Look to the long term. If the selected vendor is here for the long term, ensure that you’ve crafted a win-win opportunity. If you don’t you’ll just pay later for any of your aggressive short-term gains. It’s not just about selling the best software or hardware, or a vendor getting the best margin. It’s about two organizations getting into a collaborative and mutually beneficial business relationship. If both partners cannot get value from the investment (no matter the scale), then it is the wrong investment or partner. For example, if I am buying an upgrade of software from a vendor, I may ask the vendor to participate in my payback. Instead of paying the reseller upfront, I use the metrics from my ROI which I share with them; they get paid when certain targets are met.
Offer to help. If you don’t buy from the vendor, help them build relationships with the people you know that may face the issues their products address. This also builds the relationship without a transaction involved.
Don’t pay for features you won’t use. Offer to pay for them later, if and when you grow into them.
Start by defining what the “best deal” means. There are business objectives associated with every technology-related acquisition. There are lots of techniques for driving toward lowest cost, but you need other approaches when the requirements involve tight time frames, continued support or total value. In most cases, metrics with contractual remedies should be included to be sure the goals are clear and measurable and that the deal was, in fact, the right one.
Tie guarantees to money. Guarantees aren’t worth anything unless there are monetary penalties. They must be spelled out in the contract.
Focus on value, not price. Before a negotiation, determine what is of value to your firm — for example, it could be the successful implementation of the system, with users gaining 20 per cent improvement in time reductions. Use this value analysis to drive the discussions with the vendor — can they deliver this value and then align their price to this?
Demand proof of concept. If you are seeking value, then you need to see it firsthand. So make the vendor prove it can be done, hopefully by implementing something at your location with your people and data. Often this works with appliance-type systems or infrastructure. If the situation is for something more complex, then you must meet with users of the firm’s products and really do due diligence to see if they are getting the values you seek.
Roger Glasel is the vice president of Media and Technology Innovation at Troy Media in Calgary.
