My current Dell has served me well for over the past 3 years. Some of the keys have the letters worn off and it’s starting to be a little beaten in launching applications. Anti-virus, Anti-spyware, firewalls and elaborate screen desktop systems are taking their toll on my processors’ capacity.

I’m looking at HP, Lenovo and Toshiba models. I think it’s the Toshiba M7 series with the 14.1″ screen. The others only have 12.1″ screens.

“Why a Tablet?”, a friend asked me. I’m an early adopter and I believe there are efficiencies in a using and becoming used to using a Tablet PC…..

I’m just spec’ing and pricing, but we’ll see…

This is in response to, or to add to, Annette Clancy’s post “Costing and Pricing” about an exercise with artists.

But first, I enjoyed Jeff Nolan’s presentation on “Emerging Trends in Pricing & ROI” at the IT@Cork conference recently.

What is the relationship between how we price our product or service and what it costs us to deliver?

To point out the obvious: Price – Cost = Profit

So which is most appropriate for calculating the cost of your product or service?

1) Price = Cost + Margin (where Margin is % profit you decide to earn on each sale)
2) Price = The perceived value to the buyer adjusted according to competitive forces
3) Price = X% of Return on Investment – where X% might represent one year’s savings as a result of your offering

Lost Opportunity Cost is typically the lost revenue while doing one thing as opposed to earning cash someplace else. The cash that would have been earned someplace else is the Lost Opportunity Cost.

I’m not saying that we should respond to every opportunity. I believe in quite the opposite. Pick your focus and move fast.

It’s becoming clearer and clearer to me that Pace is imperative and not acting with a sense of urgency causes you to lose out. Particularly as a small company on a growth path, you need to act fast when you see a relevant opportunity.

The core of the problem is this:

When we estimate the time to complete a task, we rarely try to do it faster, thus losing that time forever.

Completing the task faster is reducing your lost opportunity costs.

This is why I’m becoming a big fan of Eli Goldratt’s “The Theory of Constraints”. Part of which is about estimating individual tasks to be completed under ideal conditions with 50% certainty and manage the uncertainty at a more all encompassing level.