Learn some best practices to help you negotiate IT sourcing contracts for AR and VR services, from assessing your needs and goals to managing the relationship and performance.

A standout vendor is one willing to educate you and ideate with you before diving into the work. This consultative approach is invaluable, especially in a field as dynamic and complex as XR. Good vendors clarify technical jargon, demystify processes, and ensure you grasp the essentials. They're willing to brainstorm, conceptualize, and validate ideas collaboratively. Essentially, they're adding value before the formal project even kicks off. When negotiating contract terms, don't just focus on deliverables and costs. Assess how much the vendor is willing to invest in your understanding and confidence. This upfront engagement can be a strong indicator of the quality and value you'll get in the longer run.

What are the best ways to negotiate IT sourcing contracts for AR and VR services?

Augmented reality (AR) and virtual reality (VR) are emerging technologies that can enhance the user experience, improve productivity, and create new business opportunities. However, they also pose some challenges for IT sourcing, such as finding the right vendors, defining the scope and requirements, and negotiating the contracts. In this article, you will learn some best practices to help you negotiate IT sourcing contracts for AR and VR services.

1 Assess your needs and goals

Before you start looking for AR and VR service providers, you need to have a clear idea of what you want to achieve, how you will measure success, and what resources and capabilities you have. This will help you define the scope and specifications of your project, as well as the budget and timeline. You should also consider the risks and benefits of outsourcing versus developing in-house, and the legal and regulatory implications of using AR and VR.

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Shawn Sanford

Information Technology Professional and Entrepreneur
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We recently bolstered a customer's security for a Northrop Grumman project. Just as meeting security standards is crucial for projects, effective vendor management is vital in today's interconnected business landscape. It mitigates third-party risks through ongoing security assessments, reducing vulnerabilities and fortifying partnerships. Establish a vendor risk management program with clear security requirements in contracts to enhance overall security.

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2 Research the market and the vendors

Once you have a clear vision of your project, you need to research the market and the vendors that offer AR and VR services. You should look for vendors that have relevant experience, expertise, and references in your industry and domain. You should also compare the quality, features, and prices of their services, and check their reputation and reviews. You can use online platforms, trade shows, industry associations, and referrals to find potential vendors.

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Daniel Colaianni

AIXR Co-Founder & CEO | VR & AR Innovator | XR Awards Co-Founder | Tech Leader | Spatial Computing | Speaker
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The fast-moving nature of XR makes credibility a shifting target. Everyone claims to be an expert, but expertise today might be outdated tomorrow. So, look for vendors who are continually leveling up. One good indicator is what they do outside client work. Are they tinkering on their own projects? These side ventures often serve as experimental labs, pushing the boundaries of what's possible and giving you a sneak peek into their skill level and innovation. Also, consider their community involvement. Are they showing up at leading industry events, not just as attendees but as speakers or contributors?

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3 Prepare your negotiation strategy

After you have shortlisted a few vendors, you need to prepare your negotiation strategy. You should identify your priorities, objectives, and alternatives, as well as the vendor's strengths, weaknesses, and motivations. You should also set your target price, your reservation price, and your BATNA (best alternative to a negotiated agreement). You should prepare a list of questions, issues, and concerns that you want to address with the vendor, and a list of concessions and incentives that you can offer or request.

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4 Negotiate the contract terms and conditions

When you enter the negotiation phase, you should communicate clearly and respectfully with the vendor, and focus on creating value and building trust. You should avoid making assumptions, jumping to conclusions, or accepting the first offer. You should also be flexible and creative, and look for win-win solutions that meet both parties' interests. You should negotiate the contract terms and conditions, such as the scope, deliverables, milestones, payment, warranty, maintenance, support, SLA (service level agreement), IP (intellectual property) rights, and termination clauses.

Add your perspective

Daniel Colaianni

AIXR Co-Founder & CEO | VR & AR Innovator | XR Awards Co-Founder | Tech Leader | Spatial Computing | Speaker
Report contribution
A standout vendor is one willing to educate you and ideate with you before diving into the work. This consultative approach is invaluable, especially in a field as dynamic and complex as XR. Good vendors clarify technical jargon, demystify processes, and ensure you grasp the essentials. They're willing to brainstorm, conceptualize, and validate ideas collaboratively. Essentially, they're adding value before the formal project even kicks off. When negotiating contract terms, don't just focus on deliverables and costs. Assess how much the vendor is willing to invest in your understanding and confidence. This upfront engagement can be a strong indicator of the quality and value you'll get in the longer run.

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5 Review and finalize the contract

Before you sign the contract, you should review it carefully and make sure that it reflects what you agreed on during the negotiation. You should also check for any errors, inconsistencies, or ambiguities, and clarify them with the vendor. You should consult your legal and technical advisors if you have any doubts or questions. You should also ensure that the contract is compliant with the relevant laws and regulations, and that it protects your interests and rights.

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6 Manage the relationship and performance

After you sign the contract, you should manage the relationship and performance of the vendor. You should communicate regularly and transparently, and monitor the progress and quality of the service. You should also provide feedback, recognition, and support, and address any issues or problems as soon as they arise. You should also evaluate the results and outcomes of the service, and measure the return on investment and the customer satisfaction. You should also review and update the contract if needed, and negotiate any changes or extensions.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What are the best ways to negotiate IT sourcing contracts for AR and VR services?

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1 Assess your needs and goals

2 Research the market and the vendors

3 Prepare your negotiation strategy

4 Negotiate the contract terms and conditions

5 Review and finalize the contract

6 Manage the relationship and performance

7 Here’s what else to consider

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