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There is a growing trend in business today to commoditize everything. Platforms like Amazon, Alibaba, Apple Store, etc. are turning small and medium businesses into lowest-bidders options rather than value-sellers. Pushing the agenda that their only variance is price. There are a similar trend with IT professional services vendors where there are emerging industries and technologies that are all about commoditizing IT professional services in an all-out effort to reduce costs across the marketplace for large corporate clients. We know that when goods and services are only differentiated by the price, then they are, by definition, a commodity. However, we most certainly know that IT professionals defer in terms of their quality of delivery, experience, expertise, assets, and so on. So, if they're not commodities then why are their services being bought and sold that way?
Globalization is further expanding the IT professional services marketplace and driving down prices even further for all the same reasons. Countries across the globe are actively marketing their IT resources for the same or higher margins but at much lower prices. Given this continued erosion in the value-proposition of IT professional services, small and medium-sized IT consulting firms will become extinct, and our market will be serviced by large, faceless multi-national corporations that place no value in forming meaningful client relations beyond closing the sale based on their willingness and ability to low-ball against their competitors. So, what are you supposed to do? You need to purchase IT professional services, one of your many suppliers is proposing what looks like what you need at a price that is below or even well below what you're paying now. Well of course you will at least consider it.
With companies today using the same technology to produce the same products, the differentiation divide shrinks. When advertising and price are the only means of differentiating products, that is not a winning strategy. It cannot simply be whoever can make the goods for the lowest cost will prevail. As prices continue to go down, profit margins shrink until it's virtually a losing proposition to produce and sell those products. IT professional services are no different. How do we differentiate? We convey the value proposition to our clients. The price is a factor for sure as we're conditioned to that. When something is exorbitantly priced, we automatically perceive that it must be better in some way. The emotional value of that product or service increases in our minds. So now it is simply a matter of deciding if that emotional value we have built up in our minds is enough to overcome the fear and risk of paying too much or buying what you don't need. That's the worst feeling ever, the feeling of distrust, regret, discontentment, and anger that comes with believing that you are or have been taken advantage of or ripped off in some way.
At KOOP, we're all about conveying value-proposition. We know that our prices are very competitive, but without the requisite resources who can do the work and do the work well then, the prices shouldn't even be a factor. The value is, we secure the same or better resources than what you're getting now through your Big 5 or like consulting firm at a fraction of the cost. We refuse to be pigeonholed and commoditized. For KOOP it is all about building great client relationships forged through long-term trust and realized value.