IT career advancement: Learn how to negotiate vendor contracts

Negotiating contracts with IT partners is a proficiency that's multiplying in importance for IT leaders.

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Looking to others also helped White with negotiations for a content management solution -- an area in which his knowledge was lacking. To make sure he was getting the right software for the right price, he called upon people much more knowledgeable about this particular software space and had experience with contract negotiations. That helped a lot, but if he had to do it over again, he wouldn't hesitate to hire external consultants to fill in the blanks when internal expertise is lacking.

The same strategies work when things are going too smoothly in negotiations. If there are zero issues, White asks himself -- and others -- "What I am missing?" Most contract negotiations are a give and take, he says. If a vendor rolls over too easily, White now knows there's room to negotiate. And he's learned to look as critically at current vendors as he does at new providers. While negotiating a new service agreement with an existing infrastructure provider, White skipped over the reference checks on the new services and the vendor ultimately failed to meet service expectations. "We quickly realized that we bought a service that our partner could not provide us," White says.

Having Their Backs

Terry Dinterman was named a 2010 CIO Ones to Watch honoree by the CIO Executive Council and CIO magazine, partly on the strength of his work negotiating an outsourcing contract for JetBlue's data center, network management and service desk operations. While the airline was looking for good value and service, Dinterman, vice president of technology services, had a ticking eight-month timeline to address serious vulnerabilities in system availability and pave the way for a new reservations system. He'd led a few RFP processes before, but none with such high stakes.

The key, he says, was support from the board of directors on down. That was invaluable when overeager vendors attempted to go above Dinterman to get the contract. "We were able to manage this by enlisting strong executive commitment to the RFP principles, including a clear set of engagement rules, a balanced scorecard approach and a fully transparent process that was tough but fair," he says. "In the end, those that attempted to bypass the process hurt their chances rather than improving them."

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