The UK government has imposed an immediate freeze on all new IT spending above £1m, and reviews of the biggest IT projects are being set up to see which can be stopped. A new group, the Efficiency and Reform Group, has been set up by the Treasury and Cabinet Office, with the power to enforce spending cuts across Whitehall. The group was formed as part of the drive to cut £6.2bn from government spending. It will also start renegotiating contracts with major suppliers across government. Minister for the Cabinet Office Francis Maude said, “We have got to get an immediate grip on Whitehall waste if we are going to tackle this unprecedented £156bn deficit quickly. By joining forces and concentrating our efforts where the money actually gets spent, we can make sure the maximum amount gets taken out of government overheads.” And about time too! The UK Government has wasted hundreds of millions of pounds of tax payers money on useless IT projects over the last 10 years. And the good news for private sector buyers is the fact that when vendors can’t dip into the governments trough, then they will become even more desperate to win any private sector deals; so that should mean more negotiation leverage for IT buyers. So our recommendation at Silver Bullet Associates is for IT Buyers to ‘make hay while the (Government) sun doesn’t shine’.

Negotiating with a single source IT supplier can be very challenging. There have been several threads on this subject recently on LinkedIn and many suggestions put forward as to what buyers can do to mitigate the issues and still come out with a good deal. Combining some generic suggestions together with our own thoughts, we have listed below some tips  and tactics that may help you when faced with this situation:

• Timing of the deal. Find out when your supplier’s financial year end and quarter ends are. Even single source suppliers have sales targets and deadlines, and this can be leveraged in your favour. 
• Identify what goals your supplier’s salesman may have. It might be a certain level of spend, or a deal cut in a certain way that maximises their commission. Find this out and you may get some leverage over how much you spend and how.
• Maintain a competitive spirit even though there may be no other option but to buy from the single source supplier. You always have the ‘do nothing’ option up your sleeve. But there may also be different ways of satisfying your business requirement without having to buy anything from the supplier that can be used to leverage a better deal. 

Some people call negotiating with a single source supplier a ‘buyers nightmare’. It need not be if you follow the above ideas and think outside the box.