IT and procurement departments have to deal with “strategic” negotiations every year. A negotiation is said to be strategic when it meets several characteristics, including high financial stakes, dependence on the solutions of the publisher, an imbalance of power, the absence of alternatives, and an asymmetry of information.
Negotiating is not a role but a profession
Negotiating and managing long-term relationships with publishers and cloud providers requires skills and expertise to keep pace with technological innovations and commercial pressure from suppliers.
Issues & strategic negotiation
Definition of needs
The negotiator needs to have a precise vision of the real ways in which the company uses the products covered by the contract. Are your IT teams able to provide you with precise data on the usage of licenses and subscriptions, as well as their future needs?
Definition of a financial target
Before any negotiation, it is imperative to have a reasonable financial target in mind. Do you have a good view of market prices in relation to the type and volume of the products covered by the contract you wish to negotiate?
Preparation of alternatives
Before any negotiation, it is necessary to prepare alternatives in the event of disagreement with the publisher or failure to reach the initial target. Have you prepared your "Best Alternative to a Negotiated Agreement" (BATNA)? How many negotiation scenarios have you considered?
Dependence on the publisher
Some technologies are embedded in our information systems, and it would be unthinkable to deprive the company of these technologies. What levers do you have to try to rebalance the negotiation? What arguments will the publisher respond to, despite their strong position?
Our expertise enables us to support organizations throughout the negotiation process, from preparation to contracting with suppliers, by providing added value at each step and by helping our clients to optimise their purchases both financially and technically.
Preparation and situational assessment
Renegotiating a contract first requires taking stock of the existing agreement. Have you deployed the products that you have purchased or subscribed to, are you paying competitive prices, and have the contractual terms enabled you to secure the relationship and the costs while providing sufficient flexibility? The quality of the products and services sold by the publisher must also be assessed at the level of the users, operators, and purchasers.
This first step can last from a few weeks to a few months, depending on the footprint of the supplier in the organization. The report will allow you to have a precise vision of the usage and risks of the products and services to be renewed, and above all to have a formal and objective assessment of your contract and your supplier.
The negotiation strategy includes the objectives of your organization and the different steps to achieve them. Our experts will involve stakeholders in several workstreams to define the components of the strategy: demand plan (need for products and services in the short, medium and long-term), contract, alternative solutions or suppliers, financial (business case for the next 3-6 years), etc. Other aspects not to be overlooked are the timing as well as the roles of each member of the negotiating team.
Elée’s experts support negotiators throughout discussions with the publisher until contract signature, by analysing the proposals received from the publisher and comparing them with other examples, by explaining the advantages and disadvantages of different proposals, by updating the business case, and by preparing arguments and responses to the publisher’s proposals.