Eight checks to make before an important IT contract renews

A renewal is the moment you have the most influence over a supplier. Too often it arrives as a surprise, with a few weeks to go and no real alternative. These eight checks help you get ready in good time. Ideally, start a year or more before the contract ends.

1. Know your notice date

Find the end date and the notice period, and work out the last date you can give notice. Check whether the contract renews automatically if you do nothing. Put the date in a calendar that someone owns.

2. Check what you actually use

Compare what you pay for with what you use today: users, licences, devices, sites and services. Remove anything you no longer need from the renewal scope.

3. Compare invoices with the contract

Look at a year of invoices against the contract and any agreed changes. Look for charges that do not match a clause, and for credits or rebates you are owed but have not received.

4. Look closely at price increases

Check how prices have changed since signing and whether increases followed the contract. If the supplier has proposed a large increase, ask for the basis of the calculation in writing.

5. Review service performance

Gather the service reports for the last year or two. Note missed service levels, unresolved issues and any service credits due. Poor performance is a fair point to raise in a renewal.

6. Check the pricing model still fits

Ask whether a fixed price, time and materials or unit pricing best suits how you use the service now. Renewal is the natural time to change it.

7. Read the exit terms

Even if you plan to stay, check your rights to leave, the notice periods and any exit costs. Good exit terms protect you during the next contract term.

8. Test the market, even lightly

A short market scan shows what alternatives exist and what they might cost. Even if you renew, a supplier who knows you have looked tends to negotiate differently.