Suppliers should be chosen on Value, not Price – Here’s why

This may seem like a strange Monday Tip for a blog focused on Business Continuity Management and Business Continuity Planning, but it actually makes a lot of sense. Here’s why.

What is Value

Value, or Value for Money, is a better comparative measure than price in my opinion. Value is a slightly subjective judgement in that it can include objective measures like price, but also includes subjective judgements like quality of customer service, ease of doing business, etc. It’s these subjective measures that are the reason that I think Value is a better consideration in the context of Business Continuity Planning.

Why is Value important?

Consider the following scenario:

Your Internet connectivity has failed, causing a break in both inbound and outbound email. (Oh, BTW, your business depends on low latency email)

You’ve done all the normal local checks and established that the problem lies elsewhere.

You now have two actions to perform:

  1. Find out why the Internet has gone down and get it back ASAP
  2. At the same time, get an alternative path working for high priority email whilst the primary route is being fixed

If you are a small company, then the chances are that it will be the same person responsible for both activities.

Let us now consider two possible support routes:

  1. You could have gone for the lowest price option when selecting your Internet Service Provider.The chances are that your support route involves hanging on the end of a premium rate telephone number for a service desk that is shared by many thousands of users. Even if it isn’t a premium rate line, you could still be listening to Vivaldi for some time and then have to explain the problem a number of times as the call is routed between various support functions: all of whom are trying to get you off the line with the minimum of effort on their part.
  2. However, you could have chosen a smaller, local, ISP who offers a more personal service when things go wrong.Your support route now is to call your contact at said ISP and probably spend far less time on the telephone. They will probably know you and will be able to take on the responsibility of getting the problem solved.

You probably paid more for this second approach, but it releases your single resource to concentrate on setting up the alternate route using 3G, dialup or whatever. The net effect is that your email starts flowing sooner and your business suffers less.

The importance of getting some level of service back soon

Business Continuity Planning is all about understanding the degree of disruption your business can tolerate without the business suffering substantial financial loss or damage to reputation. Knowing that you have access to a real person who cares when something does go wrong can be a considerable advantage to a small company that has less in the way of spare resources.

Summary

It is always tempting to go for the cheapest option when selecting what appear to be commodity services like Internet service provision. Improve your chances of survival by comparing value instead of price and taking into account the speed with which you can recover from a problem.

 


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5 Responses to Suppliers should be chosen on Value, not Price – Here’s why
  1. New post on Business Continuity UK: Suppliers should be chosen on Value, not Price – Here's why http://t.co/BXUK7SmN

  2. Rule 1 RT @GarethHowell: New post – Business Continuity UK: Suppliers should be chosen on Value, not Price – Here's why http://t.co/4CxJ2l63

  3. Suppliers should be chosen on Value, not Price – Here’s why | Business Continuity UK http://ow.ly/6FnzU

  4. Suppliers should be chosen on Value, not Price – Here’s why | Business Continuity UK http://ow.ly/6FnzU

  5. Choosing suppliers on value not price http://t.co/vj92DTY3 worth a read

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