Has Your IT Procurement Created Risk, Focusing Too Heavily on Lowest-Cost TPM Support?

BloggausQuite honestly, in the last ten years we’ve seen more and more instances of IT procurement focused more on price than any demands to provide the critical features of service quality. And, especially in the last 12 months, we’ve been hearing of dozens of cases when clients discovered they bought a used Toyota, when they were expecting to receive the equivalent of a reliable new BMW. Where did they go wrong?

While it is exciting to see a far greater percentage of global companies choose Third-Party Maintenance for hardware support of their post-warranty assets, there has been an increase in a disturbing new trend.

The New Trend is this: IT procurement staff are unfamiliar with the standards originally designed by Third-Party Maintainers to proactively earn the credibility they are now receiving. These very high standards were designed to meet or even exceed the standards offered by the OEM for warrantied hardware. Unfortunately, those new to IT procurement are unfamiliar with what to look for and resort ONLY to “lowest price” strategies, placing little-to-no emphasis on service standards designed to protect mission critical assets.

Measures to ONLY drive down cost have enabled some hardware maintenance providers to be less than transparent about what elements of their service will be sacrificed to accommodate reducing margins. This is incredibly dangerous for those accountable for the hardware and efficient data center operations. Shame on the TPMs that do not push for transparency in such negotiations! But, there also needs to be greater accountability placed upon those in procurement roles whom are currently unfamiliar with the original standards of the TPM marketplace. This accountability needs to address those in procurement who do not know how to correlate REQUIRED service components to critical assets verses PREFERRED service components to non-critical assets. A price-only focus is dangerously myopic! But, we’re seeing it every day!

We offer a three-part video series to address this very subject and to educate your teams on the most important issues to consider when choosing a hardware support provider. It is our hope that you watch these videos, and then proactively share this blog (and all three videos) with your IT procurement leadership. Here they are:

Third-Party Maintenance: A Competitive Pricing War (Part 1 of 3) (2:08 minutes)


Summary Description: If you’re familiar with Third-Party Hardware Maintenance and work in IT procurement, you might be surprised by the unintended outcomes that impact Service Quality when the greatest focus is placed on driving providers to their lowest price. Creating a pricing war may help drive down OpEx, but are you ready to accept what is likely sacrificed? Do you know whether or not these sacrifices will be made transparent to you by the provider?

Third-Party Maintenance: Balancing Cost, Risk & Service (Part 2 of 3) (4:52 minutes)

Summary Description: When choosing a Third-Party Hardware Maintenance provider, you are best served by fully understanding the basic elements of the service and the Service Quality standards that have made the industry a highly credible alternative over the last ten years. Do you know how to balance cost with acceptable risk and expected vs. acceptable Service Quality?

Third-Party Maintenance: Looking Beyond Lowest Price (Part 3 of 3) (6:22 minutes)

Summary Description: IT procurement professionals are traditionally incented by maximized savings. But, do you know what questions to ask to make certain that finalized pricing is not opening your infrastructure team to unacceptable risk? Sometimes “lowest price” initiatives can make sense, but other times such initiatives may be myopic. When you build a home, buy a car or hire for landscaping, you make no assumptions and know exactly what you’re getting before an agreement to buy is finalized.

Feel free to contact me if you have any questions or would like to receive a more in-depth consult about the ideal questions to be asking, so that you’re properly vetting your TPM vendors.

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