In Negotiations, Knowledge Is Power

Smart, tough negotiating can force it vendors to make concessions, especially in times like these. But haggling alone can get you only so far.

Smart, tough negotiating can force it vendors to make concessions, especially in times like these. But haggling alone can get you only so far. To get the best deals, IT managers must also go into negotiations armed with accurate data on the software and hardware assets they have and how theyre using them.

Putting people in charge of asset and vendor management is part of the solution, but IT asset management software can help them gather the data that can make or break a deal. The software, which typically includes agents that are installed on desktops and servers, tracks the number and type of software licenses and hardware features that are installed on devices on local networks. They also allow IT managers to query a database to generate reports on usage levels and, in some cases, provide modules for tracking and managing the vendor contracts that bring it all together.

Asset management software products—which typically cost in the range of $30 to $45 per user or per asset tracked and are available from vendors such as Express Metrix LLC, of Seattle; Scalable Software Inc., of Houston; Isogon Corp., of New York; and Tangram Enterprise Solutions Inc., of Cary, N.C.—have historically been used to help enterprises ensure compliance with licensing agreements, determine where to add or drop software or hardware, and help enforce security practices.

With the economy slowing, though, customers are increasingly waking up to asset management softwares potential to provide them an upper hand in vendor negotiations. Having proof that a certain proportion of licenses arent being used could provide leverage in negotiating license renewals or allow an IT manager to reopen talks to lower maintenance or support costs. In cases where the vendor offers various types of licenses and volume discount options, details about usage could help an IT manager squeeze into a lower-cost category.

Take annual software maintenance bills, for instance. All too often, procurement departments automatically pay those bills without checking whether all the support is still needed, said DaWane Wanek, senior vice president of global sales at Scalable Software. With usage data at hand, they could generate a quick report to decide whether renegotiating that contract is called for.

"Vendors are very receptive to working on better deals if you provide to them the data," said Florencio Espinoza, group lead for IT at IPNet Solutions Inc., in Newport Beach, Calif. Espinoza is using Express Metrixs Software Manager suite.

While asset management software is a critical piece of vendor management, it must still be combined with formal, internal processes to pay off, said Howard Rubin, a research fellow at Meta Group Inc., in Stamford, Conn.

"The companies that get a lot of leverage will know No. 1 what their asset base looks like, will have a consolidated list of who theyre managing contracts with and will be managing forward," Rubin said.