EnterpriseMay 2007

If You Don’t Ask…….

Tom ScottUniversity of Wisconsin - Madison

Educause EnterpriseMay 24, 2007

Chicago, IL

Copyright [Thomas J Scott, 2007]. This work is the intellectual property of the author. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright statement appears on the reproduced materials and notice is given that the copying is by permission of the author. To disseminate otherwise or to republish requires written permission from the author.

EnterpriseMay 2007

• Getting Vendors to Understand• Managing the Relationship• Negotiating• Competition• Long Term View

– Key Success Factors

• What if Things Go South• Market Consolidation• A Handy Graphical Analysis Tool

EnterpriseMay 2007

Time

EnterpriseMay 2007

Buyer’s View of Acquiring Something

Problem/Opportunity Identification Ideas

Vetting Guesses on cost/timeline

Vendor contacts RFP/RFB only if necessary Return/Review/Assess (Is there an existing relationship?)

New vendors show up New ideas from new vendors

Re-assess/EvaluateMake a choice

Negotiate/Contract ENJOY

EnterpriseMay 2007

Seller’s View of Acquiring Something

If relationship exists -> probably knows of opportunity Wants in Starts being part of needs assessment/solution Figures out who the competition is

Figures out most likely way to “win” this business

Probably starts “selling” solution right away If possible wants to avoid the bid If not, then wants to help “frame” the bid If the bid hits the street

Not all vendors will bid Bidding is expensive The more complicated the bid the higher the cost of responding and those costs are going to be covered somewhere

EnterpriseMay 2007

Getting Vendors to Understand & Listen

1. What’s your value to this vendor?

2. Is this vendor committed to HE?

3. Is there an active and independent UG?

EnterpriseMay 2007

”Discovery - A term that gets overused but I think is very important from both perspectives. It only makes sense that the more you know of me and my company and the more I know of you the better our chances of meeting expectations and arriving at a mutually satisfying solution.”

Manuel “Buddy” Ramos, Ciber

EnterpriseMay 2007

Managing the Relationship

1. Know the entire chain you’re dealing with

(Silos report up but they come together somewhere)

2. Do you have an executive relationship established? - Use it or lose it

3. Define the relationship YOU wantHigh competitive - Small # big vendors - Big # small vendors

4. Is there an institutional history w/this vendor?

5. “Chips” - Know how to accumulate, how to spend ‘em

EnterpriseMay 2007

“Work at the relationship. This isn’t like buying a car where you have no involvement with sales after the contract is signed. Your ability to establish a working relationship will dictate the responsiveness of most vendors”

Stan Jakubik, AVC University of Maryland System

EnterpriseMay 2007

“Chips - You agree to sponsor site visits. Maybe you’ll do interviews, deliver a paper at their conference…… For their part the vendor helps resolve problems faster than they might otherwise or maybe they provide free consulting……..”

Bridget Haggerty, Acting CIO, Oregon Health & Science

EnterpriseMay 2007

Negotiating

1. Everything is negotiable2. Look for Mutual “Wins”3. Know the quantities of products/services you own now and will own from this vendor4. Centralize all activity you can identify

(products/services/maintenance)5. Get control over EVERY purchase from this

vendor6. Consolidate previous business - Try for

coterminous on everything

EnterpriseMay 2007

Negotiating

7. Academic calendar doesn’t align well with business calendar

8. Who will actually negotiate – what’s their goalLeast cost - Least TCO - Business direction & future

readiness

9. Leverage the vendor’s silose.g., Tech, Apps, Training

10.Don’t forget training11.Pricing metrics

FTE’s, Students, CPUs, Continuing Ed, Gross Budget – Think in FUTURES

12.You Have Promotion value

EnterpriseMay 2007

“Because educational entities are often attached to their own cycles, they often have difficulty capturing some of the fire sale prices available in these times of opportunity. ”

Mick Holsclaw, CIO - Los Rios Community College District

EnterpriseMay 2007

Competition – Understanding/Taking

Advantage1.Price2.Quality3.Leverage4.Relationship5.Image (theirs and yours)6.Consortium opportunity7.“Throw ins”8.Bids are expensive

Can it be avoided

1.If this vendor, then who of your peers contracts w/them?(caution: If you bought your car, do you like that car?)

EnterpriseMay 2007

Long Term View - Key Success Factors

Mutual trust & respect

Mutual Need

Shared Direction

Culture Match

EnterpriseMay 2007

” From my experience, building strong business relationships is the key critical success factor for both institutions and vendors.  At the end of the day, buying and selling happens between "people," not between organizations.  People buy from people they know, trust, and like.  Similarly, people find it easier to sell to people they know, trust, and like.”

Paul Stieman, Oracle

EnterpriseMay 2007

What if Things go South

1. Define the risks

2. Assess those risks

3. It could be you, you know

4. Sue a vendor – get serious

EnterpriseMay 2007

Market Consolidation

It happens - Have a plan

EnterpriseMay 2007

Time

TimeTo goBackTo work!

EnterpriseMay 2007

EnterpriseMay 2007

Time

EnterpriseMay 2007

Thank You