3 Tips to Negotiate a Deal with Software Vendors

Hardware is but one part of computerizing a business’ operation. You will seldom go wrong with choosing the right ones. However, software, the other part, is a little more complex animal. Anything in software can go wrong and remember that unless you are able to make a systematic study, you will end up with the wrong product. In fact, unless your software development company is able to perceive your organizations needs in its totality, the whole exercise of computerization can go wary.

When you look around for a software developer, there are at least two aspects that you need to take a close look at – the developer’s experience as it relates to your needs and the technologies they use in developing your products. Not all developers start with the software from scratch; more often standard software is customized to customers’ needs. If your needs are exclusive and you need a unique product, then the only way to meet your needs is to hire a custom software development company.

Once you are satisfied with the developer company’s competence in meeting your requirements, you can begin with the negotiation process. If your vendor won’t relent on the price front in the beginning, you can change their stance by simply telling them that you have others shortlisted to do the work. Negotiating a deal is very tricky in software business, but nevertheless you can do it. Many times, the vendor will begin with a big quote and as the negotiation process gets closer, they will be relenting and more accommodating.

Here are 3 tips that will help you close a deal at prices much cheaper than with what you had started.

1.       Never tell your vendor that your company has given you a free hand and a big a budget to play around with. Instead tell them that you have a budget and you are obliged to say within its bounds. Also make it clear that, you have shortlisted couple more vendors and negotiations are in progress. This will encourage the vendors to come down to a realistic price level. But don’t press them for price cuts that will encourage them to produce sub standard software. After all, you should remember that they need to spend money on experienced coders, and hiring coders is an expensive affair.

2.       If the quote that a vendor gives is too complex and has too many riders in it, you should ask them to simply it as much as possible. If the proposal has difficult to understand clauses, you could be taken for a ride in the form of hidden fees. A vendor might say that they will provide training for a minimum number of people without actually revealing the number. This is a red alert. Ask them to be clear about what they are saying. Don’t ever leave anything to chance. Midway through after you have paid an upfront fee, withdrawing from a deal can hurt you more than the vendor.

3.       As in any other process, software is not made and implemented on a single day. There is a period of evolution during which improvements need to be made as you discover that changes are needed. It so happens that, vendors keep the source codes away from the users. This they do to have a firm hold on you. Without the source code, you will have little option but to go back to the vendor every time you want a change or improvement to the software. Therefore, bring in this issue when you negotiate a deal. The little price you pay for the source code is worth every penny.