Something I've been thinking about recently is the difference in the way most companies buy software, and the way they buy services.
When it comes to buying software, most companies think about what it is they need and carefully compare the features of each potential product. Most will consider other factors such as the product's market share, support costs and the general reputation of the product. And then, once they've narrowed down the candidates, price is typically the deciding factor.
In contrast, when a company makes a decision on who they employ to provide a services they typically consider one thing... price.
It's not just companies that think this way, consumers make decisions like this every day. When looking for a new MP3 player or a TV, people shop around and compare features before deciding on the product that suits them best. And we'll happily pay a little more for a superior product. But when looking for an accountant or someone to build an extension on the house we tend to ignore all other factors and cut straight to the case... how much will it cost?
Thinking this way is crazy! It assumes that all services are provided with the same level of quality and produce the same result in the end. And this couldn't be more wrong! Choose the cheapest accountant you can find and you could end up in jail for tax avoidance. Or choose the wrong builder and that new extension to the living room might not make it through the next storm.
When companies recruit staff they interview all the candidates and and choose the most skilled and experienced candidate for the job. They don't just ask each candidate how much they want to be paid and then choose the cheapest. And yet when choosing a service provider this is exactly what they do. They ask a handful of providers to submit a proposal and then choose the cheapest option. And sadly this often ends up being a company in India who charge $80 a day for a developer.
The problem with this approach is that not all service providers are created equal. Some provide an excellent service and produce quality results. Others take all your money and deliver very little. But as a service provider how do you make this clear to potential customers and differentiate yourself from the crowd.
To be honest, I haven't quite figured that one out just yet. But when I do, I'll be sure to let you know.