The Latin term “caveat emptor” translates to “let the buyer beware” both as a linguistic translation as well as a legal concept. The idea behind this statement is that buyers make purchases at their own risk. Whether you are spending your own money to purchase an automobile or your company’s money to purchase software or services, the burden still lies mainly on you to do some due diligence, i.e., homework, to determine whether the purchase is what you need and meets your performance expectations.

Why am I Telling You This?
You all know this, so what’s my purpose in repeating it, you may ask? The reason is this. Over the years, I’ve noticed that a number of companies have not done their due diligence and have had problems with the product or services they purchased.  Obviously, we still need to be reminded of this issue.

While I can’t give you an exact percentage, I claim that the number of situations where purchases have been made with little or no homework behind the decision is probably higher than any of us would like to admit. Also, I do understand that this task is just one of the many tasks that must be accomplished to get the project rolling. In risk management, some tasks are considered low-risk, and others, high. So, researching purchase decisions may well be viewed as low-risk, compared with other tasks at hand. However, that perception can lead to some costly problems, so maybe it’s not that low-risk after all.

Aren’t We All Sincere?
Every product and services vendor who stands in front of you, dressed up and smiling, will tell you why you should buy from him or her. Every one of us probably is sincere about that:  we are better than our competition, and you should buy from us. However, just because each of us believes that our product or service is the greatest doesn’t mean that it really is the best for your project and your situation.

Is Everyone Lying to You?
No, no one is lying just because they’re selling something. That is far from what I’m trying to suggest in this article. In fact, not long ago, I wrote another article about the problem with communications and the fact that there are many times when there’s a misunderstanding. Just because someone misspeaks does not mean they are lying; they just may be wrong about what they know. Additionally, a reputable firm usually tries to work out misunderstandings with you. Disreputable firms won’t.

What Can You Do?
Here are a few things you can do to protect your project money.

1. Check references. It’s true that we usually give you our best references. Even when we give you “bad” references, they’re meant to show that we handled a bad situation well. However, sometimes a few clever questions bring out unexpected information from the references.
   
   
2. Get references. There is almost no reason a company can’t give you references. Even a new product can have beta customers as references. A new services firm will have customers the staff previously worked for.
   
   
3. Listen carefully and verify statements. When we tell you anything about our product or services, take note of things that could be important to you and devote your questions to our references on finding out whether we told the truth and whether we’ve understood what you were trying to ask us.
   
   
4. Don’t let us bully you. The absolute, number one reason I hear from customers with sad stories about projects gone bad is that their product or services vendor refused to cooperate with aspects of the selection process, such as providing references or allowing their people to be interviewed. Ask around. See if others agree with your “take” on the situation. The vendor who refused to cooperate may have some hidden reason for doing so If that’s the case, you don’t want to let it go. It could be the key to uncovering problems before they begin.
   
   
5. Pay wisely. Do not hand anyone the entire cost of the product or services up-front. Fixed-bid projects should be paid based on meeting specific milestones that you closely monitor. Time-and-materials work should be periodically checked, as well, to verify that the ongoing payments are deserved. Dishonest vendors do not feel any twinges in their consciences about accepting (i.e., stealing) your money without providing what they said they would.

Finally
As I’ve said many times in articles, presentations, and conversation, “It’s your project money and no one cares about wasting it if you don’t.” Ignoring or glossing over the initial investigation of products or services is a risk that too many project leaders take. At this point in my career, I hear too many stories about products that can never be implemented and services that are poorly delivered. There’s still too much money being wasted as a result, and it’s money that’s being thrown away.