Some quick tips to help you negotiate better deals with your IT suppliers

Purchasing IT and associated service agreements can be daunting for any business. Mark Bartrick, Managing Director at Silver Bullet Associates advises businesses to be careful. At a recent IT Forum dinner, Mark was asked to outline some quick tips on how to successfully negotiate IT contracts.

If a business lacks IT negotiation experience, turn to a consultant. 
Consultants like Silver Bullet Associates can save businesses a lot of time and money because they have ‘been there, done that’ before.  

Remember that all contracts are negotiable.
While a vendor might say a client is getting its standard contract, it is only standard because the vendor says so. If you don’t like it, negotiate a better one.

When it comes to pricing, the devil is in the details.
Itemise bundled pricing. Demand clarity of discounting. Spread payments out. Just like working with a home contractor, paying for everything at once can reduce leverage with a vendor if there’s a problem later. Also be sure contract cancellation policies are clear.

Be creative and persistent in efforts to lower prices.
If the sales rep can’t or won’t lower prices, ask who has the authority to do it and go to him or her.

Don’t accept the first price they offer.
You’ve got to push as hard as you can without destroying the long-term relationship.

Consider signing a multi-year contract in certain cases.
For emerging technologies, it may be better to go year-by-year, but for some software, a multi-year contract makes sense to get better pricing.

Get information from peers.
Talk to other businesses; compare notes on products and vendors.

Spell everything out.
Although it’s more work, put “deliverables”—specifics of what a product will do at what time—in the contract. It can even include consequences if the products don’t perform as expected. A service-level agreement might say, for example, that for every hour a server is down, the vendor credits the client money.  

Tags: , , ,

Leave a Comment