Don't let your I.T. Contracts Become "Hostage Negotiations"

Admit itYour organization probably does a poor job at managing the dozens to hundreds of contracts that you’ve signed for all different kinds of IT and telecom services.  I’ve been in meetings for 20 years and have seen the blank stares on IT professionals’ faces when I ask, “When does your contract expire for (UC, cloud disaster recovery, telecom, router maintenance, etc)? Before either of us does too much work in evaluating better/faster/cheaper/more powerful alternate services, we should know whether you (the client) will be financially penalized for terminating your current services.” 

I’ve heard the stories from IT decision makers whose hopes of implementing a new technology were dashed because of a lack of management of existing technology and IT contracts -  

  • “Well, my predecessor signed that contract. I don’t know where it is.” 
  • “I didn’t know the contract had an auto-renewal clause and that we’re locked into another 3 yr contract”. 
  • “I figured that we could terminate the contract without penalty since we’re on year 4 of a 3 yr contract 
  • “I didn’t know they could change the rates in the middle of the contract.” 
  • “I can’t believe (insert tech provider) would triple our rates as soon as we got to the end of our contract! 
  • “I didn’t know that adding or changing one component of my service would essentially extend the term of the entire contract”. 

Don’t feel bad if you’ve experienced any of this.  

Most technology providers are not going to proactively reach out and notify you that your contracts are expiring. Why? Doing this gives away contract renegotiation leverage that the provider has if you get too close to the expiration date and want to change services and providers. If you don’t provide for enough runway at the end of your existing service contract to install the replacement service from the replacement provider, the existing provider will either A) jack up your rates significantly at the end of the contractual term or B) demand an extension for service to continue beyond the original contract expiration.   

I know, I know.  You say that you’ve signed and evaluated a hundred technology contracts before and feel comfortable with the language. 

With this said, all technologies have various nuances and complexities that make their correlating contracts different from the next. Those nuances and complexities do necessitate different clauses, terms, and contractual lengths though. Do you know what they are? Do you know which requests are typically rejected by technology providers and which ones are workable items based on previous experiences? 

Ok, fine. You know how to negotiate the perfect contract with all the technology providers on the optimal terms(completely unrealistic, but for the sake of argument, I’ll give you this). How are you tracking all of the end dates? What happens if the contract gets extended beyond the original term due to changes made to services?  Do you track this?  When do you engage the providers for renewals? All of them have different policies regarding early renewals and the ability to take advantage of.   

Do you see where I’m going? Technology and telco providers, their contracts, their procedures for reengaging their customers near contract expirations are all designed to benefit THEM, NOT YOU.   

Which brings me to two of the reasons why you’d work with C3 Technology Advisors.   

  1. Leverage our expertise in negotiating contracts. Not sure what price can be negotiated? What length of service can be negotiated? What special clauses should be asked for? Take advantage of our expertise and experience negotiating the same things for other clients 
  2. Track your spending, expiration dates, amendments and avoid vendor gotchas. We track your technology providers, services, orders, contracts, amendments, account numbers, spend, end dates and more for you. Why wouldn’t you want this? Why not have an organization looking out for you when you aren’t looking? Why not have an organization continually optimize your spend if it doesn’t cost you a dime and your organization doesn’t need to expend energy?   

Utilize the experts at C3 when making big technology decisions and pick up on these important benefits. Otherwise, you may find that your ability to make important tech changes gets hampered by nothing more than your current contractual obligations.