How to improve negotiation and contracting techniques with technology vendors
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www.ibsintelligence.com How to improve contracting and negotiation techniques with technology vendors Wednesday 25 th April, 2012
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It is in every bank's (and vendor's) best interest to negotiate and agree the best banking system contract possible, and to maintain continuous financial and operational significance for all key stakeholders involved, with clearly communicated actions, updates and objectives.This free webinar from IBS Intelligence delivers a valuable introduction to the issues involved and possible approaches when negotiating and contracting with technology vendors. Using practical examples of the problems a bank may face, the webinar also offers insights into potential solutions and highlights common misconceptions and issues to be aware of.Webinar Agenda: Introduction Problems: Setting the scene a. Example situations b. Pain points c. Implications Possible Approaches a. Hope… b. Tie the vendor down c. Push the vendor’s terms until they refuse d. Link the contract to business (and other bank) objectives Issues to be aware of a. Common misconceptions Conclusion and Q&A.
Transcript of How to improve negotiation and contracting techniques with technology vendors
www.ibsintelligence.com
How to improve contracting and negotiation techniques with technology vendors
How to improve contracting and negotiation techniques with technology vendors
Wednesday 25th April, 2012Wednesday 25th April, 2012
IntroductionIntroduction
Contracts are too often: an after-thought detached from the overall selection process too rigid and generic.
What is the smarter approach? IBS Intelligence:
The specialists in core banking systems (publications, research and consulting); independent; 20+ years
Negotius: Co-founders have 45 years of vendor sales experience Modern semantic knowledge management tools Results can be updated and maintained Patented consulting process
Contracts are too often: an after-thought detached from the overall selection process too rigid and generic.
What is the smarter approach? IBS Intelligence:
The specialists in core banking systems (publications, research and consulting); independent; 20+ years
Negotius: Co-founders have 45 years of vendor sales experience Modern semantic knowledge management tools Results can be updated and maintained Patented consulting process
Webinar Agenda:Webinar Agenda:
Example situation to illustrate the challenges
Negotiating approaches
A better approach
Common misconceptions
Example situation to illustrate the challenges
Negotiating approaches
A better approach
Common misconceptions
Example - the situationExample - the situation
A bank has started a selection process for a new core system
RFx, Vendor Workshops, Vendor Selection all complete
Preferred and Second Choice Vendors informed
Legal counsel engaged
Contracts being negotiated
A bank has started a selection process for a new core system
RFx, Vendor Workshops, Vendor Selection all complete
Preferred and Second Choice Vendors informed
Legal counsel engaged
Contracts being negotiated
Example - the worryExample - the worry
Will the vendor deliver on time? They have missed deliveries with other banks Missed deliveries would compromise the selection
business case Can the project plan be delivered?
Will the vendor deliver on time? They have missed deliveries with other banks Missed deliveries would compromise the selection
business case Can the project plan be delivered?
Example - the worryExample - the worry
Regulatory news.... Rumours and discussions about upcoming credit risk
capital allocations changes These will change the scope of data required from the
core system But... the scope of data change is unknown So... the existence or size of the gap is unknown
Regulatory news.... Rumours and discussions about upcoming credit risk
capital allocations changes These will change the scope of data required from the
core system But... the scope of data change is unknown So... the existence or size of the gap is unknown
Example - how it might happenExample - how it might happen
Project team being established Focused on precise delivery of contract: time, budget,
scope “Failure is not an option”
Contracts Contracts will be tight - no room for manoeuvre (by any
party) - aimed to reduce risk
but.... How are these activities linked to the original business case? To the trade-offs and compromises discussed in the selection
process? How can the bank allow for changed goals and rules in the
implementation?
Project team being established Focused on precise delivery of contract: time, budget,
scope “Failure is not an option”
Contracts Contracts will be tight - no room for manoeuvre (by any
party) - aimed to reduce risk
but.... How are these activities linked to the original business case? To the trade-offs and compromises discussed in the selection
process? How can the bank allow for changed goals and rules in the
implementation?
