As our organizations come to grips with the financial fallout of Covid-19, many of us are being asked to cut our IT budgets by 10% or more. Before starting layoffs, look to your largest vendor contracts and consider renegotiating. As you work with your supply chain and legal team to prepare for the renegotiation, think win-win. You want these organizations to be more than vendors; you want them to be partners. Ensure that as a negotiation team you understand what outcome you want to achieve for the organization before you engage the vendor. If you as an internal team do not understand what “done” looks like for the contract, how will you know when you have a good contract? #ClarityDeliversResults
Discuss internally first which of the things below you can bring to the negotiating table and what they are worth to your organization. You might be able to drive down the total price, get consulting services added in, get certification training for your team, and more. Do not give these things away. These are all valuable to your partner and to you. Again, think win-win.
1 - Your brand
Think back to when you were selecting this vendor in the beginning. It meant something to see, or not to see, organizations within your industry and of your size on a “customer logo” slide. Have you given the vendor permission to use your company’s name and/or logo when they respond to quotes, bids and make sales calls? No matter your size, your brand is valuable. Others in your industry will see it and think “well if they trust this vendor, this vendor might be worth looking at”.
2 - Be a reference
When selecting a new vendor, software solution, reseller, etc, everyone wants references. You do, right? Are you willing to take your time and effort to spend 30 minutes every month or so to be a reference for this vendor? Are you willing to provide your headshot and a statement they can add to their website? Again, these are valuable things. This goes along with your brand. If you are willing to go farther and be a reference, this can be placed in the contract and allow the vendor to provide a deeper discount or more services.
3 - Whitepaper
We all see whitepapers where organizations state how critical the vendor or their solution was to the organization’s success in a situation. These are usually very real situations and we find them very helpful in the industry. These take serious time. If you agree to this, you have now given over your brand, your name and your time to write, edit and publish the paper. This investment should be considered during contract renegotiation.
4 - Presentations
Many professional groups are offering wonderful virtual events right now. The entire HIMSS20 conference is virtual. Many of these presentations are developed and presented by individuals like you and me. They are in collaboration with or sponsored by a vendor. These are powerful ways for practitioners to understand a certain topic and how a specific solution might be used to solve a problem or make a change. These can be subtle endorsements of a vendor when done well, and very powerful.
5 - Customer advisory board
These boards meet anywhere from monthly to once a year. They can be quite time consuming to less than 8 hours a year. Some are quite effective and others have little impact on the vendor. IF you have the ability to make an impact on the vendor by serving on a customer advisory board by influencing the service offerings and helping drive adoption, you might discuss this internally before making this offer during the contract renegotiation process. Again, these boards have a large variation in impact but can be quite valuable to some vendors.
As you approach each of your large-dollar, business impacting vendor relationships, learn what motivates the vendor. Make sure you have a clear, shared mental model of what “done” looks like for the updated contract. Then go for it. The worst thing that can happen is the vendor comes back with a contract you all do not accept and you keep the one you have. This has not been my experience though. In general, most true partners respect a win-win attitude and bring forward contracts which are improved for both parties. Best wishes with your next negotiation effort!
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