Securing the best possible price on IT products and services is critical to the health of your organization. But there are tactics both ethical and unethical that can damage not only your future ability to secure the best possible pricing but also your organization’s reputation.

Common practices that do more harm than good include:

• Sharing a vendor’s pricing with another vendor. 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 a particular deal, and more your providing their competition with critical examples of how they price and present offers.
• Putting a vendor through too many fire drills. Needing a price now and the product tomorrow gives a vendor a chance to shine, but eventually, the cost of accommodating your recurring panic attacks shows up in your price, as the vendor attempts to adjust the 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 your first choice and never actually giving business to that vendor.
• Using RFPs or RFQs and ignoring the responses, changing the requirements, or awarding business on criteria other than what was specified in the RFP/RFQ. With vendors exhausting considerable resources responding to RFPs and RFQs, 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 vendors 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.

These are just a few of the more common practices that hurt an organizations reputation and buying power. Regardless of size or industry, fair and straight-forward business practices will always be a cornerstone of an effective IT procurement function.

1 of 11 in a series of posts related to procuring IT products and services.

About the Author: Patrick Chapman's experience includes a variety of business and technology functions, including strategy, finance, application development, and infrastructure planning.

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