I’ve been thinking a lot lately as to why everything I have to assemble for my daughter comes with extra parts. It used to be that you would buy something that required assembly and by the time it arrived at your house it was DOA because of a missing or broken part. Nowadays it’s pretty difficult to find a doll house or a toy car requiring assembly come broken or missing parts. Why might you ask? Well, because it’s a lot harder to get away with that in today’s consumer marketplace. If the quality of a product or good isn’t up to snuff, then the consumer is going to go elsewhere.
Do we feel as though we are immune to consumers making another choice? I don’t think we intentionally do, but often we neglect to realize that Quality is Free. (Note to self: I didn’t invent the phrase Quality is Free, but rather it’s the name of book by Philip Crosby). Well, maybe it’s not totally free, but it’s a whole lot cheaper.
Let’s take an example…today we received a series of emails from Engineering Services asking us to benchmark a Solaris Cluster of Vista 4.2 because of a reported issue only seen on Solaris. Ordinarily this kind of request wouldn’t been too outrageous. If the request came on Linux, it could have been taken care of in minutes. Because it was on Solaris, which we have limited equipment, it required some juggling of equipment and re-arranging schedules so Anand could work on the problem. Needless to say, as I write this blog Anand is still having trouble getting an environment up and running.
There’s nothing out of the ordinary with this example, unless you ask the question “Why are 10 clients reporting this issue and we never saw it in our own lab?” Well if you understand the equipment on hand (limited Solaris equipment) and the amount of time it would take to do cycles on Solaris, you would know that we have done very little testing on Solaris. Most of our Unix work has been on Linux. The main reason is that our Solaris environments cost 2 to 4 times more then our Linux environments.
So let’s add up the costs. If we had purchased Solaris PVT servers, which we would need a minimum of 5 (~$9,000 each) for a total of $45,000. You factor in that we would need to run PVT cycles for Solaris, which would cost us about $3,000 to have one engineer perform what would be an additional month of work during a release. We will throw in an additional $2,000 in miscellaneous expenses to make our grand total about $50,000 in expenses.
From a cost perspective $50,000 isn’t all that much considering we spent several 100k on hardware as a department. What does the dollar value add up to handle these issues after the fact? Let’s forget about all of the expenses that we would have endured with Support Engineers and Engineering Services had to put up. Let’s also forget that one of our resources had to stop working on his current assignment in favor of this assignment.
If we solely focus on the affect this issue could have in terms of contract value, let’s just hypothesize that this issue becomes the final issue that breaks the camel’s back. We’ve had 10 clients (large and small) report this issue affecting their semester. If we take a low-end average of $10,000 per contract value (we all know that these contracts are probably 2 to 5 times larger…but for fun we will go with the 10k), then we end up losing in year 1 $50,000. If the contract value compounds over four years (which is the life we usually get out of our hardware), we would have lost $350,000 assuming no other clients left and these particular clients did not change their license level or fees. We wouldn’t have spent more then $50,000 on the equipment. According to FASB accounting standards, we could amortize the capital expenditure over the period of 4 years. That means we would have only spent about $12,500 per year. So instead of the lost revenue being $50k in year one, it’s more like $86.5k.
There are some people who are going to read this blog and say to themselves that our problem is we didn’t budget money to handle Solaris PVTs. That’s not the total message I am trying to convey. Rather, I am trying to say that making the effort to address quality long before our product reaches the consumer market is heck of lot cheaper then waiting until the fire engulfs us. So then why do we neglect quality? We do it every day…without even realizing…we forget to put instructions in our packaged materials…we put that cracked piece of wood at the bottom of the box…or we forget to include all of the screws and washers.
Ask yourself every chance you get…”What do we get by sacrificing quality?”