IT Insider

We’re in an environment that’s changing by the minute, and you always have to be in the know. So before you negotiate a contract, do your research and understand clearly what you are trying to get. Then use that knowledge to negotiate.

Everyone is always great friends when signing the contract, and once the contract’s signed, in my experience, is when the tension starts. So think about that before you sign.

I’m a big believer in service-level agreements (SLAs). I want to make sure there are tangible measures so the vendor understands our expectations from a delivery perspective and there’s a tangible penalty attached if they don’t meet those expectations.

We also include in the contract that the vendor must carry insurance to cover us if our business is disrupted due to a project delay. However, a project could also be delayed where it’s the customer’s fault. So you have to define it in the contract in a way that’s pure enough so everyone can agree when the vendor is at fault.

For smaller companies with less bargaining power, look for ways you can consolidate spending. It might make sense to join a group purchasing organization (GPO). But don’t make cost the only factor. Regardless of your size, you want technology that has enough of a shelf life to be a long-term investment; otherwise, you’ll wind up paying more in the long run.

All this requires understanding both your own long-term organizational plan and your vendor’s, and looking at whether there is alignment between the two. You need clarity of thought and a clear goal. Many IT executives go into a project without having a specific end in sight. They get the resources first and then plan to figure it out as they go, and that’s what gets people in trouble.


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