You might be the IT manager, departmental head, or perhaps just the chap that your boss put in charge of IT because of your slightly better literacy than the rest of your department.

Regardless of the size of your company however, you will definitely come across situations where you have to liaise with external IT vendors or providers to procure either the requisite hardware or services for your organization.

Just for folks like you, CIO came out with a very practical, yet easy-to-follow guide on IT Procurement - Worst Practices. To summarize, the things never to do are basically:

Never

• Share a vendor’s pricing with another vendor - Psst, you know, your competitor is giving me this price…
• Putting a vendor through too many fire drills - I need this equipment, and I need it NOW!
• Making vendors pay for every mistake - Well, I’m sure I told you I don’t want the 5-CAL license pack. I don’t care that you have already paid for it, take it back.
• Using a vendor exclusively for knocking down the price of the preferred vendor - I have two other quotes here with better pricing than your latest quotation, so please revise yours
• Using RFPs or RFQs but not not adhering to the stipulated conditions when it comes to decision time - …

Personally, I always believe in treating my vendors well. It is important to understand, that unless you are talking about the really heavy-hitting enterprise gear or buying scores of high-end server boxes, the margin for majority of IT hardware sales can actually be depressingly low.

Your mileage might vary according to your locality, but this is certainly very true in Singapore where I come from. Consider standard servers; there are really only so many IBM and HPmodels. For software licenses, unless you qualify for their special volume licensing programme, Microsoft does have standard pricing more or less across-the-board, as with most other major software companies.

Now, understand that this certainly does not stop me for getting two or three other quotations as part of my personal due-diligence. Neither does it stop me from calling up my vendors to explain if the prices of certain items inch too high.

However, the realization must be that vendors, like any commercial enterprise, does need to make money off of their sales. Also, sales personnel might have their hands tied by non-negotiable mark-ups set by their management.

Hence it would sour a relationship really quickly if you insist on haggling down the pricing for every single item like you would at a flea market. Even if you manage to shave off a percentage point off the price, they will just have to add it in elsewhere - or simply start off with a higher markup in their next dealing with you.

For myself, I would be willing to purchase from a vendor who might cost a few hundred dollars more overall, but who can give me the assurance of competency and trust that no extraneous but important information is being withheld. For example, in cases where it is imperative that certain equipment arrive before certain deadlines, I would make sure to impress it on the vendor from the start.

Where there is a positive relationship, the vendor will know that he can sound-out early in the face of potential problems without losing the entire deal, such as in cases where certain equipment stand the risk of being delayed. In such instances, I would still have sufficient time to approach other vendors, candidly explain that the current deal has already been confirmed, but with certain equipment still needed. You can be sure that these vendors would smell the potential future business, and fall over themselves to ensure that the needed hardware are secured.

There are other tips as well of course, such as spreading purchases across two to three vendors. One could be your “preferred” vendor, whilst the other two would have sufficient occasional sales to keep them interested and ready to please. Suffice to say that proper vendor management is more than just the science of comparing price quotes, but is an art as well.

But if done well, can certainly ease a lot of potential, and probably needless, headaches.

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