Worst Practices: Use at Your Own Risk

Securing the best possible price on IT products is critical to the health of any organization that spends a material amount on information technology. But there are tactics both ethical and unethical that can damage not only your future ability to secure the best possible pricing but also you and your organization’s reputation. Common practices that do more harm than good include:

Sharing one vendor’s pricing with another. You may be able to get a slightly better price on a few deals, but eventually, no vendor will want to do business with you. The harm to a vendor is less that particular deal and more that you are providing their competition with a critical example of how they price and present offers. Never do it.

Putting a vendor through too many fire drills. Needing a price now and needing the product tomorrow gives a vendor a chance to shine, but eventually, the cost of accommodating your recurring emergencies shows up in your price, as the vendor attempts to adjust his profit based on their level of effort.

Making vendors pay for every mistake. Asking your vendor to eat every mistake, theirs and yours will first cost you higher prices on future orders, and eventually cost you the relationship.

Using a vendor exclusively to get a quote to help beat down the price of your first choice. Vendors are willing and more than happy to provide pre-sales support and prepare price quotes. However, if your sole goal is to simply leverage the quote in order to obtain better pricing from the vendor you’ve already decided to go with, think again. Vendors catch on quick and using a vendor exclusively for this purpose can result in reduced interest from other vendors reducing your long-term competitive leverage or come back as higher pricing when you really need the vendor for something.

Using RFPs and ignoring the responses, changing the requirements, or awarding business on different criteria. With vendors exhausting considerable resources responding to RFPs, it is the responsibility of the issuing organization to make sure that it legitimately plans to evaluate and award business based on them. If vendors feel typical RFP standards are not used in awarding business, vendors will likely invest fewer resources or ignore all together future RFPs. Also, when an organization has crafted an RFP so that only one vendor’s product meets the requirements, essentially resulting in a ‘sole-source’ RFP, that organization is weakening vendor interest in future requests. If a specific product is desired, but internal processes dictate an RFP, solve the issue internally rather than burdening vendors with useless efforts.