The Eagle Blog

Value versus Cost!

Our industry is in a strange time! We bring tremendous value to our clients … when we are allowed to do our job, but there are other “forces” at work!

1. We can ensure that the best person, at the best price, is available to complete a job when needed … not before, and not longer than needed. Just in time staffing!
2. Our solutions are incredibly flexible … you need more, you have them! You need less, they are gone! You need a different mix … no problem!
3. You need a rare skill set, we have the whole world to find them in!
4. Our clients don’t need to manage careers of our people, don’t need to handle politics, don’t need to worry about whether the job is going to get done, don’t need to motivate them … the contractor is there to do a job, end of story.
5. If there is a problem, the problem gets handled.
6. We can work with clients to establish pricing guidelines for contractors to ensure the price paid is fair … every time!

So when we are successful with a client there is suddenly scrutiny because the revenues associated with the “contractor spend” look big. Of course our margins are a small piece of that … but that is one area where the focus comes.

Clients bring in supply chain “experts” who come up with statistics, data and charts that show there are tremendous savings to be achieved (of course we never get to see those reports). Surely if the spend is big there must be big savings! Well … if the rates are fair market rates and we are talking probably about some of the most productive people in the corporation I think some experts are talking through their hats!

The result … rates tables that are too low to attract the best talent. So low that existing key people move on; project managers (often employees) can’t meet deadlines and quit in frustration; suppliers “work the system” to try and keep the account profitable … or spend their efforts on other clients that are willing to pay.

What is the right answer?

1. Recognise the value of your suppliers.
2. Work with them to implement programs that will maximize savings, but not compromise quality.
3. Get rid of the high-priced consultants who do not understand the Canadian IT contractor market!

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