TCO, total cost of ownershipRelated Stories
POSTED IN: 101 Basics
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