Effective Negotiation and Contract Management Strategies ... · vendor portfolio’s to include on...

Effective Negotiation and Contract Management Strategies

Presented by: Joanie OlivierNovember 16, 2017

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• Founded in 2003, Iconitel has been providing innovative strategies and solutions supportive to all aspects of Syndicated Content Management (selecting, managing and mitigating and avoiding risk for our customers)

• Iconitel has worked with clients of all sizes across multiple business sectors including but not limited to leaders within the software, energy, pharmaceutical, legal, accounting and consulting fields.

• Iconitel’s consultants have extensive experience managing diverse vendor portfolio’s to include on average 950 vendors across 1800 individual subscription services, with a spend value of $75M.

• YOY our strategies consistently drive 10% in cost savings back to our customers

Company Overview

© This presentation is copyright protected - 2017

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Typical Challenges & Risk Factors

• Spend on Market Data will continue to rise

• Increasing content demand causing inefficiencies in content management processes.

• Market is getting more complex and includes a vast array of specialized/niche content. Making it more challenging to manage or determine all up information providers.

• As the market is growing so is the complexity in licensing models and terms resulting in more exposure supportive to compliance

• Being unprepared during contract negotiations can be costly and can lead to getting “stuck” with a contract that does not achieve business objectives (auto renewals, % increases, active or inactive users, change of circumstances, transferability etc…).

• Online everything – is creating a complex contract environment (online ULA or Docusign contracts emailed directly to end-users)

• Staying on top of every element of every vendor agreement is difficult and time consuming (users, contact information, terms and conditions, pricing, payments, renewal dates, compliance, and more)


• Companies are faced with price increases associated with high impact sources

• How to identify alternative sources (competitive landscape)

• Stakeholder management - selection based on preference vs best in class or cost

• How many active subscriptions do we have supportive to same or alike content

• How many users do we contract for?

• How do we determine user and usage consumption

• Is it really worth the investment?

• Is my price right?

• DOi-comply?

– Licensed terms?

– Financial terms?

4© This presentation is copyright protected - 2017

Typical Challenges & Risk Factors

Traditionally we settled out our differences by waging war, or fighting and shouting until one backs down or by separating and walking away.

Copyrighted to Clipart: Scientific Fundamentalist

Distributed outcome – win/lose – the aggressor triumph.


Two Negotiations Approaches

• Win-win (integrated)

• Win-lose (distributed)


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Portfolio Management and Partnership Criteria

“Negotiation” will become an art of knowing what you want and being prepared to secure the desired outcome.

Where Knowledge is the base ingredient

Enables us to “negotiate” over interests, not positions

Supportive to a Partnership - give and take until the desired outcome is reached


So what does this mean?

Partnership Criteria and Management Strategic Outcome

✓ Ensure the best Vendors, product and services

✓ Ensure a strategic approach to maximize efficiencies and avoid duplicate spend

✓ Ensure Stakeholder buy-in

✓ Ensure transparency and visibility to all steps in the process

✓ Ensure full utilization netting a stronger ROI

✓ Ensure best contractual terms – Flexible and Low Risk


• Step 1: Develop a need assessment document

• Step 2: Conduct Usage Analysis:

• Step 3: Competitive analysis and Price Benchmarking

• Step 4: Contract Review (legal and commercial)

• Step 5: Create the renewal/new source strategy

• Step 6: Implementation Strategy


The Approach

• Step 1: Develop a need assessment document:

• What do you find to be the highest value supportive to Source?

• What is the frequency of Use?

• What would be the business impact if you don’t have access?

• What % of users are indicating that they are receiving value from the source (Vendors)

• What barriers, if any, exists supportive to driving more value (sharing, relevancy, training)

• Step 2: Conduct Usage Analysis:

• Schedule quarterly QBR meetings with Vendors:

➢ Understanding the top research focusses

➢ Understanding user and research behavior

➢ Understanding how content drives business decisions

➢ Typical frequency of use (daily, weekly, monthly, etc.)

➢ Top 5 decisions the content is driving within the company

➢ Top users

➢ Vendors update: What's new or forthcoming

➢ Create SLA to continue to drive value and assign to Vendor Scorecard


The Approach

• Step 3: Competitive analysis and Price Benchmarking

▪ Implement a standard process to execute on a RFRx (Request for Renewal Pricing) 90-120 days prior to renewal, to include:

– Line item pricing

– Price justification for any price increases over existing

– Single and Multi year pricing

– Inventory of Services (IOS) (Identifying open relationships and total spending across the enterprise

• Ask for top 3 competitors and SWOT

• Ask for references


The Approach

• Step 4: Contract Review (legal and commercial)

– MSA Review supportive to:

• Third Party indemnification

• Prevailing language

• Change of Circumstances

• Auto renewal/Cancellation

• Evergreen auto increases (GOOD OR BAD)

• Null and voiding language supportive to Other Vendors

• Payment terms (within x days, penalties, etc.)

• Terms of Use

– SOW/Order Form:

• Future Pricing

• Add-on Pricing

• Capped YOY increases

• Exitability (Exit for convenience vs early termination provisions)

• SLA

– Usage statistics

– QPR (Quarterly Performance Review Meetings)


The Approach

• Step 5: Create the renewal/new source strategy

Spend Analysis (PO system or other)

Product/Price – derived off QBR

✓ Research portfolio

✓ User requirement (fact-check)

✓ Delivery Frequency and method

✓ RFRx

✓ Price Benchmarking

✓ IOS results – What are my consolidation options?

✓ Competitive landscape

Term:

✓ Consider longer term commitments with penalty clause supportive to early termination (difference between proposed and final outcome)

Payment Terms:

✓ Can deeper discounts be negotiated with an upfront payment?

✓ Include language that ensure timely billing of invoice – client will have no obligation to pay any invoice that submits after 180 days…..


The Approach

• Step 6: Implementation Strategy

• We have a flexible negotiation environment

• We know our need, usage behavior and patterns

• We have Vendor alignment

• We have low risk converting the agreement YOY

• We know the competitive landscape

• We have price benchmarking done

• EXECUTE you are well prepared:


The Approach

In Closing

• Negotiate from a confirmed agenda

• If it sounds to good to be true – it most likely is!

• If they say it they should be willing to put it in writing

• Listen as well as talk

• Set clear expectations and deadlines

• Have a confident attitude - Never express anger, frustration, fear or sorrow

REMEMBER: NEGOTIATION IS AN ACTION NOT AN EMOTION


Questions

Thank you for your time

Joanie Olivier

919-949-6043

[email protected]

Email: [email protected] to request a copy of this presentation

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