Some of the most expensive technology decisions are never actually made. A contract auto-renews, and that is the decision. When does your oldest technology contract end, and who is watching the date?

Engage an independent technology advisor before a decision locks you in, ideally 6 to 12 months before a contract ends, and any time the people who would normally compare options don't have the hours to do it well. Most of the value comes from timing.

Here's a case I keep coming back to. An association bought a VoIP phone system sized for the staff it had at the time. Over the next five years, headcount dropped, and the seats and features they were paying for no longer matched how they worked. When they went looking for a lower-cost service, they found the contract had auto-renewed. The language was in the fine print, and a small IT team rarely has the hours to read every renewal clause. They are now waiting about another year to make the change.

Nothing in that story is a technical failure. It's a calendar and a contract.

Four moments when an independent view pays off

1. 1

   A contract is 6 to 12 months from ending. Many providers don't send a reminder, and when a term runs out, the rate often reverts to a standard price well above the promotional one. Almost every term contract also carries early termination fees, so the end of the term is the cheapest time to change course. Timing matters for another reason. In my experience, a new service takes 45 to 120 days from signature to go-live, and anything that needs construction or engineering can take 6 to 18 months or more. Starting 6 to 9 months out leaves room to compare, negotiate, and install before the old term ends.

2. 2

   The CFO asks every department for savings. The work usually lands on one person on the IT team. They may have 10 approved vendors and time to go deep with two or three, so the analysis is only as deep as the calendar allows. Approved vendor lists are curated by a company's IT, operations, and finance leaders, and they usually grow out of relationships the company already has. Those relationships were almost always formed through a provider's direct sales side. Most advisors, including us, are approved with providers on the wholesale/channel side, which in many cases gives the client more negotiating leverage.

3. 3

   A change will touch a lot of people. Technology that looks cheaper on paper can lose its savings if the people using it every day aren't brought along. Gallup's 2023 survey of U.S. workers found that among employees dealing with disruptive change at work, those who strongly agreed their leaders communicate effectively were about 4.3 times as likely to be engaged. Asking who is affected, and how they feel about what they use today, belongs in the decision before the contract is signed.

4. 4

   Your needs are changing. Headcount shrinks, a second location opens, a merger closes. A contract sized for today can become the wrong fit within a few years, and a rip-and-replace is expensive in money, time, and goodwill. It helps to ask what the business will look like in 3 to 5 years, not only this quarter.

Renew or replace? Price is only part of the answer

A cheaper provider isn't always a cheaper decision. Replacing a service costs time, disruption, and training, and it matters which departments feel it. Sometimes the better move is to negotiate a stronger renewal. A good advisor will tell you that, and will ask who and what would be affected before suggesting a change.

When you probably don't need one

Plenty of companies don't. Here are four situations where I'd tell you to keep doing what you're doing.

• You have an MSP you trust. If a managed service provider already supports your company well, in most cases they are acting as your technology advisor. If it isn't broken, don't fix it.

• You have a vetted approved vendor list and a procurement process. When your CFO and leadership have built that list over the years and checked providers against many data points and a proven track record, trust the people who built it.

• Your IT team has room to plan. If your team keeps up with the daily work and still has time to manage the project backlog ahead of schedule, you're in good shape. A technical consulting firm may help with innovation or R&D, but that is a different need than an advisor.

• Your needs are simple and stable. If you're a tech-savvy owner, the business doesn't depend on complicated technology, the stack is straightforward, and it fits within the time you have to manage it, with the company not growing and everything in place, you don't need an advisor.

Outside those four, an initial conversation with an advisor is usually worth the time. That's where you find out whether a decision is bigger than it looks.

How we work as an independent technology advisor

Not every advisor works the same way, so I can only speak for how we do it. I start every first conversation with two questions: what isn't working, and what is? Knowing what works keeps a fix for one problem from breaking something that was fine.

Then we keep going with a thorough discovery. We want to understand the technical landscape, but also what the business is trying to accomplish over the next five years, what's sitting in the tech backlog, and which operational projects are underway or planned. If the operations leader has specific initiatives, we want to hear those too. Technology touches every part of a business, so we take the wide view first.

With that picture in hand, we research solutions on your behalf, focused on your highest-priority issue. We go as deep as is reasonable and look at many providers, because a wider field gives you the best chance of choosing a solution that works. Often more than one meets your full list of requirements, and then the real comparison begins. Price matters, and so does what happens when something goes wrong. Picture the lowest bidder, where a billing question means an hour on hold, a dial tree, and a dropped call that sends you back to the start. A good comparison weighs that too.

For our clients, we also track contract end dates and ask for a month-to-month addendum when a contract is set to auto-renew, so the decision stays with you.

Where to start

If nothing is pending, keep reading. We'll keep sharing what we see. If something is coming up and nobody is helping you compare it, start with the contract that ends soonest. Find the date, check the renewal language, and put a review on the calendar 6 to 9 months out. If you'd like a second set of eyes, bring us the decision. We're vendor-neutral, approved with more than 600 technology solution providers, and the decision stays with you.

Source: Gallup, Disruptive Change Is Hitting Leaders and Managers Hardest (2024).

Jason Doudt is Co-Founder and CEO of Quantify 360 Solutions, a vendor-neutral technology advisory firm. A U.S. Navy veteran with more than 15 years in technology solutions, he holds an MBA and is pursuing a Doctor of Business Administration. He helps companies right-size their technology, so tech spend stays efficient and sustainable as the business grows.