Many organizations enter mega vendors contract negotiations badly prepared and too late on in the process, only to find that their renewal costs have spiralled. This can often be attributed to heavy discounts on licensing subscriptions and cloud services that were once enjoyed having been removed and new list pricing being applied that has often risen beyond indexed inflation. Compliancy issues, rapidly changing demand for new services and an “all-in” approach leaves many organizations facing significant unplanned expenditure and unfavorable commercial terms.
In our experience it is common for organizations to find that their contracts are no longer fit for purpose and do not reflect future business requirements. Increasing licensing complexity, poor alignment of IT and procurement and a lack of clarity around existing entitlements and utilization, as well as future demand significantly reduces the leverage an organization has in negotiations with its mega vendors.
What is now surprising is the negotiation strategy now employed by vendors for cloud services. The dynamics of negotiations have changed from an overly keen sales person trying to force a commitment, to a new breed of negotiators that exhibit a talent for delaying conversations, focusing on the contract expiry and the lack of coverage for your key business applications.
Our approach is made up of two key phases, typically delivered over a 3 to 12 month period depending on the complexity or scale of the engagement. During this engagement period we work in partnership with key IT stakeholders to help them articulate the overall requirement and harmonize it across all their affiliates or groups, to define an optimized (BoM) Bill of Materials and build the Optimal License Solution.
Our global team of industry experts have negotiated some of the largest and most complex mega vendor contracts globally, for a wide variety of clients including domestic and international enterprises, as well as a variety of Public Sector organizations. They have many years experience of working with and for mega vendors, working to proven methodology to deliver specified client outcomes.
We start by understanding the value of your existing assets ‘post contract’ and the dependencies that those assets may have under the vendor’s maintenance programs. In this phase we carry out a rigorous analysis to understand what your organization’s future demand looks like. Core components include…
Only when we have complete clarity from phase 1, can we then create and execute a Strategic Procurement & Negotiation Plan. We then work alongside or on behalf of our clients during vendor negotiations to delivers best in class commercial and contractual terms.
We put you firmly in control of your vendor negotiations. If you’re looking to optimize your licensing and cloud services, gaining the ‘Best in Class’ commercial and contractual terms, then we are here to support you throughout the process. We help bridge the technology gap between what you have now and what your future demand will be for the next 3-5 years.
Our approach is not exclusively focused on a contract negotiation. We start by focusing on what your actual consumption needs are to develop a lean, optimized and detailed Bill of Materials (BOM). We use this granular view of actual needs alongside a sympathetic approach to contract agility to develop a strategic negotiation plan. We will support you throughout your negotiations with vendors to achieve the optimal commercial and contractual outcomes. During this process our team of experts who are typically former vendor negotiators will share targeted Insights to ensure the final Best and Final Offer (BAFO) benchmarks well using our proprietary pricing intelligence benchmarking.
We ensure our clients are…
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