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While cost-reduction is an important objective for IT Managers, there can be significant downsides to over-emphasis on price in negotiating vendor agreements.
In order to describe the risks associated with a cost preoccupation, this research note discusses:
- The importance of a holistic approach to contract negotiation.
- Avoiding non-productive price negotiations.
- Recognizing the potential effect on service quality and scope when vendors excessively trim price.
Balance efforts to reduce price against the cost of negotiation and the possible repercussions of a relationship that is not profitable to the vendor.
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