Much like negotiating a contract or renewing a contract, the vendor contract mid-term review can help you gather important information regarding your vendor and the products and services they offer, as well as to help assess the progress of your contract. This is the time to reflect and answer questions such as, “has the service or products been delivered or are they performing as they should?” and “Is there anything negative that can be improved upon?”
What Vendor Contract Mid-Term Reviews Can Accomplish
A mid-term review is typically conducted halfway through the initial term of your vendor contract and is primarily used to determine how your relationship with that vendor is progressing. Mid-term is the perfect time to conduct a performance review to make sure they are meeting your expectations… that being said, it’s always good to check in on your vendor’s performance throughout the contract lifecycle.
So, aside from being a good “temperature check,” what else can mid-term contract reviews help your organization achieve?
Here are a four specific ways mid-term reviews help protect and support your organization:
- Allows time to explore alternative vendors if an organization is unsatisfied with performance, pricing and/or product and services.
- Gives an opportunity to consult with vendors about updated products or services (or about modifying existing ones).
- Let’s vendors know their performance is actively being monitored to ensure compliance with contractual terms.
- Provides an opportunity to keep open lines of communication with your vendor contact(s), which can be very helpful when the time comes for renewal negotiations.
Incorporating Mid-Term Reviews into the Vendor Contract Renewal Process
If after the mid-term period you are pleased with your vendor and wish to continue your relationship, the renewal process is a great time to discuss discounts and pricing incentives for longer renewal periods, such as two or three-year discounts.
In the event your organization finds issues with your vendor during the mid-term review, such as not complying with SLAs or gaps in their security policy, this would be the time to address these items before moving forward.
It is very important (and good practice) to evaluate your vendor mid-way through your contract term. This allows plenty of time for your organization to make critical decisions regarding product/service offerings and cost, while also ensuring compliance around performance standards.
Use this checklist for what you need for your vendor contract renewals. Download the checklist.