You’re about to negotiate with a vendor. What are the risks of using new technology?

As a foundation, what are you negotiating? Price negotiations are premature if you have yet to confirm that the technology meets all your critical requirements and that the vendor has fully covered their approach to licensing, support, implementation, and third-party integrations. Involving critical stakeholders early in the vetting process must happen. @Erik Crespolini said it well. Bringing procurement, infosec, and legal into the mix post-selection will likely push the project back because essential issues still need to be addressed. The risk of new tech is that it does not do what the vendor promised because you did not have everyone at the table to ask the right questions.

Hopefully, before you get to this question, you're communicating! In this case with the IT group first for tech compatibility. Survey your clients for "nice to haves" and "must haves" in functionality and then ensure the vendor and tech meet the criteria. Research their competitors thoroughly so that you're prepared with the right questions during the demo and ensure you know the problems you need to solve. Gartner (G2.com) has great information as you're researching the technology you need to solve your problem and the challenges that might come. Always pick a vendor that has some reviews, ask for references, and call them! Finally, do financial due diligence. A company that's out of business won't meet your needs.

These should be questions tackled during the above due diligence and then the answer documented in the contract with service level agreements (SLA), key performance indicators (KPI) and a demonstrated maintenance program. SLAs should cover both the uptime of your cloud system (you want 99.9 percent and payments or rebates for downtime, website or anything applicable, page loading times, and support times for fixing level 1 (vital), 2 (moderate) and 3(less important) errors. Be SURE the definition of error is clear and applicable to your needs.

Work with someone who negotiates pricing and uses price benchmarks to know if your quote is too high. You should always politely ask for a discount - it can never hurt and often saves a lot. Timing your deal is vital - when possible plan your purchases or renewals around the vendor's year-end and revenue recognition needs. Salespersons and companies are VERY motivated at these times and will almost always give on both the legal terms and pricing discounts to report more revenue to shareholders. With a procurement professional about the best ways to structure the licenses (by seat, by facility, by revenue, etc.), payment terms (yes ask for net 120!) and term of the purchase (get 1,2,5 yr quotes and compare them.

Anytime you establish a new vendor you open yourself to additional counter-party risk. Not doing due diligence from both a legal and infosec perspective up-front will cost you in the long run.

Internal buy-in from various stakeholders from legal, IT, contracts, and possibly other parts of the business prior to purchase. Ensuring alignment with company business objectives and setting clear objectives for success and value realization. And of course making sure the vendor has a well-thought out onboarding, migration, implementation, and training plan.

Apart from technicality and data security issues, couple of major risks which I see as Integration challenges and cost overrun. New technology may not seamlessly integrate with existing systems or processes, leading to compatibility issues and increased complexity. Implementing new technology can be expensive, and costs may exceed budgeted amounts due to unforeseen challenges or requirements. To mitigate the risks, it is very important to have the contingency plans in place in case of technical issues.