I have witnessed many organizations buying and renewing their licensing agreements from international vendors, without using it. This always led me to question why they would continue to do so, what are they winning, and why they are wasting their organizations money?
Why do wait so anxiously for Black Friday? Or major discount deals? Often times, we end up spending more money than we originally planned, but we justify it with the excuse of a good bargain. But is what we’re buying worth that?
A friend of mine works in a well-known corporation, responsible for the organization of their transformation. He is a key decision maker who authorizes contracts with large suppliers to aid them in their transformation journey.
The couple of times I had met him, he would always boast about how him and his team were able to get discounts from their suppliers.
During one of these meetings, he seemed lost in thought. Out of the blue, he asked me, “Who makes the purchases at home?”
I wondered what had prompted him to ask this question, but still, I answered, “My wife and I. Why?”
[He told me] My wife and I are juggling demanding schedules. Due to the limited time we have, and our clashing schedules, we have assigned this task to the house manager. My concern is that she purchases many items that she thinks we need, when in reality, we have no use of them. Although she stays within the budget we have set, the items are unnecessary and often, frivolous.
For example, I don’t drink coffee, but I have a two thousand dollar coffee machine at home. Although she thinks she is doing the best for me, by providing me with the best coffee at home, I believe the two thousand dollars could have been put to better use. What bothers me most about this situation is not the overpriced coffee machine, but rather her answer when I asked her about it. She told me she had saved me one thousand dollars. I asked her, ‘how?’ She carefully explained to me that the original price of this coffee machine was three thousand dollars, but she managed to bargain with the salesman and convince him to sell it to her for a mere two thousand dollars.
Since he was clearly upset about this unnecessary spending, I consoled him by telling him, “ You’re rich. You will earn enough to cover this unneeded expense”.
My comment drew him out of his deep thought, and he explained, “I am not concerned about the money. What disturbs me is that I think I wasted our organizations money. I have always focused on getting the highest discount possible in order to save money. I thought the better the discount, the better the deal for the organization. I didn’t look at the bigger picture. I need to evaluate what I am paying for VS. What I am receiving for that price and how necessary it is. After a thorough discussion and analysis, I realized that even with the concessions I was given, what we are purchasing it not being properly utilized. The items we have purchased are not adequate to complete the tasks we gave in the organization.
It seems that I do not have a clear understanding of value in regards to money. We cannot reverse time, but I hope I can use this lesson going forward, and avoid wasting our organizations money. The best way to accomplish this would be through understanding the value and quality we are getting for the price we are paying; in short, “get our moneys worth”.