The Trouble with Value

A recent Computerworld article covered a study done by the Harvard Medical School about the value of computerization in US hospitals.  The article led with the headline: “Computers don’t save hospitals money”.  This is not good news if you’re a seller of Information Technology solutions.

First tip: Be prepared1. You can expect to hear about this, certainly if you are selling in the health industry, but generally if you are selling the value of Information Technology to people who either have trouble believing in the value of IT, or for whom it is disadvantageous to admit it (for example, buyers in procurement roles).  The article will be used in attempts to undermine your value arguments, and thereby reduce your prices. Read more

Subcontractor Negotiations Foil Penske Bid to Save Saturn

By now most of you have heard that the Penske Automotive deal to save Saturn fell apart.  (See page 1 of the Wall Street Journal, for example)  The reason given is that Penske failed to secure a commitment from a third party to manufacture cars for sale under the Saturn name.  GM has guaranteed to do so for 2 years, but the issue was what happens after that.

Penske was negotiating with Renault to be that supplier two years from now.  But Renault balked at the plan.  In our opinion, this was a good business decision by Penske.  Too often the requirement of a subcontract relationship to make a deal happen is left for later, especially if it seems that there is time to secure the subcontract.  But the risk does not go down just because there is more time.  In fact, as in this case, the risk can increase as potential car buyers hesitate because of the uncertainty.

What do you think?  (mk)