The question makes sense for the mega-vendors that you cannot bypass.And it’s about what works and what does not. The least what you should be asking for is a certain governance that establishes a framework that you can publish in your organization. To define the content, you need to check the following aspects:
- Try to assess your leverage by determining your options to either postpone closing the deal now, to reducingthe scope or to procure the project requirement via competition. Communication leaks can reduce theleverage.
- Make a self-assured impression with respect to your knowledge of the marketplace, but do not provide informationabout details. When you establish uncertainty about your course of decision, you increase your leverage.
- If the net contract value is the baseline for support fees, point to the long-term effect of insufficient discounts.At the same time, protect important terms that allow for a flexible use or re-configuration of yourlicense estate.
- Always remain credible and do not get lost in details. It is easier to call for the right principles (e.g. payingthe region- and industry-wise net price or avoiding unreasonable true-ups for support services) which allowyou to justify a strategic relationship with the vendor.
- Demonstrate that you are under no time pressure. Make it clear that your company can reach targets withoutmaking the software investment at this point in time. Use a potential delay to the next quarter as a threat toshift the pressure to your negotiation partner.
- Unexpectedly, start questioning a clause in the framework agreement, such as the rights to transfer softwareto other entities. Show that you are following and understanding other vendors’ legal battles andcreate a philosophical debate about the legality of some of the restrictions. Ask for the complete documentationof your license entitlements and how you can get such information seamlessly.
- Check out the marketing interest of your vendor and how he views your organization in terms of a lighthouseor thought leadership. Drop names of other thought leaders to create the notion that satisfying yourneeds will have a positive impact and vice versa.
- Talk about TCO (total cost of ownership) and ask for a flexible operational model. Many young and ambitiouscompetitors offer easier implementations such as cloud-based, are being considered.
- Bring downgrades of support fees into play. Consider discussions on third party or industry collectives if youhave proper contacts. Or, simply postpone the negotiations for that reason.
- If appropriate start talking about re-organizations affecting the project that owns the requirements. Thatway, you increase the time pressure for closing on your partner’s end.
- Review the underlying root agreement for your orders. This allows you to identify areas of risk, like countryapplicabilityor audit terms, that you can address and fix when signing a new order. A discussion about suchprincipal terms and how to change them increase the time pressure on your counterpart.
- Consider this list of issues as not complete and map individual company issues to the above, to give themauthenticity. Also, include internal stake holders in the framework of your negotiation tactics and get theirendorsement prior to approaching the vendor.
Further references are given by these definitions in SearchCIO: vendor management office .