A quick thought before the Easter break.
Without wishing to stray into confidential commercial territory, we have noticed an increasingly competitive pressure on the pricing of e-commerce (front and back-office – Mortgage and L&P) solutions. This has been noticeable over the last 12 months and would seem to be influenced by the fact that there are more suppliers competing for the same business, added to which there is a lower comparative price point for what are typically ‘mortgage’ related solutions. The latter pricing appears to be pulling down the price of L&P solutions as they each seem to be moving horizontally into the other’s market space. This is in spite of the scope and functionality of L&P solutions usually being greater.
The question is whether or not it is a good or bad thing… Well, I suppose it depends on who you ask. On the face of it suppliers would say it’s bad, whereas customers may say it’s good. However, I wonder if this is pricing pressure is potentially damaging for both parties! With tighter margins or even potential loss making deals, some of the suppliers may not have the motivation or reserves to survive. A weakened supplier may be less able, or unwilling to ‘go the extra mile’ for customers, or even have to withdraw from the market leaving some customers exposed – short term gain for long term pain. Procurement and negotiation is more than about getting the lowest price and both parties should be working for a ‘win win’ scenario.
