Renegotiating with vendors can save money

Looking to cut costs and save money on some of those IT contracts? A survey by the CIO Executive Board found that six out of 10 CIOs are trying to lower costs in 2009 by renegotiating IT vendor contracts. In interviews with senior IT leaders, ITworld.com gathered some advice on how to go about this delicate, but in some cases very necessary, cost-saving exercise.

From the start, assume you have leverage and act that way. Even if you're bound by a signed contract, that contract will end eventually and vendors know you'll be less likely to renew if they aren't cooperative. The IT pros also suggest being professional in the negotiations, explaining your business problems and the reasons your organization needs better pricing.

In some cases, vendors may not being willing to cut prices unless there is an upside for them such as a contract extension. And if the contract is set to expire in the near term, solicit formal bids so that you can switch to vendors offering a better deal or have some negotiating power with your current contractors. If you sign new contracts during these difficult times, make sure that you will have the right to drop or reduce support down the road, just in case you have to make even bigger budget reductions.

For more about saving money:
- see this ITworld.com article [1]

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Gartner: 20 ways to cut costs in IT [4]
Grim outlook for IT spending [5]