Through most of my career I have used one type of software package and I was very proficient in its use. I knew I should have tried other packages but I didn’t get around to doing that. I was, however, rather interested in one particular suite that was gaining significant market share. I asked some of my colleagues why was it so popular. All they said was that it costs much less than the competition. That was completely understandable. It is always preferable to get any product or service at the lowest price. Or is it?
I finally got the chance to use this software and I was surprised with its functionality. Some of the basic functions were quicker to use than the software I was used to but I found it to be frustrating when I performed more advanced tasks. I told one of my colleagues about my findings. He had used this package before learning the suite that I’m used to. He mentioned it’s shortcomings and said he preferred the other software, despite it being more expensive.
Before I continue I would like to state that I’m not endorsing any product or service over another. The purpose of this post is to demonstrate considerations that may not be present in the selection process of products and services.
When ever I performed an advanced function the programme would execute differently to what I wanted. Eventually I discovered a technique to work around this shortcoming but it would take at least three times longer, depending on the complexity, than on the other programme. This definitely had an impact on productivity. The company saved money up front with the purchase price of this software but a portion of it’s operational costs had increased in comparison. I would wonder if the equivalent cost of extra time to market was less than the price difference of the other software suites. I was certain it was not considered.
I’ve witnessed the same thing with other products with differences in maintainability, reliability, security as well as other factors. For example, if the selected equipment requires a more frequent maintenance interval, longer maintenance period, or breaks down more often then the initial purchase savings would be erased by the maintenance costs and the costs associated with downtime. If the security capabilities of the selected system is not a robust as the higher costing competitors then the resulting costs due to breaches will be significantly higher than the initial purchase savings. The downtime needed to mitigate damages, fix the vulnerability, or replace the system could be very long, therefore, adding considerable cost and adversely impacting productivity.
A somewhat similar situation could also arise when companies move their operations to low cost centers to take advantage of lower labour costs. If the lower cost labour’s skill set is not near the level of your domestic labourers then quality and training costs will be much higher. If the lower cost labour does not possess the same level of diligence as your domestic employees then problem identification would be greatly reduced. Problem resolutions would only be accomplished by a select few rather than it being a combined employee effort.
Over the long term (or even the short term) these extra costs could easily exceed the initial savings thus eliminating it’s cost advantage. With that in mind, it is extremely important to consider the long term impact of any performance differences between competing products, services, or regions before deciding. Also, if it is decided to change a product, service, or region after discovering the extra costs associated with a performance difference then there will be the addition costs of switching, in terms of set up, training, logistics, et cetera.
Productivity Aspects 