What to negotiate or not to negotiate-THAT is the question.
I was coming off quite a high from my first time speaking at ILTACON2017 over the last few months. The session - Develop Your Ability to Negotiate and Work with IT Vendors (#ILTAG138) was very well received considering this is a technical conference. I don’t want to say it was “standing room only” but they were lining the walls! I know, I know, you are all our saying - “come on, Pam, how could that topic have an exciting topic” (I was saying the same thing 10 minutes before I went live…as my teleprompter went on the fritz and I didn’t bring notes –I knew I’d have to ‘wing’ it). Apparently it was a topic that people thirsted for within the ILTA community and I was delighted to bring my passion for negotiating to the conference.
A great deal of people in IT tend to just get thrown into the purchasing function and often times the items requested come at the 11th hour and is undoubtedly critical and must be ordered immediately. As much as I give the IT department credit for careful planning of deployments, maintenance windows, and even budgets- often in the IT world, rush is an everyday word.
Ok, so now we know some of the issues, how can you stay out of the proverbial hot water of purchasing items and contract negotiation. I will be writing a series of articles (tips and tricks) over the next several months that will provide you with some basic tactical purchasing guidelines, if not only to help you learn your way around a contract but provide you with any ‘gotchas’ as you navigate your way through this tricky world of terms and conditions within IT Purchasing.
Whether you realize it or not we negotiate every day of our lives….in our professional relationships, in our family life, in the community, on eBay, EVERYWHERE!
Let’s take this negotiation journey one step at a time. If we extend our everyday negotiation skills into standard purchasing applications – below is a glimpse of what that might look like through the purchasing lens:
1) Is what you are about to buy needed? (often times people submit renewals before even verifying if there is still a business need for the service or software)
2) Are you getting the best price for the product? (can you source it to someone else or is it only available from one place – are you leveraging your current vendor relationships)
3) I don’t receive contracts-I just buy items for IT. (Every document is a contract - look closely, there are some level of terms, dates, prices, support that is in every quote….look at the teeny tiny words at the bottom…they are there.)
4) You are buying a new software (either perpetual licenses or Software as a Service/Subscription) – Are there professional services needed? Are they included?
I can tell that the wheels in your “soon to be purchasing brain” are starting to turn.
Here are some basic tips from my ILTA session:
- Understanding the players (your end user, the vendor, the stakeholder/approver)
- Negotiating, in general, is NOT easy and not for the faint at heart (but it is a fact of life – so stand your ground- after all – you are the one holding the purse strings )
- YOU are the client (above all-remember -“asking” is not a crime- the vendor will tell you that the deal has to be done TODAY…often that is not true-call their bluff…this will allow you time to do your due diligence with IT on the request)
- Build contracts that protect your firm and survive everyone (that getting “hit by a bus” isn’t a joke….look at the buy from the perspective of - once I send this to the vendor-will it be clear as to what my firm is buying)
As I mentioned in my opening paragraph, the feedback from my presentation at ILTACON2017 in Las Vegas was that this topic was welcomed and needed in the ITLA community.
I will leave you on this note…… remember, negotiating is really just a conversation - but knowing WHAT to ask on a deal is crucial. Heed the tips above and take the time to read and question the contracts or Sales Orders put before you. If you don’t….this may become one of those instances in life where the line ‘you know enough to be dangerous’ can get you and your firm in a great deal of trouble… potentially costing more money or worse yet….risk exposure.
Stay tuned for my next article as we continue to explore SLAs (Service Level Agreement) and other acronyms that you should become acquainted with in IT Purchasing.