Although contract negotiations have not changed much in recent years, it is becoming much easier for two businesses or organizations to make faster and smarter decisions. In most cases, contraction negotiations are defined as the process of coming to a combined agreement on a set of legally binding terms. As two companies begin contract negotiations, each entity will work to ensure that they are obtaining favorable terms while also minimizing financial, operational or legal risks that may be present throughout the process.
For example, when negotiating a contract with an IT services vendor, a company may choose to pursue the ability to pay monthly instead of having one lump payment annually. While there is no “correct” way to go throughout the process, it is important to itemize the options that make the most sense for your business and negotiate effectively enough to ensure those items are getting the attention they deserve. Ultimately, this is one of the best ways to ensure long-term success and minimize any potential contractual problems that may occur both currently and in the future.
Challenges with IT Contract Negotiations
Negotiation periods are often the most important aspect of the contract lifecycle and any delays in generation or execution may ultimately slow a business down; however, they may not have a direct impact on the business’ bottom line. On the other hand, a poorly drafted contract or subpar negotiations could create legal obligations for an organization that lasts for years to come. With so much on the line, it becomes much easier for a business or organization to start to understand the long-lasting impacts that are associated with contract negotiations – both good and bad.
If you do not know the history or current status of your existing contract negotiations, there is a good chance that you are not achieving the best outcome possible with the terms that you are accepting. For this reason, having a contract tracking system in place is critical. This not only established a defined view of what services are included with the contract, the term period and other important information like personal obligations, pricing and much more. Without a good outlook on what IT services are needed to compete for the future, a business or organization can position themselves to gain the most out of their technology contracts.
Any organization that is dealing with expired contracts should take the time to determine where their current technology stands and identify what technologies will be needed to scale throughout the contract period. Taking this step can help identify any weakness that may be present and improve the contract negotiation process. In addition to internal tracking, working with a team of expert IT consultants may also help determine what additional services may be needed to provide the best service possible to internal parties or external parties that the organization may serve. If you are interested in learning more about the services that Excipio Consulting provides, please call our corporate office at (918) 357-5507.