These days, there are indeed some silver linings to the weak economy.
The old adage that every cloud has a silver lining isn’t always true but, these days, there are indeed some silver linings to the weak economy. Of course, there may also be some dark clouds associated with each silver lining.
If you’ve been postponing an IT project— automatic identification and data collection or otherwise—and still have a budget for it, now may be the time to act. This is particularly true of projects that improve productivity, customer service, efficiency or quality because you can demonstrate a good ROI, especially if the “I” (investment) can be shown to be lower than initially anticipated.
Despite the current doom and gloom pervading the stock market, most experts know that the current downturn won’t last forever. And, companies with a long view will want to be in position to capitalize on the recovery as soon as it begins.
Yes, you have to be mindful of your bottom line, but so do your vendors. So, this might be a great time to go shopping for deals on systems, software and integration.
Value-added resellers and integrators will try to protect their most important assets during lean times, and those assets are their skilled people. They need to keep them working, even if margins shrink. And, if they have inventory on which they’re paying interest, they might be willing to let it go for cost or nearly cost as a money-saving measure.
But, there are a few caveats.
Negotiation along these lines is a bit like an underinflated balloon. Squeeze it in one place, and it will balloon somewhere else. Force vendors to cut equipment costs too much, and you’ll see higher implementation fees and vice versa. So, while you may not be able to squeeze them much on price, you may be able to negotiate additional services or features.
What might result in a win-win situation for you and your vendor? Here are some areas to consider:
Ask for extended warranties or service contracts (including replacement batteries, if applicable). This can save a considerable amount of money over several years. However, if your confidence in the company’s ability to perform over the long run isn’t high, this is probably not the best approach.
Ask for additional employee education. This is a very low-cost option for the vendor but potentially high value for you. And, it’s a short-term deliverable that can be scheduled before the final project payment is made. However, be sure to stipulate exactly what the education will cover, how many employees will be included and other details in the contract to ensure you get something of value.
Ask for some additional bells and whistles if you know they’re available and can be useful. Some products have a number of extended features built in that are not enabled unless you pay an additional fee. Asking a vendor to turn on these features is, again, a low-cost option that may be worth more to you than it costs the vendor. However, make sure integrating the additional features is covered in the contract.
Ask for the next higher level of equipment. In many cases, the difference in price between two levels of equipment is more margin than cost, something the vendor may be willing to negotiate. However, be sure service and maintenance costs aren’t proportionally higher.
What you ask for depends on your system requirements, vendor capabilities and the relationship with your vendor. In the long view, vendors that help your company thrive in the near term ensure their own success down the road.
Bert Moore is a 20-year veteran of the AIDC industry. He is director of IDAT Consulting & Education, Alpharetta, Ga.