Challenge    Solution    Success Story

Challenge

For many companies, Vendor Selection & Negotiation are both challenging and critical for four reasons:

      Contract negotiators, if they exist, lack sufficient expertise in the area they are negotiating.

      Business and technology leaders lack sufficient expertise in the art of negotiation.

      Companies lack sufficient expertise about industries and vendors.

      Companies lack a methodology for effective Vendor Selection & Negotiation.

Acquiring and maintaining this expertise is an expensive and inefficient use of resources for most companies, and is particularly acute for multi-year contracts where the expertise is only useful every 2 to 10 years when a contract is due for renewal.

Solution

Through our Vendor Selection & Negotiation service, we partner with our clients to successfully evaluate products and services, and negotiate contracts.  Our record of accomplishment is based on over 18 years of experience in all three roles in the selection and negotiation processes:

      Corporate customer

      Vendor / service provider

      Consultant / trusted advisor

In these roles we have developed extensive expertise in all of the key components of the selection and negotiation processes:

      Technology

      Negotiation 

      Vendors

      Industries

      Legal Counsel

      Purchasing

      Finance

Success Story

Challenge

A multi-billion dollar software company was approached by one of its large Unix hardware vendors with an unusual hardware and services proposal.  The software company had already started planning for the replacement of hardware at the end of its lease, six months in the future.  The vendor offered a complex proposal that included replacing the equipment 4 months earlier than the company planned and utilizing the vendor's lease financing.  As incentives, the vendor offered significant discounts on lease financing, maintenance, and professional services.

Solution

These key steps were utilized to successfully evaluate the vendor's proposal, negotiate better terms and conditions, reduce costs, and implement the resulting contract:

      Analyzed the vendor's motivations: fiscal year-end, sales incentives, competitive position

      Finance and Purchasing departments evaluated and negotiated lease financing terms

      Internal and external legal counsel evaluated and negotiated legal terms

      Internal and external technologists reduced costs using a technology consolidation strategy

The resulting contract allowed the company to:

      Reduce implementation time by 60% and utilize 75% fewer implementation resources

      Reduce non-recurring costs by $2.1 million and annual recurring costs by $350,000

      Improve system performance by 40%

      Improve system manageability by 35%