With inflation rates at their highest level in decades, how are you approaching vendor negotiations to mitigate the impact?
Director of IT in Software, 201 - 500 employees
I am trying to negotiate multiyear contracts to lock the price so at least I am not affected but the high inflationCIO/CISO in Healthcare and Biotech, 11 - 50 employees
We are being thoughtful with any new commitments, as a regular practice we don't commit long term to any service unless the discounted rates make it worthwhile (which is rare). We haven't see much impact from inflation on commodity service rates.Chief Information Technology Officer in IT Services, 201 - 500 employees
As I can see also try to negotiate multi year contract and one payment which saves me money. It's easy for all the systems that we have on premise, but with the cloud it's hard to know what's coming and how the provider will rise there subscription and Lecompte-Marmo models!CIO in Services (non-Government), 201 - 500 employees
I'm negotiating harder than I usually do on prices, and trying to get multi-year discounts.Head of Digital and Information Technology Asia and and Global EA in Healthcare and Biotech, 5,001 - 10,000 employees
It's important to review fine print of the contracts, terms and conditions, cost, length, coverage, options to exit, change or additions.Chief Technology Officer in Software, 11 - 50 employees
Certainly negotiating discounts, multi year contracts and bulk purchases is important in an inflationary or non-inflationary environment, however we always try to look for adding more value as the best way to negotiate contracts. You would be surprised what people will put on the table to avoid lowering their bottom line. So, whilst getting the best price is important there always tends to be a loser in the relationship so i do my very best to extract more value first.Director in Manufacturing, 1,001 - 5,000 employees
We always negotiate an annual efficiency improvement rate (cost reduction) and depending on the service it’s 3% to perhaps 8%. On top of that we include out clauses with 60 days to as much as 6 month’s notice. This allows us to initiate another RFP if we need to achieve a new efficiency target (cost reduction)We also include cost reductions if we have head count reductions over 2% but this can be very dependent on the type of service. If the service isn’t headcount related this wouldn’t be included
During challenging economic times we get very aggressive “efficiency targets “ from the CFO. You need to get very creative with vendors and insure they are aware how your company strategies change based on finances and work together on getting flexibility in your contracts
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