In many businesses general staff, rather than the IT department, select and sign up for SaaS tools. The details of the various specialist tools are not relevant to the business at large and payment is generally on a contractless, monthly basis.
On the other hand, IT infrastructure is relevant to everyone because it is the minimum required to do any work at all. It includes physical things like network hardware, services like product support, and common / shared software such as email.
Because the infrastructure is required by everyone, it is easier to predict longer term needs. Resource use is closely linked to the business size and client base, and big changes, such as changing your email provider, are unlikely because it is hugely interruptive to every staff member. This stability makes businesses more inclined to sign longer term contracts that allow them to negotiate better terms and rates.
Contract negotiations can be lengthy
Contracts are usually negotiated, as opposed to the one-size-for-all monthly SaaS service plans, and often involve multiple stakeholders on both sides. The negotiations may require a few iterations and spread over a period of days to weeks.
It is important to conduct the negotiation process with care and attention because contracts lock in the terms for a significant length of time. Any dissatisfaction with the terms of an existing contract must be addressed during the re-negotiation phase when the contract is up for renewal, and this re-negotiation will probably be a similar lengthy, iterative process as the initial contract.
When a contract gets close to its expiry date the vendor will make contact to start the negotiation process because they want the continued business. However, their reminders may leave insufficient time for your internal decision making, especially if you want changes to the existing terms. And since these contracts involve IT infrastructure it is critical that the negotiation is completed and the contract renewed before the initial one’s expiry date otherwise the business may suffer great damage when pieces of infrastructure are shut down.
Track expiry dates for more negotiation time
To make the most of the opportunity for contract term changes afforded by the expiration, your business needs enough negotiation time taking into account your internal decision making processes as well as the vendor’s. This can only be ensured by tracking contract expiration dates internally and not depending on vendors to provide notifications.
Contracted vendors tend to accumulate over time. Such that it becomes difficult to reliably keep track mentally, especially because contracts only need attention once every period, typically 1 or 3 years.
One option to track all the expiration dates is to depend on the company’s accounts department to provide the early notification. Another option is to use some kind of tool that can send automated reminders. Possibilities include
- setting reminders in your calendar tool,
- use project management software with tasks representing contracts,
- build a custom solution using low code tools, or
- use a dedicated contract and license tracking service.
If you continue depending on contract renewal reminders from vendors the business may find itself unnecessarily locked into contracts with unsuitable terms.