Evidently, that isn't a sustainable way to do business. And smart CIOs look for everyone's best interests -- even their vendors', says the CIO of a pharma company. He says that he focuses on coming up with alternative options to these discounts that are discussed in a spirit of partnership.

That spirit of support, says industry watchers, is also complementary to the way business is done in India, where relationships count. Many CIOs agree that relationships can sometimes be deal clinchers and so it only follows that when it's time for renegotiations, relationships play an important role. "We stress the importance of the relationship we both enjoy and how it is up to both parties to ensure that it survives," says Suresh Kumar, Director-IT, KPMG.

This, in most cases, sets the stage to open up ironclad contracts. How far you go from there can depend on how sweet you can make a deal. Evidently, the lure of business gets providers to lower pricing. If a CIO can throw in potential business for additional services as a carrot, discounts are easier to come by.

There is, however, a thinly-guised carrot-and-stick strategy at play. CIOs normally start a conversation stating something their providers cannot deny: their budgets are under strain. CIOs will typically indicate how much they want to see as a discount by telling their provider that they know the current market rate for discounts, and what other players in their field are offering. "The implied message is that if they don't consider renegotiating there are others we can go to. Till today, we have been successful in renegotiating," says Kumar.

But a number of CIOs feel that opportunistic tactics like this rarely build long-lasting relationships. Blurring the line between flexibility and arm-twisting, they say, can end badly. "Negotiations can't be conducted at sword point," a CIO observed.