What is the Answer?What is the Answer? Hope
Maybe nothing unexpected will happen for the next three years
... regulators, competitors, market, vendor, technology etc
Tie down the Vendor Fix what the vendor must deliver Any failure to deliver becomes a potential contract breach Firm penalty clauses No room for manoeuvre
Push the Vendor until they squeal Push the price until the vendor threatens to withdraw Add strict SLAs Leave “spare” budget internally to allow for overruns
Hope Maybe nothing unexpected will happen for the next three
years ... regulators, competitors, market, vendor, technology etc
Tie down the Vendor Fix what the vendor must deliver Any failure to deliver becomes a potential contract breach Firm penalty clauses No room for manoeuvre
Push the Vendor until they squeal Push the price until the vendor threatens to withdraw Add strict SLAs Leave “spare” budget internally to allow for overruns
What is the Better Answer?What is the Better Answer? Good Legal Contract, Good Business Contract
Contracts produce commercial outcomes Legal Outcomes Business Outcomes
Focus on what is needed... ... create a mechanism for what might change
Everything is about the business case Market Profit Cost Regulation more...
Link the contract terms and performance to the business objectives
Good Legal Contract, Good Business Contract Contracts produce commercial outcomes
Legal Outcomes Business Outcomes
Focus on what is needed... ... create a mechanism for what might change
Everything is about the business case Market Profit Cost Regulation more...
Link the contract terms and performance to the business objectives
Understand it HolisticallyUnderstand it Holistically
BusinessObjective
VendorResponse
ContractNegotiation
ImplementContract
SignContract
Enter NewMarket
CRMChannelsProduct Factory
ScopeSequenceRolesCommercial
ScopeRolesOwnershipLiability
ScorecardsChange ControlSuccess Criteria
End to End
Common MisconceptionsCommon Misconceptions
Contracts.... just for the lawyers, right?
Well, I’ve signed the contracts now, so I don’t need to look at them again....
I’ve got all my contracts in a document management system, it all seems to be going fine, so why should I do anything?
Contracts.... just for the lawyers, right?
Well, I’ve signed the contracts now, so I don’t need to look at them again....
I’ve got all my contracts in a document management system, it all seems to be going fine, so why should I do anything?
SummarySummary Contracts define how a bank interacts with its IT vendors
on an ongoing basis - they are business documents Contracts are borne out of a series of complex
interactions between banks and vendors - the context carries the meaning
Contracts should reflect the business needs of the bank Contracts should have flexibility built in so that they can
be used to respond to changing circumstances.
A recording of this webinar will be made available to you shortly for your reference. Please also consider our in-depth and flexibly delivered training course.
Contracts define how a bank interacts with its IT vendors on an ongoing basis - they are business documents
Contracts are borne out of a series of complex interactions between banks and vendors - the context carries the meaning
Contracts should reflect the business needs of the bank Contracts should have flexibility built in so that they can
be used to respond to changing circumstances.
A recording of this webinar will be made available to you shortly for your reference. Please also consider our in-depth and flexibly delivered training course.
NEW TRAINING COURSE:Take your knowledge a step further – fully flexible, contact us to discuss your requirements
NEW TRAINING COURSE:Take your knowledge a step further – fully flexible, contact us to discuss your requirements
This free webinar provided an overview of the topic. The new training course from IBS Intelligence and Negotius provides in-depth assistance and guidance
For more information and to take your knowledge further, please call us on +44(0) 1303 262 636 or email Jon Raeside at [email protected]
This free webinar provided an overview of the topic. The new training course from IBS Intelligence and Negotius provides in-depth assistance and guidance
For more information and to take your knowledge further, please call us on +44(0) 1303 262 636 or email Jon Raeside at [email protected]
Contact us
+44(0)1303 262 636
www.ibsintelligence.com
Contact us
+44(0)1303 262 636
www.ibsintelligence.com
System selection (core and all other areas of banking)
Contract negotiations Project planning services System and process reviews Shari'ah compliance Market analysis Marketing strategy Bespoke market research and
surveys
System selection (core and all other areas of banking)
Contract negotiations Project planning services System and process reviews Shari'ah compliance Market analysis Marketing strategy Bespoke market research and
surveys
