Types of IT Service Providers
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I'm not claiming buying is easy, I've been doing it for years and I wouldn't consider myself a decent purchaser but I am a professional buyer, I'm not an idiot. I'm just wondering about the necessity of understanding the technical details of the provider's business model in order to identify potential bias. I'm just wondering how this wouldn't come out in conversation with a company - how it is possible to be duped because of failure to understand terms.
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The terms, often overlap, as you could easily hire an MSP to consult on a new project.
But that same MSP will recommend a solution (software or hardware) that also aligns with their sales departments goal. Because that's the hardware they're licensed to sale. Or simply want to sell because of Markup Value on said item(s).
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@Carnival-Boy said:
I'm just wondering about the necessity of understanding the technical details of the provider's business model in order to identify potential bias.
Let me just give a contrived, sample example:
Company 1 tells you that you need a SAN. You know that they are SAN salesmen and make a fortune selling SANs. By knowing this you know that this advice is literally worthless and must be thrown out. You are left with no advice.
Company 2 makes no money selling SANs but does make lots of money building storage systems. They recommend a SAN against their own financial interests. You have a good idea that they are being not only honest in recommending something that doesn't make them money but doing so against their own interests. Their advice about the SAN is likely from a sincere position of honest belief. You should at least consider this advice.
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@Carnival-Boy said:
I'm just wondering how this wouldn't come out in conversation with a company - how it is possible to be duped because of failure to understand terms.
Just because it comes out doesn't mean that someone has thought through or understands the bias or has empathy. Everyone knows that a reseller sells things, yet many don't take time to be conscious of their bias or have empathy with their position. That you can determine things and don't need terms isn't what matters, it's understanding their position and empathizing is what is important.
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@DustinB3403 said:
The terms, often overlap, as you could easily hire an MSP to consult on a new project.
But that same MSP will recommend a solution (software or hardware) that also aligns with their sales departments goal. Because that's the hardware they're licensed to sale. Or simply want to sell because of Markup Value on said item(s).
It shouldn't matter. If you're paying for advice then that consultant should be unbiased. It wouldn't be moral otherwise. I know it happens.
But if I have an eye-test at an opticians it shouldn't matter if that optician is also a glasses reseller - the test I am paying for should be unbiased. Now if I went in to buy a pair of glasses then I wouldn't expect rhem to advise me to buy from their competitors. They're going to try and sell me a pair of glasses
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@Carnival-Boy said:
It shouldn't matter. If you're paying for advice then that consultant should be unbiased. It wouldn't be moral otherwise. I know it happens.
I'm not even sure "shouldn't" is correct. If you are getting advice from someone that does advice and sells things, you are offering them money for advice AND offering them more to make it biased. Which inventive do you want them to chose?
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@Carnival-Boy said:
But if I have an eye-test at an opticians it shouldn't matter if that optician is also a glasses reseller - the test I am paying for should be unbiased. Now if I went in to buy a pair of glasses then I wouldn't expect rhem to advise me to buy from their competitors. They're going to try and sell me a pair of glasses
It's a very different situation. Other than you trust the optician not to sell you glasses even if you don't need any - but you likely would not have asked him if that were the case, right?
A few factors:
- You know if you need glasses or not.
- The advice is effectively "post sale." He's not advising you on getting glasses, only measuring to make sure the one you got fit. The sale is already made. We can mostly trust a server sales person to ensure we buy enough storage. But not to tell us if we need a server at all
- Glasses are not something you need advice amount, only a technical measurement. There really is no advice.
- Often glass sales are separate businesses run by different people (but not always.)
- Profits from exams far exceed profits from glass sales.
These are big factors that all come together. But the biggest is that there is no advice for the optician to skew to make money, none.
So actually this is a great example of why it is critical to understand bias and incentive. That it wasn't readily apparent that there is both a different set of incentives and a lack of advice vs. measurement in which to take advantage of someone highlights why it is so easy to misunderstand incentive and bias in an ITSP. If an optician's bias is tricky to detect, a company with many moving parts is far more difficult.
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@scottalanmiller said:
It's a very different situation. Other than you trust the optician not to sell you glasses even if you don't need any - but you likely would not have asked him if that were the case, right?
No, I have glasses already, so I need to know if I need to have them replaced or not.
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@scottalanmiller said:
That you can determine things and don't need terms isn't what matters, it's understanding their position and empathizing is what is important.
I think that was basically my point. My key advice would be to trust no-one and recognise there is no such thing as a free lunch. I am surprised by the naivety of some of my colleagues, and how much they trust the advise of salesmen.
That's perhaps because I spent my formative years working Hong Kong, and business was generally a lot more cut throat over there. Business meetings were a lot more direct as well, whereas in Britain we're terribly coy about discussing money which makes it harder to get to the bottom of what someone is trying to sell you. I'm considered a bit rude in meetings over here, whereas in Hong Kong I was considered a bit too coy. I'm guessing the US sits somewhere in the middle, but I don't know.
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In my experience dealing with sales people, most are perfectly comfortable if you directly ask them, what's the cost, or what are you trying to sell.
It's that in-between that has many salespeople nervous to discuss money, if they don't have a gauge for your sales approach.
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@Carnival-Boy said:
I think that was basically my point. My key advice would be to trust no-one and recognise there is no such thing as a free lunch. I am surprised by the naivety of some of my colleagues, and how much they trust the advise of salesmen.
It's good to trust no one, but everyone needs advice as well. Remember these factors apply equally to the business listening to an IT department as it does to outside companies. So unless we understand bias, we can't understand recommendations and do our best to limit bias and to understand its skew.
