Time before renewal is key when negotiating a contract. We recommend our clients to start thinking about their contract renewal and renegotiation 36-48 months prior to their current contract’s expiration. This allows enough time for a thorough assessment of the technology and service levels being provided, including the role technology will play in achieving your strategic goals in the mid to long term. Having a lead time of at least 36 months will ensure you can still make the call to switch providers if needed and have time to ensure a smooth transition.
Most firms do not make a note of when their contract is up for renewals. In fact, we know of a few firms that have been informed by their vendors right before the contracts are set to expire and it automatically puts them at a disadvantage if they have any terms or pricing they want address.
Changing core technology providers is not a simple task. It can take months to evaluate new vendors, not to mention negotiating and implementation times. Given the complexity and dollars associated with these technology solutions thinking ahead becomes a vital part of the process.
Even if you just finished signing with your current provider – remember your dates. Set a reminder for your team to revisit the contract with plenty of time to ensure your firm is in the best position to switch, shop around for quotes or renew a longstanding agreement.