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The High Cost of Low-Quality: Why Cheap Solutions Could Be Costly Mistakes

by
John Suder
on
May 8, 2023

How cutting corners can cost you more than you save

As we ride through another uncertain wave in our economy, many tech and eCommerce businesses are laying off thousands of employees. 

Granted, some of these high flyers overhired staff during the pandemic to keep talent away from competitors. 

When things get uncertain, companies begin to skimp on technology. There's an industry-agnostic anti-pattern: when companies want to save money, they cut corners.

When long-term financial stability is at stake, it's common for techno-eCommerce businesses to think of cutting corners as a way to save money. But this "quick fix" often leads them into deeper woes rather than providing the intended cost reduction.

While this may seem like a good idea on paper and on the balance sheet, it generally creates more problems than it's intended to solve. While it may seem like a quick fix, it can often adversely affect the company's growth and profitability. 

Cutting processes, efficiencies, and staff generally have the opposite effect. Here are a few examples of cost-cutting without weighing the consequences:

Skimping on Staffing

Scenario: A client is assigned a Product Manager. The product manager works on breaking down requirements, creating documentation via Confluence pages, and then breaking them down into stories. As contract renewal approaches, to save money, the client decides not to cover the cost of the product manager. The product now has no ‘manager.’

The result is an unclear direction and missing information that the product manager would chase after. Things that would typically take a day drag out into weeks as information is gathered and stories are written without a clear focus.

Leaving Out Critical Phases of the Design Process

A client bypasses normal processes in design and creates prototypes and mockups with no stories, documentation, or testing. This creates chaos for developers and management alike. Again, this scenario creates weeks and sometimes months of extra work, which could have been avoided with proper documentation and testing. This also results in lost revenue, as the client needs to launch initiatives on schedule. 

Delaying Tech Deployments

Sometimes it is necessary to bite the bullet and move or change your services because your needs have grown (or diminished). And sometimes, a client will procrastinate because the move looks too costly on paper, and they’ll keep the ‘status quo until things get better.’ Suddenly, there is a hard deadline, and the client is forced to throw bodies at the project to get it done. They may hire substandard developers to get it done, ultimately costing more. 

Cutting Corners May Lead to Technical Debt

By opting for cheaper technology solutions, you may have a less stable, less secure, and less efficient technology infrastructure. This can lead to technical debt, where you end up paying more in the long run to fix problems caused by cutting corners earlier.…

Why You Should Continually Invest in Your Tech

Investing in technology can improve efficiency and reduce costs. While these investments may seem like a significant expense in the short term, they can lead to substantial cost savings in the long term. For example, automating specific processes can reduce labor costs, and implementing data analytics tools can help optimize pricing and inventory management.

Technology is a crucial driver of customer experience: In eCommerce, customer experience is everything. Investing in technology solutions can increase customer loyalty, repeat business, and revenue.

Conversely, cutting costs on technology can impact the company's ability to scale, innovate, and stay competitive in the market.

Conclusion

Although reducing expenses may seem appealing in the short run, it could have adverse effects on your eCommerce enterprise. Rather than cutting costs, it's best to enhance your technology expenditures by investing in solutions that provide the most significant advantages for your business. This strategy guarantees that you can remain competitive and attain long-term growth and profitability.

Do you need help managing your processes and technology?
Set up a call with SUMO Heavy so we can show you how we maximize value through efficiency and process. 

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Photo by Adam Nir on Unsplash

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