A primary role of a
At different points in my
- Analyze Vendor expenses – understand the flow, i.e. fixed, variable, and seasonal.
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Review the contracts – Are you receiving all services and/or features that you were expecting? It is not uncommon for
technology agreements and/or data agreements to promise everything, but fall short of expectations.
- Review your needs – Contracts represent your needs at a point in time, i.e. when they were executed. It makes sense that an expiring three year contract will include items you no longer need.
- Understand pricing - Is pricing today different from when the agreement was established? What is the pricing from your vendors’ competitors, for new accounts? Consider in your analysis the cost of conversion, i.e. cost to substitute one vendor for another.
- Seek opportunities to bundle - At times a vendor will seek more revenue opportunities by migrating to related services. Are there cost savings for bundling, that you may benefit from?
Avoid the warranty trap with new technology. Every new piece of equipment starts with a two year warranty. When the warranty is close to expiring, you will be offered a warranty extension. Depending on the price of the equipment, extended warranties may not make sense. Consider replacement costs.
Decide based on the data you have collected what the proper fee is, for the service or product in question. Contact your Vendor’s Sales representative and request a concession/discount to obtain your target price. Do not threaten to leave or reference your data. A good sales person already knows what competitors offer. Be prepared to negotiate.
As a policy, review agreements at the time of renewal, at least every three years. Prior to signing any agreement, be sure you discuss service expectations. Require that all automatic renewal language, be removed from your agreements.
What is your experience?