Imagine for a moment that you are the CIO of a medium-sized business and that one of your strategic goals for the year is to reduce your physical hardware total cost of ownership. To achieve this goal, you decide to select a server virtualization software provider. You’ve done your due diligence, and you have a short-list of potential companies / products that you’d like to consider. Like any good executive, you give this list to your team to conduct initial interviews and gather pre-defined metrics so you can select two or three companies to conduct an onsite evaluation and demonstrate their product’s capabilities.
After a week or so, your team reports back to you with a spreadsheet of collected information, and briefly walks you through their findings and recommendations. “Why isn’t there any information for Acme? I was really interested in learning more about them – they seemed to be a viable option for us based on their website.”
The answer from your team catches you by surprise, “They said that we likely were not a good fit for them,” your team lead responds. “What prompted them to come to that conclusion?” you ask.
“Well, they asked us the names of the other companies being considered. When they heard the names of the competition, they told us that it appeared that we were going to select a partner based predominantly on license expense, and not on ROI. “We told them we had not developed our selection criteria yet, and they responded that, based on their experience, that is where we should begin. They told us that if our selection criteria only considers software and services costs, then they feel it is in our respective interests if they declined to respond.”
“So, Acme believes we are shopping for the lowest cost provider? Of course we are going to consider cost as part of our selection criteria.”
“Yes, they acknowledged that cost is an important consideration, but it is only one consideration. Their point was that we have not identified how we are going to measure value. The example they gave is, would you rather pay $5 for $10 of benefit or $50 for $500 of benefit? Since we don’t have our criteria defined, they don’t know if we are considering ROI as part of our criteria, nor do they know how ROI is being defined. Given this, they did not think it made sense for them to participate at this time.”
“Hmmmm, I think Acme has a point. All right, let’s schedule a meeting to define and prioritize our selection criteria. Once that’s done, let’s reach back out to Acme and see if they are interested in responding.”