Experienced Negotiators Share Four Tips for Getting the Most out of their Vendors

1 Do your homework. If you can’t define the results you want and how you plan to measure them, your vendor won’t be able to either. Involve the business in helping you to determine the performance levels you’ll require from the contract. When you do set down your expectations, vendors will hold you to them. “They expressly list your assumptions in the contract,” notes Wayne Bennett, a partner with law firm Bingham McCutchen. “The price is based on what you told me.”

2 Know your adversary. Anyone who’s ever haggled for a car knows the key to a good deal is understanding the dealer’s cost. Same goes for buying IT. If you know what it costs your vendor to provide a product or service, you’ll know whether you’re paying a fair price. Keep in mind: All contract negotiations are not the same, and a fair deal for packaged software isn’t the same as one to integrate your customer databases.

3 Play the first card.”The first draft of an SLA should come from me,” says Phil Bertolini, director of information technology with Oakland County, Mich. That sets the tone for the negotiation and defines the playing field. Vendors always push back. Usually, they want to haggle over prices, Bertolini says, rather than whether they’ll deliver what you ask for.

4 Talk, and talk some more. No matter how well you and your vendor understand each other, there will always be disputes about whether a vendor has delivered the goods. You can head the contractor off with regular meetings to assess performance and reaffirm expectations. “You and I can sit and agree we’re headed toward that red barn, but if you’re color blind, you don’t see red the same way I do,” says Sandra Hofmann, CIO with Mapics. So she incorporates a process for resolving problems into SLAs.

-E.V.