Put the horse before the cart

Never begin looking for technology solutions without knowing what you're looking for. Know the business problem you're trying to solve. If you know you need a software package that automates statistical analysis, flush out a more detailed set of statistics requirements (types of model, sample sizes, etc.) before you begin to shop around. Usually, software products have bells and whistles that, although look cool, are not absolutely needed. Before you begin comparison shopping, define your basic technology and business requirements. Knowing what you really need will give you confidence and leverage in a negotiation.

Always comparison shop

No matter what, always evaluate multiple options. If you're looking for software, don't get excited and latch on to the first package that looks good. And certainly don't give a sales rep. the impression that you're overly interested in their solution. They will be less likely to move during a negotiation. The IT market is over abundant with hardware, software and services solutions. Probably, you will have many options to choose from. Be picky!

Create your game plan

Before you begin negotiating a deal with any technology vendor, plan your negotiation carefully. I have included some general planning questions that you should answer in preparation for a negotiation. The questions I have listed below may not make sense for your negotiation, so feel free to modify them for the occasion. The point here is to prepare in advance. You don't want to figure out the answers to these types of questions in the middle of a negotiation as it may give an inch to the sales person. I would even recommend writing the questions and answers on a sheet of paper for reference.

1. Price:

• How much do you think you should pay for this software or service?

• What is the market rate or street price?

• What are you prepared to spend? What is the highest price you would be willing to pay?

2. Features:

• What key features and capabilities are you looking for?

• Force rank the features. What does the prioritized list look like?

• Of the features you need, categorize them into two categories: "must have" and "nice to have".

3. Service Levels:

• Do you expect some level of performance from the equipment, software, or service?

• Are there up-time requirements?

• Do you need 24x7 technical supports?

• Do you expect the vendor to incur a penalty if they don't perform up to your service levels?

4. Trades:

• What is most important to you: price, features, or service level?

• Force rank these in order of importance.

• Would you be willing to trade items between categories? For example, would you be willing to give up a certain service level for a lower price?

5. Suppliers:

• Which vendors offer something that you think could meet your needs?

• How long have these companies been in business?

• Are you doing business with them already? Do you have a good business relationship with them?

6. Gravy:

• If you had your druthers, what extras would you like the vendor to throw in for free?

• Would you like training or extra manuals?

• Would you like special reporting?

You will probably have more questions in addition to the ones listed above. Take the time to write them down and create the answers. Once you have established your position, you will save a great deal of time evaluating your potential vendors and negotiations will be less painful.