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I own a small software development business. We tend to lose bids to a much larger (big name) businesses. The pattern goes, big-name gets paid millions of dollars, screws up royally and leaves. Then I get called in via a side channel to clean up the mess, usually a complete rewrite, at a tiny fraction of the original budget.

Yet after we deliver, the other business's failure is never acknowledged, and the cycle repeats itself in another year or two when another large project comes up.

This has happened to me twice so far, and I've seen it happen to others, too.

Could someone please explain this behavior to me, because I don't understand.

closed as off-topic by Philipp, Masked Man, Mister Positive, gnat, JasonJ May 24 '17 at 12:44

  • This question does not appear to be about the workplace within the scope defined in the help center.
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  • 9
    Marketing. Nuff said. – Captain Emacs May 23 '17 at 14:25
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    I don't understand why marketing should trump results. – PJ7 May 23 '17 at 14:26
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    Because appearance and inertia are more powerful on the short-to-mid-term. It is not enough to be good, one has to be seen as good, too. – Captain Emacs May 23 '17 at 14:27
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    @PJ7 You notice the bids you lose and the messes you clean up but it's possible you miss a dozen other times the big name company has delivered. – JonK May 23 '17 at 14:36
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    I'm voting to close this question as off-topic because it's about business advise, not navigating the workplace. Maybe this is a question for startups.stackexchange.com – Philipp May 24 '17 at 8:02
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Could someone please explain this behavior to me, because I don't understand.

There even is a saying for this:

Nobody ever got fired for choosing IBM

What does it mean? Choosing IBM (or SAP or Oracle or $BigEnterpriseySolution) is a non-risk move for a manager. Nobody will criticize you for it. If IBM screws up, that's not the managers fault. Everybody knows that IBM is safe.

Now if that manager hires you, a guy nobody heard of, it actually is his risk. If you screw up, that is the managers fault for picking you (over for example IBM) and will get him fired.

So as a manager that wants to play it safe and is not burning his personal, but rather the companies money... guess what they do?

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    Funny you should mention IBM, because they're one of the businesses I've seen completely fail and leave a huge mess. As in, absolutely nothing working. Nothing. Safe? Non-risk? LOL – PJ7 May 23 '17 at 15:47
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    @PJ7 It's only non-risk to the managers job. The project itself... yeah that's another story. – nvoigt May 23 '17 at 15:49
  • This is also why Microsoft continues to exist. – Retired Codger May 23 '17 at 16:05
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    Accenture is another one. There were calls for criminal prosecution here in Colorado (US) with their failures for the voter registration system, unemployment insurance benefits, auto title registration system, etc., but they still keep getting contracts... – Wesley Long May 23 '17 at 16:18
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Marketing matters. How people perceive your company is more important that what you did because potential customers don't know what you can do if you don't market. Perceptions are what all contract decisions are based on. They go with known entities because it is a risk to go with some company you never heard of. So take the time and spend the money to get known for what you do. Since you don't know much about marketing, hire a consultant. It will likely be some of the best money your company ever spends.

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    It's hard for me to hear anyone talk about risk when they throw away $3 mil and 2 years on a project that anyone in the industry knows should have taken a single developer less than six months to complete. Technical arguments just bounce off decision-makers though - I probably do need to hire someone who speaks their language. – PJ7 May 23 '17 at 15:09
  • @PJ7 if they do receive their product eventually, it's not really thrown away money -- they are getting what they paid for. – enderland May 23 '17 at 15:17
  • @enderland - If I have to be brought in to do a rewrite, that's pretty much the definition of not getting what you paid for. – PJ7 May 23 '17 at 15:20
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    @PJ7 but that's the marketing aspect. I suspect it's not clear to these companies that 100% of the previous work was a waste. – enderland May 23 '17 at 15:21
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    @PJ7 I'd say you need to be more clear to these companies that what you're going to do is pretty much start from scratch and that the money they invested is wasted. Now, they probably think that they're hiring the big company to do the heavy lifting and then a small guy to dot the i's and cross the t's for a small bit extra. – Cronax May 23 '17 at 15:58
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PERCEPTION IS REALITY

From what you describe, your company is perceived by the client to be the "repair shop" as opposed to the manufacturer, so to speak.

Now, this could be EXTREMELY lucrative for you. Car companies have fallen on hard times and even gone out of business, but the local repair shop is always busy.

If you want to remain the local repair man, then encourage this perception.

If you want to break out of it, you need to change the perception to your client.

If you want the latter, go with HLGEM's recommendation for marketing.

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I can virtually guarantee that "Big Engineering Company" (does it start with a W and end with an O?) has cultivated relationships with your customer's senior management. The big boys spend A LOT of money developing those relationships to achieve EXACTLY what you have described.

The big companies do not view quality the way you view it. To them, quality is simply a metric, an expense to be minimized. They are seeking to understand the absolute minimum quality standard that Customer will accept and they will shoot for that standard every time. Their only objective is to win the next job and book the revenue...that's it. Their sales teams are motivated by commissions and quarterly goals. You have a vested interest in the success of each and every project.

You are a small competitor that probably does good work with prices to match. You probably have no relationship, or maybe a very superficial relationship, with senior business unit leaders.

Who do you think will win big jobs, the supplier that invites Customer's senior managers to "Ultra Super Extreme Executive Management Celebration Galas at Fancy Hotels in Distant Cities" or a small SW vendor that does good cleanup work?

You have a marketing and networking problem. I recommend connecting with your customer's procurement division and work through them to meet business unit stakeholders. If they're incompetent procurement people they'll just hand you the names of key decision makers!

Context: I outsource services and negotiate commercial terms for a living. I handled global SW/HW engineering services for a number of years and dealt with MNCs and small local suppliers. It is possible to beat the big boys.

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A simple fact: People value things according to how much they cost them. You worked for cheap, so they don't value you. The next time you fix someone else's mess just charge them more. If they say it's not in their budget, then you just say that's how much it costs.

You will be respected a lot more.

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