The CIO's guide to smarter vendor negotiation

Negotiating deals with IT vendors is never easy, but it is a skill you can learn. Experts in the art of negotiating say it’s important to understand the vendor’s pain points, look out for hidden costs and keep your emotions in check.

common negotiation errors

The basic tenets of successful vendor negotiation have changed little over the years. Yet the process remains difficult to master and, for CIOs in particular, is getting more complex.

“A lot of the most effective strategies for negotiation are common-sense ideas, but people don’t execute them in the realities of a difficult negotiation,” says Daniel Shapiro, founder and director of the Harvard International Negotiation Program and author of Negotiating the Nonnegotiable: How to Resolve Your Most Emotionally Charged Conflicts. “Simple isn’t always easy to execute.”

And for buyers of IT products and services, the negotiation of vendor contracts today is particularly charged. “They’re dealing with more vendors than ever before, for more niche services, in trying economic times, and — in some cases — being handed very boilerplate deals for commoditized services,” says Ed Brodow, creator of Negotiation Boot Camp seminars.

The introduction of hosted products and services was supposed to make IT purchasing easier, but “confusion in the cloud era has exponentially increased,” says Tony Greenberg, CEO of RampRate Sourcing Advisors. “Things are actually getting more complex.”

The good news is that effective negotiation is a skill that IT buyers can become proficient at by approaching it as they would any other business-critical process: by taking their time, doing their homework, understanding the perspectives of various stakeholders, relying on data rather than instinct, focusing on discipline rather than emotion, and remaining vigilant even after the contract is signed.

Following are some specific practices that IT buyers can implement to increase their negotiation prowess.

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