That’s what this guide helps you with. Our licensing optimization experts have compiled their best tactics to ensure you avoid the 5 most costly mistakes when renewing your contract. So you have the best possibility of ensuring an optimal deal.
One of the most common and critical pitfalls we encounter is firms failing to prepare for their contract renewal before the deadline.
If you haven’t developed your investment scenario and negotiation strategy well in advance, you’ll be at an immediate disadvantage when sitting opposite your vendor. They know precisely how to dictate terms, and you’ll find yourself accepting points in the moments before signing without time to question them.
Don’t start on the back foot – smart preparation for a contract negotiation takes time. To avoid a last-minute scramble for data, start compiling a comprehensive overview of your current environment at least 6 months before your contract expires. Consider what products you’re using now, compare this with your short to medium-term plans for the company, and identify what needs to change. From here you can decide your negotiation goals and strategy.
It’s crucial that at the point of contract renewal, you have a crystal-clear overview not only of your current environment, but of your future roadmap too.
If you base the terms of your contract solely on the status quo, you could be investing in products that your vendor is keen to push, but that are ultimately never deployed. You also risk not being prepared for future innovation opportunities by being under-licensed.
Ensure your new contract reflects what you’ll need moving forward. Start by considering your overall business vision for the next 3-5 years. Is your company in a growth phase? Or a decline? Are you planning to merge with or acquire other businesses? Then look in more detail about the impact that will have on new products and the software you’ll need for any digital transformation.
Flexibele voorwaarden; wie houdt er niet van? Dagelijks je abonnementen kunnen opzeggen, afschalen of wijzigen. Voorwaarden waar veel gebruikers van Microsoft-producten ook wel oren naar hebben. Voorwaarden die de Cloud Solution Providers (CSP’s) van Microsoft ook gewoon mogen aanbieden, maar dat leek dus zijn langste tijd gehad te hebben. Leek, want Microsoft ziet op het laatste moment af van een belangrijke wijziging hierin. De precieze oorzaak is niet helemaal duidelijk, maar het heeft er alle schijn van dat diezelfde CSP’s daar iets mee te maken hebben. Ook tegenvallende kwartaalcijfers hebben Microsoft aan het twijfelen gebracht.
From our own experience vendor side, we know how many companies turn up to the negotiating table without the information they need.
Make no mistake, your vendor will know every detail of your contract and will have planned their negotiation strategy meticulously to ensure they hit their revenue targets. They will be able to tell immediately if you are under-prepared, and will use this to their advantage.
Take the time to compile all the information pertaining to your current contract, and understand your existing terms and discounts. Ensure the data is easily accessible at the right time, so you can negotiate with confidence and clarity, knowing you have all the details to discuss the agreement on an equal footing.
Too many companies enter a negotiation phase without having involved internal stakeholders beforehand.
This results in a fragmented attempt at securing the best terms and conditions, without enough consideration for different areas of the business. To negotiate successfully, you need to build an integrated approach.
When developing your negotiation strategy, make sure all internal stakeholder interests are aligned ahead of time. Consult with representatives from IT, procurement and legal to understand their goals and priorities, and how they affect the firm’s software requirements. This gives you the strongest chance of agreeing a contract that works across all levels.
Having an optimal contract in mind that reflects your products, quantities and timeframes – all at the right price – is a key part of your preparation.
But so is making sure that goal is realistic. Only preparing for one scenario could lead to a frustrating and unsatisfactory negotiation phase, particularly if the terms you’re seeking are unheard of in your industry.
Before your renewal, look at the financial and technological implications of each licensing option, and consider 2 or 3 alternative outcomes. Decide the point at which you’ll accept each option, and the terms you’d be prepared to relax. A benchmark analysis of similar companies will also give you a valuable insight into the terms or discounts you can expect.
When you’re fully prepared for your contract negotiation, you can engage equally in the process and accurately benchmark any proposal you receive. You can feel confident that you have the necessary software to support your future innovation, and are not investing in products that will ultimately be redundant.
If you’d like to ask any questions about the contract renewal process, our team of independent experts live this world every day. Our licensing optimization program has helped hundreds of large enterprises and government organizations across Europe to cut through the confusion and secure optimal terms with the biggest software vendors.
Independent, expert advice combined with state of the art technology to streamline your licensing structure and save you money when you’re renewing your contract. We negotiate the best contracts with the biggest software vendors on your behalf.
Costs down. Comliance up.