Can we save money by buying faster?

You have been through some tough times in business lately and every dollar counts. Could it be that every minute is more important than every dollar? Just how much are those minutes worth?

Hardware sales are down, which has large companies downgrading revenue and profit targets. Combine that with the trends of tablets and other BYO devices and it is changing the game for hardware sellers.

When computers were introduced to business they were a high-price, high-margin item. Today they are a business commodity with very low margins. As a result, shopping around for a better price may not be as productive as we think it is. I have observed an interesting trend in IT purchasing by internal IT procurement people or business owners of small businesses.

There is a tendency to shop around for a great price on IT systems. However, it is often hard to get a consistent model to do a comparison and so understanding those differences can take many hours before you are comfortable enough to purchase.

I ask you to consider the cost of that effort and compare it to the benefit gained. Price difference between a cheap PC and an expensive PC is only a couple of hundred dollars. So if you value your time in the business at some low rate like $50 per hour it will only take half a day of shopping around to remove the advantage or benefit gained. Over the four years of ownership of the computer, chances are the more expensive machine would have a greater productivity return.

My suggestion here is that you or your procurement people would do well to find a trusted supplier and take their advice on what you need.

I hear your cynical sneer, ‘yeah, so we get a good deal on the first PC and then the price sneaks up continuously until we change suppliers’. Today, this is easily offset by the occasional check on price of a quote given using one of the shopper bots online. You will find only a small premium is added for the personal service of selecting the right machine. There may even be local stocks to draw on quickly.

Of course, we have all read recently that PCs in Australia cost some 37% more than the same model in the US, so we need to make sure we are comparing local prices. But it is the distributors who control the pricing not the end retailer or reseller.

An even better idea to reduce the cost of purchase is to batch your purchasing. Wait until you are able to order a few PCs in one go rather than buying one or two a few times each year. This will lead to better consistency between your devices and a lower cost of maintaining the fleet.

Large businesses buy their PCs in bulk, often storing spare ones in the supplier’s warehouse to ensure consistency of fleet. This investment in capital equipment is deemed worthwhile for big reductions in the cost of fleet management. In small business we probably can’t afford to go to this extreme, but we can do a lot to drive consistency in our IT fleet.

If you deal with a business that supports thousands of computers, ask them which ones give the least trouble. Metrics should be available to help you reduce your maintenance costs and the impact of IT outages.

Once you have a trusted reseller you will be able to ask for the specifications you require and get the right machine capabilities and connections, the all-important ports of choice from PS2 to HDMI and everything in between. When you have a unique combination required for that machine that will sit in the display suite with a POS system attached for training, you know it will only take a quick request to get the advice required.

If we extend this philosophy to other IT and business decision-making, building a list of trusted advisors and suppliers possibly with pre-quoted rates can enable more efficient purchasing and drive more productive business. So don’t waste your day on endless shopping. Focus on the big decisions and get on with driving your business forward.

David Markus is the founder of Combo – the IT services company that ensures IT is never an impediment to growth.

 

You can help us (and help yourself)

Small and medium businesses and startups have never needed credible, independent journalism and information more than now.

That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.

Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.

Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.

Trending

COMMENTS

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments