A great deal of large companies place a huge focus on cost as a part of their purchasing policies. While that might seem like a great way to ensure you get the value that you seek, it’s a little bit backwards.
The typical process involves obtaining multiple quotes, and selecting the “best offer”. A solid idea? Sure. Unfortunately, for most companies the “best offer” is chosen solely based on price. To be truthful, this process is perfect in some circumstances. In particular, when purchasing commodities like pens or paper or televisions, the end product is the same – the price is all that counts. For everything else, though, basing the decision solely on price makes no sense.
If you take a broader look at the purchase, you can make your decision based on vale. For example, rather than purchasing cars, you might really be seeking a solution for staff travel. If you compare several suppliers purely on price, you exclude all the non-price aspects that differ between vendors. Compare the features and benefits each supplier brings as a proportion of cost – that’s value.
It might sound simple, but you need to know where to start. If you want to buy fruit, how do you decide between apples, and oranges? With a clear definition of the need, of course. Understanding the problem is where it all begins. If you clearly define what you need to buy, value stands out.