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Would YOU Buy a Ford Pinto Just To Get the Fuzzy Dice?

Today, I am going to take a stab at rationalizing why one could even consider solving a problem with a solution that is well-known to be sub-par. Consider the Ford Pinto: Would you choose this car for your personal, land-based transportation simply because of the new plush dice in the window? For my European readers, replace the Pinto with the infamous Trabant and you get my meaning.  The fact is, both of these vehicles made the list of the “worst cars ever built” due to their mediocre design, environmental hazards or plain personal safety record.

What is a Pinto-like buying decision in information technology procurement? (source: msn autos)

What is a Pinto-like buying decision in information technology procurement? (source: msn autos)

Rational people would never choose a vehicle this way. So I always ask myself, “How can IT organizations rationalize buying product X just because product Y is thrown in for free?” Consider the case in which an organization chooses their CRM or BPM system simply because the vendor throws in an MDM or Data Quality Solution for free: Can this be done with a straight face?  You often hear vendors claim that “everything in our house is pre-integrated”, “plug & play” or “we have accelerators for this.” I would hope that IT procurement officers have come to understand that these phrases don’t close a deal in a cloud-based environment. That is even less so in an on-premise construct as it can never achieve this Nirvana unless it is customized based on client requirements.

Anyone can see the logic in getting “2 for the price of 1.” However, as IT procurement organizations seek to save a percentage of money every deal, they can’t lose sight of this key fact:

Standing up software (configuring, customizing, maintaining) and operating it over several years requires CLOSE inspection and scrutiny.

Like a Ford Pinto, Software cannot just be driven off the lot without a care, leaving you only to worry about changing the oil and filters at recommended intervals. Customization, operational risk and maintenance are a significant cost, which all my seasoned padawans will know. If Pinto buyers would have understood the Total Cost of Ownership before they made their purchase, they would have opted for Toyotas instead. Here is the bottom line:

If less than 10% of the overall requirements are solved by the free component
AND (and this is a big AND)
If less than 12% of the overall financial value is provided by the free component
Then it makes ZERO sense select a solution based on freebie add-ons.

When an add-on component is of significantly lower-quality than industry leading solutions, it becomes even more illogical to rely on it simply because it’s “free.” If analysts have affirmed that the leading solutions have stronger capabilities, flexibility and scalability, what does an IT department truly “save” by choosing an inferior “free” add-on?

So just why DO procurement officers gravitate toward “free” add-ons, rather than high quality solutions? As a former procurement manager, I remember the motivations perfectly. Procurement teams are often measured by, and rewarded for, the savings they achieve. Because their motivation is near-term savings, long term quality issues are not the primary decision driver. And, if IT fails to successfully communicate the risks, cost drivers and potential failure rates to Procurement, the motivation to save up-front money will win every time.

Both sellers and buyers need to avoid these dances of self-deception, the “Pre-Integration Tango” and the “Freebie Cha-Cha”.  No matter how much you loved driving that Pinto or Trabant off the dealer lot, your opinion changed after you drove it for 50,000 miles.

I’ve been in procurement. I’ve built, sold and implemented “accelerators” and “blueprints.” In my opinion, 2-for-1 is usually a bad idea in software procurement. The best software is designed to make 1+1=3. I would love to hear from you if you agree with my above “10% requirements/12% value” rule-of-thumb.  If not, let me know what your decision logic would be.

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10 Responses to Would YOU Buy a Ford Pinto Just To Get the Fuzzy Dice?

  1. vincent says:

    great

  2. 蓝梦萱 says:

    of course

  3. dangqi says:

    of course

  4. Robert says:

    I had a 76 Pinto, the car was a workhorse. I even racked up over 230,000 miles. During those . those last miles I drove it across the country in a single trip – twice without any concern for its reliability for the task at hand. And one of those trips was through a national winter blizzard.

    The car was easy to work on, the only safety problem for all they years that I owned it was the fact that during the manufacturing process a staple had pierced the fuel tank on some (a simple fix). The following years when the Ford Escort came available, it used the same parts.and were a direct swap.

    The Pinto was only recalled and fixed for the Staple issue, affecting only a small percentage of the cars because a particular production run had used too long of a staple.

    Consider if you had to turn your computer or server in for every update. Ask yourself, What hot fixes/updates of your current software are you on? which patch of your current computer OS are you using? and why?.

    Sometimes we buy things because they are simple (really how many ‘new’ features of Microsoft Word are you not using but still paying for, or even Visio?) easy to customize, and well, fits the needs.

    The only reason I parted from my beloved Pinto was because the body rust due to the midwest snow salt, and the scarcity of finding replacement parts.

    That all said, I evaluate my products that I am going to buy or recommend. I get what I need, or make sure I can modify it as needed to fit my specific requirements.

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