IT Business
Tough talk for hard times
How to negotiate harder with vendors
By Thomas Hoffman | Published 09:45, 20 January 09
A few years ago, while sleuthing out underused, undermaintained or misaligned software assets at Sony Pictures Home Entertainment, David Cortese found that he was paying for 266 ERP licences at a cost of $7,000 (£5,012) per seat when in fact he was using just 177.
By reworking those agreements and some others, he cut several million dollars in IT overhead. "Everything is negotiable," says Cortese, the company's vice president of IT.
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As the economy slides, that's becoming the mantra for more and more IT leaders, says Joe Auer, president of International Computer Negotiations, a Florida-based consultancy. "When [economic] times are great, it's tough to get people to do better deals ," says Auer, who has 34 years of technology contract negotiation experience. "But when times are tough, they want to."
Do they ever. Forrester Research analyst Ray Wang says that over the past few months, more than 200 clients have contacted him and other Forrester analysts looking for help in renegotiating existing licensing and maintenance pacts. "They're looking for Plan B's" to cut costs, says Wang.
Now is the time to design your own Plan B. Here are nine ideas to help you negotiate harder with vendors, cut waste, sharpen licences and get more out of your IT assets this year:
1. Do Your Homework.
To be adequately armed for effective contract negotiations or renegotiations, it's imperative that you know your existing contracts inside and out, says Roy Schleiden, senior manager of IT procurement at YRC Worldwide , a transportation services company in Overland Park, Kan. "It's amazing to me how many people don't read their contracts and don't know what's in them," he says.
