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Affordable IT: Negotiating IT Contracts

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Never Negotiate Alone

If there's one thing IT professionals have learned about purchasing, it's that there's safety in numbers. Just as a vendor has a sales team, an IT organization needs a negotiation team--stacked with those who know how to work a good deal--and spot a bad one.

When it comes to negotiating a large or long-term contract, a legal adviser is crucial. In large organizations, a member of the legal department may be available to participate in the negotiations; in smaller companies, a third-party counsel should look over any contract before it's signed. The legal counsel can identify potential problems in the fine print and ensure that you have clearly stated what's expected of the vendor.

Most large companies also have the advantage of a purchasing department that can help research alternatives, negotiate contracts and establish long-term relationships with vendors. Although some IT people are wary of including the nontechnical purchasing department during the product evaluation process, remember that for purchasing professionals, negotiation is part of the job. Even in smaller companies that don't have a purchasing department per se, it's often advantageous to bring along an individual who may be familiar with the company's usual negotiating procedure and have some suggestions for gaining leverage with vendors.

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