It’s generally a rule that if you’re going to make an investment in your IT or if you’re looking to change providers, you should get 3 quotations.
Naturally, you’d look at those quotations objectively, do your due diligence on the businesses’ financial stability and reputation and not be drawn by the lowest figure. But then what? Here are some points for consideration next time you go through this process…
Compare apples with apples – in my experience, even when you provide clear objectives to the vendor, the quotes that arrive in your inbox can be quite different from each other in their approach, the products used, the pricing and they’re usually very difficult to compare at a glance. You should go through the process of putting each quote into a format where you can compare apples with apples.
Hidden costs – It’s so very easy within the IT industry to satisfy the client’s basic quotation request and tick all the boxes, but because of some providers’ cultures, bad habits, sales techniques, errors and sometimes (but rarely) even a deliberate act, some costs can be omitted. At the end of the day, all you want as a business is a job done for a fair price and no surprises. Having 3 quotes can help you identify any hidden costs.
Labour costs – We all know that in the world of IT, things don’t always go to plan, so keep a lookout for different quantities of labour and how labour costs are detailed. Is it an estimate or is it a quotation, is it fixed, capped, are there any conditions attached, are there any exclusions?
Scalability, Limitations, Lifetime – Watch out for limitations on the products you’re being quoted for. For example, there could be limits on the number of users, limited upgrade potential, limited features, an imminent end of life date for the solution, any of which could mean you have to start the whole process again sooner than you’d like and it will end up costing your business significantly more over the next few years.
Errors – it’s common that errors are made, it could be in your favour or theirs, but ultimately no one wins. Expectations are incorrectly set for both parties and it can start your long term business relationship on a rocky road right from the outset. It’s key that any errors are spotted right from the outset, even if it has to be you, and even if it’s not in your favour!
Detail – is there enough technical detail in the quotes to enable you to carry out a fair comparison of the solution or service? ‘Server – £1,000‘ or ‘Cabling for Sheffield office – £3,000‘ will simply not do and it will make it impossible to compare. Also ask yourself the question, “why is there no detail on the quote?”.
Disruption – Provider A may quote 2 days of labour for installing ‘X’, provider B may quote 3 days for installing ‘X’. Provider A requires all staff to be off the system for 2 days, provider B requires no disruption at all. Knowing the difference can dramatically tip the scales between the quotes.
Marketplace – are you being quoted for the best products in the marketplace that suit your organisation’s needs, or are you being quoted for what suits your provider best?
Relationship – there’s no doubts that a huge part of having an IT system that you can rely upon, is the relationship you have with your IT provider. Do check out their reviews, their social media accounts (quite an important one is this I think as it is a great platform to show off some of their personality as a company that often isn’t on their website), ask for reference sites, meet them face to face, go and visit their facilities.
Aftercare – The quote may be the lowest, but the aftercare may be the highest. Ensure you consider both aspects in your calculations and that all SLAs satisfy your business needs. SLAs can vary greatly.
Grants and schemes – are the companies who are providing quotations to you aware of current grants and other government schemes available in your area to help your business during the procurement of IT hardware, software products and professional services?
Payment terms – whilst this doesn’t directly impact the price, it can have a very positive effect on your cashflow if you can have 90 days terms instead of 14, financing options, or the facility to pay in interest free instalments.
To conclude, always get 3 quotations when investing in your IT or reviewing your providers, but also consider all the other angles as discussed above to ensure you’re getting value for money, achieving your business objectives and that you’re getting the right solution from the right provider without increasing your anxiety levels.
If you would like some objective assistance comparing quotations from someone with technical, commercial and accounting experience, contact me, Chris Lord, The Virtual IT Director today.