Run these 3 exercises: 1. Review your existing rates, your suppliers proposed rate hike, and benchmark rates from either an advisory firm or a publication. 2. Ask the supplier for the reasons for the change. If it is due to promotions or salary hikes, check your contract to see who is responsible for those changes. If your scope can handle resource swaps, allow the supplier to make a phased resource swap which allows them to maintain their required margins and for you to keep your costs flat. 3. Tender the service to the market by either getting 3 or more informal quotes from similar suppliers or a formal RFP if your scope is large enough. Compare prices but also ensure you are comparing apples to apples to form informed business decisions.

When facing a budget risk due to a vendor's price hike, it's essential to navigate the situation strategically. Begin by reviewing the contract to understand your options and any clauses related to price changes. Open a dialogue with the vendor to negotiate more favorable terms or explore alternative payment plans that might ease the immediate financial strain. If negotiations don't yield the desired results, consider sourcing alternative vendors who can offer competitive rates and meet your quality standards. Also, reassess your budget allocations to identify areas where costs can be reduced to accommodate the increased expenses. This approach can help you manage the situation proactively while maintaining operational efficiency.

In this case first of all, I’ll start to assess the exact impact of the price hike on the overall budget, identifying which parts of the project or campaign are most affected by the increase Next step, it’s important to see if there’s a room for negotiation with the vendor. Perhaps he can offer a discount, extend terms, or lock in the previous rate for a portion of the services/ products After negotiating and exploring alternatives, I recommend, if possible, to implement the project in phases, prioritizing the most critical components first, and maybe postponing non-critical elements. This could spread the cost over a longer period, making the price hike more manageable Also, if applicable, it’s a good option to look for external funds

Stage 1 : Impact assessment Negotiation : Talk to the vendor, a clear background understanding of the cause would help to have sharp negotiation. Take the chair of a solution provider, keep in mind that we have to solve this with in boundary derived from stage 1. Limit the spend : Figure out areas where we can limit the expenses with out quality compromise. Streamline Cash-flow : Check the possibility of credit/credit extension Explore Options : Keep alternative options handy.

When a supplier raises its prices, it's a good idea to let them know that it's no longer affordable. The best thing to do is to negotiate with them to reduce their services and refocus on what's really important. I suggest meeting other suppliers in parallel with these discussions to compare prices and services.