“Price is what you pay; value is what you get” is sound advice from Warren Buffet. This mindset should also be applied when evaluating lease and loan management solutions. Like most purchases, you might be inclined to focus on the cost of the product, but if you focus on the value, you are likely to get a better return on your investment. Ask yourself, “How will this product support my business, strategic goals, and give my customers more value in the products and services I provide them?”
One phrase people sometimes take for granted is “cost effective.” They look at the expression and automatically think that it means a product costs less than another; however, you really should be asking yourself “Is the product useful enough to justify the cost?” This approach should apply to any purchase, but for some reason, we are inherently driven to look for the lowest price, which rarely correlates to the best value or the lowest risk.
Greater Reward Equals Less Risk
As Warren Buffet has said, “The greater the potential for reward in the value portfolio, the less risk there is.” When looking at a product, you might be so focused on the risk that you lose sight of the potential reward. Corporations often view changes to their systems as risky, when in fact, it has the potential to be the opposite.
Many companies become complacent, using the same antiquated systems. They rely on obsolete systems because they want to avoid having to make the necessary updates. Historically, this fear of change has inhibited companies from being competitive in an evolving marketplace.
Buy the Business
In Warren Buffet’s essay to Columbia Business School, he describes The Super Investors of Graham-and-Doddsville as being great coin flippers that were like- minded individuals who focused on buying the business, not buying the stock. As an investor you have to look further than the product, you have to consider the company and the service they provide as well. Almost anyone can sell a product, at some point lease and loan management systems become a commodity and the right investment becomes buying from a business that provides its clients with a service that is meant to contribute to their success over time.
The Bigger Picture
When evaluating lease and loan management solutions, the price should only be part of the consideration. A business needs to also think about the short and long-term value the system will bring. For example: Which system will best support your strategic goals? Does the solution make it easy to get at your data? Is the infrastructure reliable and secure? And is the vendor looking just to sell you a system or are they seeking to provide you with a solution and become a technology partner? Warren may not have been thinking of equipment lease and loan management systems when he said, “Price is what you pay; value is what you get”, but there isn’t a better time to apply that principle then when you are evaluating lease and loan management solutions.