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The art of negotiating an IT contract

9/14/2011

A recent Business News Daily article provided tips for companies on how to successfully negotiate an IT contract.

The first important step company negotiators need to ensure is that they do not succumb to any pricing pressures presented in the process. According to the article, IT vendors can resemble car dealers in a sense, as they have sales quotas they need to meet and may needlessly push deals and prices.

"If they tell you the deal is only good through the end of the month, don't fall for it," Chris Cain, a partner at Milwaukee-based law firm Foley & Lardner, told the news source.

Instead, negotiators should check with industry peers initially to get a sense of what the going rate is for any software.

Next, companies need to be careful when agreeing to any customization. Carefully reading a contract's terms of use is important, as companies may be blindly agreeing to unwanted services and less-than-stellar results instead.

Finally, negotiators should enter contract talks knowing what their company can do without and having an exit strategy in mind. By knowing what services a company doesn't need, negotiators can leverage those aspects in lieu of other terms. Having an exit strategy allows a business to pull out of a deal if any demands aren't met or properly handled.