Pay peanuts, get monkeys

It’s just one of those long and tiresome days when you come home and you start wondering about the beauty of carrot farming. Dear customer, I do love you and I appreciate your help in paying my bills, but sometimes you just manage to make me wonder whether it’s me getting it all wrong or you being shortsighted as a mole.

While I do understand how negotiation is important in the same cycle, you just don’t seem to realize how improvident it is to constantly ask for price cuts in professional services. See, IT is a strange beast: engineers are not fungible matter, and the value added by an IT services shop isn’t in providing you with between 1.3 and 1.4kg of brain cells that you can freely swap with someone else’s. Every company is different, with a different approach in recruiting, training and managing people: our task is leveraging the craftsmanship of the single person and providing some kind of common ground when it comes to methodologies, tools and infrastructure.

What you are buying from us is our ability to scout, coach and organize people. Start giving us some credit and consider that we know about market rules and rates, we know about economic equilibrium and our price list does reflect all that: it just includes a different secret sauce of training, skills, methodologies and intangible value added. Maybe, just maybe, we are not trying to rip you off: feel free to question us and understand the value we want to provide you. Don’t take our word for it. Be reckless in evaluating our skills Give us a lot of grief in proving our value. Have your IT staff grill us and understand if we’re worth our price. You might find out how asking for a fourth revision of the same offer and saving those 3.57€ per hour isn’t going to make any good in the end.

I can understand you want to shave every penny from your toilet paper supplies. I will sympathize when you tell me how you managed to strangle your hardware dealer. Heck, I will even have a laugh at the hard time you gave to your software vendors. All those guys are selling goods: they have different economic motivations, their pricing structure is built upon different terms and they have a lot of different ways to recoup from your price cuts. Moreover, once the negotiation is a thing of the past and the merchandise has been delivered, it will make little difference how much you paid for it and whether your supplier is disgruntled.

Things are different with services, though: what you are building is a lasting relationship with companies who work on an almost linear cost basis. If we come to help you building part of your IT infrastructure, we want to be your partner and have a mutual trust and a reciprocal motivation to work together. We will be with you for quite a while, and you definitely want us to be motivated and eager to help. If you’re strangling us, we might say yes for a number of reasons, but don’t expect us to be happy, collaborative beyond professionalism, and willing to go the extra mile.

When price is your foremost concern, the vicious cycle of IT services is going to bite you in no time flat: you will get overestimated engineers, little support when problems arise, demotivated people, underpaid programmers, untrained teams and sub-par performance. We will be in enduring friction and eager to leave if we get another gig on better terms. Your chances of a late and over budget project will increase dramatically, and you shouldn’t be that much appalled if someone gets as far as performing some creative accounting on worked hours when you’re not looking.

In a word, you will get what you’re paying for. Think about it, the next time you have a services offer in front of you.

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