The Cost of Saving

You love to save. Every sponsor does — it’s part of the job, and it looks good in the minutes. But most sponsors can’t actually tell you what a saving cost them. They know the number they kept. They don’t know the number they gave up.

Here’s the arithmetic nobody runs. You spend two hours finding a cheaper option and save $200. If your time is worth $200 an hour, you didn’t save $200. You lost $200. The saving was never free — it was funded by the thing you didn’t do with those two hours instead.

Now scale that up to where it actually matters. You engage the cheaper resource on the program, and they do more damage than the rate card ever saved you. That’s not a saving. That’s material damage plus the time it takes to undo it — and you’re paying for both. You select the free or cheaper software because the licence line looks better in the business case, and you lose it in staff time and opportunity cost instead. Same story, bigger number, harder to trace back to the decision that caused it.

This is the trap procurement culture sets for sponsors. Lowest compliant cost is easy to defend in a report. It photographs well. Nobody gets asked hard questions in the steering committee for choosing the cheapest option — until eighteen months in, when the program is bleeding time nobody budgeted for, and the reason traces back to a decision that was never actually about value.

As the sponsor, that’s your line to hold. It is tempting to find the cheaper option in front of you. What’s not visible is what it costs you further down the program — and by the time it’s visible, it’s already spent.

Investment, including technology investment, was never about finding the cheapest option. It’s about return. That’s the only question worth asking before you sign: not “what’s the lowest price,” but “what does this actually return.” If you can’t answer that, you’re not investing. You’re just spending less and calling it discipline.