“Before you compare prices, confirm the proposals are solving the same problem.”
The situation
An organization operating a professional sports venue needed to upgrade its telecommunications environment. Its purchasing rules called for a formal competitive process. VocalPoint Consulting discussed helping prepare the RFP, but the organization decided to run it internally.
The question
Months later it came back with two proposals and a hard question: which one should it choose? Reviewing two bids is not the same as knowing they represent the best options, or even the same project.
What we found
Once we examined the designs, consequential differences appeared. One approach required substantial changes to the existing wiring; the other could reuse it. Product lifecycle considerations also affected how long the investment would stay useful.
The comparison identified a potential savings opportunity of at least $500,000 tied to the infrastructure approach. More importantly, it showed that two suppliers had answered the same request while solving different versions of it.
The lesson
Compare designs and lifecycles before you compare prices.