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Special Pricing Challenges in IT Procurement


On the face of it, negotiating global special pricing agreements with IT manufacturers is a “no-brainer” but there are pitfalls to look out for, and alternatives to consider.

Some important questions arise when we look at the basis for special price agreements.

One assumes that price trends are upwards but that is not always the case.

Is proof of savings data available over the period of the agreement? For every product and category?

Will the negotiated global price actually be the same in every country where you order?

Should there be geographic variations?

How will you monitor, and benchmark market prices to know what “special” really means in a specific country or region?

Will your benchmark data be available in real-time?

Framework and special price agreements take up a lot of executive time to negotiate. Will the ROI (return on investment) on every agreement be worth the time spent?

Once an agreement is concluded what happens when supplies are unavailable or scheduled delivery times are unacceptably slow in certain territories?

In this paper we examine these, and related, questions to special pricing agreements in the IT category and explain how we at Markit overcome the related challenges for our multinational clients with an open margin (cost-plus) pricing model and our marketplace-as-a-supplier approach.

Download the report free from the Markit IT procurement publications page.