If you are a business owner whose fiscal year ends on December 31, then you have probably set your budget for the new year and are probably reviewing final numbers from the previous year. Profitability is typically the main number we focus on, and of course, the two correlating numbers – income and expense. Some key questions typically arise when looking at the new year: How we will increase revenue? How can we keep expenses in check? Reasonable enough.
Expenses vary in nature. Some are typically just that – expenses, costs of doing business; e.g., rent, office supplies, etc. Other “expenses” can also be viewed as “investments:” employees, training, product, manufacturing devices, etc. But what about other expenses, such as outsourced services?
There is often an attempt to commoditize outsourced services, because it’s an easy way to compare between vendors. And if we can commoditize, then all we have to do is pick the cheaper option, and voila! – we have either saved money or at least kept expenses in check.
But the truth is that most outsourced services are provided with nuance value. For example, I could outsource recruiting, where one provider charges 20% vs another who charges 25%, but the truth is that if the provider who charges 25% providers a truly more valuable service, I should indeed go with them. Other outsourced services may be even harder to commoditize, namely IT services.
Attempted Commoditization is Your First Mistake
Treating IT as a commodity undermines its potential to create a meaningful impact on your organization. A true IT partner doesn’t just deliver a service; they deliver results that drive stability, adaptability, and progress. The next time you evaluate your IT provider—or any technology investment—don’t just ask, “What will it cost me?” Instead, ask, “What impact will this have on my business?” The right answer can save far more than money—it can secure your future.
When businesses evaluate IT services, it’s tempting to prioritize cost over value. On the surface, treating IT as a simple commodity—a service you buy at the lowest price—might seem like a smart business decision. But this mindset is the first failure. IT is not a one-size-fits-all commodity, and attempting to treat it as such often sacrifices the outcomes that drive business success, operational reliability, and employee satisfaction.
Real-World Examples: The Risks of Choosing the Cheaper Option
Recently, a nonprofit organization that we previously partnered with switched to a lower-cost IT provider. Not long after, their backup device began to fail, creating the potential for an outage that could have disrupted their entire operation. Had that outage occurred, the costs to fix it—and the operational downtime—would have far outweighed the slightly higher price of a better-quality solution from the start.
Another example involves a manufacturing company that came to us seeking a cheaper alternative to their current IT provider. They were frustrated with their existing solution and believed that spending less would solve their dissatisfaction. However, the reality is that choosing a lower-cost provider often leads to further disappointment. We focus on delivering tailored solutions that address business challenges and support long-term success, which comes at a cost that reflects our value. Businesses that prioritize cost over value often remain stuck in a cycle of frustration, unable to achieve the outcomes they need.
I recently spoke with a prospect who put it plainly:
“The ability to resolve IT problems directly affects whether our sales and office team can do their jobs on a daily basis. Without it, we cannot meet revenue goals and retain staff.”
They weren’t just looking for an IT provider; they needed a partner who could guide them with the right recommendations to support their growth and create efficiencies. When IT isn’t positioned as a strategic enabler, businesses struggle—not just with technical issues, but with achieving their broader business goals.
But Why is IT More Than a Commodity?
Attempting to commoditize IT services overlooks the complexity of what it takes to provide proper systems and support. IT is not just about fixing issues when they arise—it’s about delivering solutions that align with your unique needs and positioning your organization for stability and success.
This ties into a larger discussion about spending vs. investing in IT. Many businesses approach IT as an expense rather than an investment, which can lead to shortsighted decisions that focus purely on cost savings rather than long-term business enablement. In a previous article, I discussed how treating IT as an investment allows businesses to unlock better performance, security, and scalability—key factors that drive sustained success. If you’d like to explore this concept further, you can read more in my article, Spending vs. Investing: Lessons from the Frontlines of IT Decision-Making.
A great IT provider should:
- Proactively prevent problems before they disrupt operations.
- Align IT strategies with your business goals to support innovation and scalability.
- Deliver insights and recommendations to improve processes and minimize risks.
Many decision-makers fail to distinguish between the value propositions of IT providers, assuming that all solutions are the same. However, IT requires thoughtful planning, proactive management, and seamless execution to deliver true results.
Key Questions to Evaluate Your IT Provider
When assessing your IT provider, ask:
- Are they proactively solving issues, or do they only react when problems arise?
- Do they provide transparent reporting and visibility into your IT environment?
- Are they recommending solutions that prevent downtime and security risks?
Beyond the Commodity Mindset
This mindset shift applies not only to IT services but also to the technology platforms your business relies on. Cheaper products often lack the reliability and scalability needed to support long-term goals. Over time, this approach leads to inefficiencies, lost opportunities, and higher costs.
The Bottom Line
IT should be viewed as an investment that directly impacts your business’s success, efficiency, and scalability. As you set your goals and strategies for the coming year, take a closer look at whether your IT provider is truly adding value to your business—or if it’s time to reconsider your approach.
Instead of asking, “What does it cost?” ask, “What value does it bring?” This mindset shift from commoditization to understanding the true value of this service can make all the difference in securing your business’s future growth and stability.
Need more help assessing your current IT provider? Check out this article that makes it easy: Are You Getting the Most Out of Your IT Services? 5 Questions to Ask Your IT Provider
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