The next time you get a proposal from a sales rep that quotes your spend as an “investment”, kick ’em in the butt and throw them out of your office. If they can’t pay you the courtesy of telling you the truth by calling it a “spend” or an “expense” or something that smells a lot less like bullshit, then you don’t want to do business with them.
The dictionary definition of an investment is something that “is worth buying because it may be profitable or useful in the future”.
Now I don’t know about you, but I don’t buy hardware or software on the basis that it may be profitable or useful in the future.
I buy it because it’s useful immediately and delivers an immediate cost reduction or process improvement. I don’t want to be waiting around for a possible profit or entering a useful state of being some time off into the far future, well after the commission check has been spent and the vendor has been acquired by someone else who has “terminated with extreme prejudice” the product you bought because it was cannibalising the sales of their flagship product.
This sounds like a good time to send a big hello shout out to all our friends at Oracle.
Right about now any sales reps reading this blog are either having a collective aneurism or are about to bombard me with vitriolic emails explaining why this simplistic, black and white approach to technology investment is wrong-headed and ignores the true value… blah…blah…blah….
For comparison, the dictionary definition of an expense is: “The cost required for something; the money spent on something.” When you buy technology, is it an investment or is it an expense?
Here’s the challenge: I am about to place an order for 10 widgets (laptops, mobile phones, routers, servers, whatever). Now am I making an investment or am I incurring an expense? Is the widget going to be worth more to me in a year compared to the price I paid for it? I don’t think so.
How often have you been asked to “invest” in a phone system? It could be the greatest phone system on the planet – three years from now you’ll be lucky to realise 10 percent of the price as a trade in. Doesn’t sound like a real good investment to me. In fact, if you were betting your future retirement on “investments” like this, you’re going to be working well after you’re dead.
I mean seriously, if someone came up to you and said, “Give me $100,000 of your hard-earned and, in three years, I guarantee to give you $10,000 back – not in addition to the original ‘investment’ – just $10,000 back.” What would you do? I’m guessing that handing over the $100,000 is not at the top of your list.
So let’s just get down to business. Any sales rep that uses the word “investment” in a sales proposal either thinks they are smarter than you or they’re using mealy words.
Mealy words? They’re words that make something appear to be nicer than it is, more commonly known as spin. Now we all know why people spin things. It’s because they don’t want to tell you the whole truth. They want to tell you a polished, varnished, shiny version of the truth that avoids all the nasty bits that might make you think twice.
The 1% Spend is written by a prominent Australian I.T. consultant who is choosing to remain anonymous (and candid).