SW Negotiation JUJITSU

Elgin WardICN Trainer

Disclaimer

The recommendations discussed in this Class are not intended to be and do not constitute legal advice. Before making any changes to your documents, methodologies, or practices, CAUCUS and ICN strongly recommend that you consult with your attorneys and other professionals.

Topics

Introductions

Part-1: Fully armored Samurai

Part-2: Account Control Process

Part-3: SW negotiation Jujitsu

Do’s and Don’ts of SW negotiation Jujitsu

Part – 1: The fully armored Samurai

Amazing Technology

Major WOW factor

Software

• Pricing programs

• Contact center

• Development tools

• Robotics

• Many other functionalities

Amazing Technology

Cloud Services

• SaaS

• PaaS

• IaaS

• XaaS

Big Data

Internet of Things (IoT)

Sticky Products

Very addictive

Unique and, hence, irreplaceable

Converting data

Try it, you’ll like it!

• Mutiny at the Pentagon

• The magic scanning box

• New angle – free Open Source software

Powerful IP Protection

Intellectual Property laws

• Copyright

• Patent

• Trade Secrets

• Trademarks

Powerful IP Protection

Author/vendor owns ALL rights including DERIVATIVE works

Customer owns NOTHING . . . unless . . . expressly stated:

• Work made for hire

• Assignment of rights

• License to use

Licenses & i-Limits

Licensing of IP

• Powerful tool

• Vendors don’t sell IP but retain ownership

Absolute control of usage

• Time

• Geography

• Types of usage

• For example, production, maintenance, DR, . . .

Licenses & i-Limits

Invisible LIMITS (“i-Limits”)

• Included in EVERY grant

• What licensee CAN do (visible)

AND,

• What licensee CANNOT do (often invisible)

Licenses & i-Limits

Examples of grants & i-Limits,

• Right to use on Tuesday means NO use Wednesday through Monday

• Right to use in the USA means NO use anywhere outside the US

• Right to use for accounting does NOT include use for advertising, maintenance, DR, . . .

Training in Sales

Initial training can be 1 year

Ongoing training – 1 week per quarter

Content of training?

• Products and services

• Sales psychology

• Selling to large organizations

Expense Accounts

For what activities do Sales Reps use their Expense Accounts?

How big is a Sales Rep’s Expense Account?

On whom do Sales Reps spend their Expense Accounts?

Team Approach

Do Sales Reps work alone?

Who else might be on the sales team?

• The trusted consultant

• The equipment repairmen

• The ambitious spouse

• The Sales Manager

Part – 2: Account Control Process

First Thrust - Contacts

Contacts = control

How important are Contacts to Sales Reps?

• No Contact

• No relationship of Trust

• No sales

First Thrust - Contacts

What kinds of Contacts are there?

• Information sources

• Champions

• Decision Makers

Examples: receptionist, user, CIO, . . .

Preferences?

• Selling to VITO

Second Thrust - Trust

Controlling with Trust

What is the need and power of Trust?

How can a Sales Rep build Trust?

• Questions and answers

• A promise made, a promise kept

• Not paid a cent

When and where does Trust give the Sales Rep negotiation leverage?

Third Thrust – Narrow Problem definitions

Defining the Problem = control

In defining Problems and needs, what is the focus of the Sales Rep?

• Technical Problems to be solved, needs to be met

• Performance Speed

• Innovative, industry leading

• Price

Third Thrust – Narrow Problems definitions

What does the Sales Rep often skip?

• What if scenarios . . .

Product doesn’t perform as promised

Product stops working after 6 months

Third party claim stops use of Product

• Warranties (Requirements, IP rights, . . .)

• Remedies

• i-Limits Vendor Documentation vs Customer

Requirements

Fourth Thrust – Compelling Solution

Defining the Solution = control

What is “Funneling”?

How is Funneling achieved?

What leverage does Funneling give?

Fifth Thrust – Consensus of Decision Makers

DM consensus = control Who makes the BUY decision? Why the Sales Rep wants to discover

each Decision Maker Diverse motivations of Decision Makers• User

• Business manager

• IT manager

• CFO

• CEO

Sixth Thrust – Vendor Contract documents

Vendor Contract = control

Vendor vs Customer K terms

How a Sales Rep ensures the Vendor Contract documents are used

• Timing Procurement’s involvement

• Timing Vendor response to Contract docs

• Timing negotiations

Story: 7 weeks of pain

Seventh Thrust –Dazzling Implementation

Implementation phase = control

WOW the Customer Stakeholders

Spreading the sticky Product

Implementation is a networking bonanza

Increasing Contacts

Preparing for cross-selling and upselling

Eighth Thrust – Recommend additional Buys

Review & recommend = control

Vendor recommendations

• What has gone well (WOW factors)

• How can Vendor better help Customer?

Same Product to Customer’s other divisions

Other Products and Services

Part – 3:SW negotiation Jujitsu

Jujitsu is a Japanese martial art and a method of close combat for defeating an armed and armored opponent in which one uses no weapon or only a short weapon.

Proactive Countermoves

Where the Wind blows

Trusted helper

Awareness of all Problems and Needs

CYA Solutions

Strategic Decision Making

Customer Contract documents

Rolling Estoppel

Hansei

First countermove –Where the Wind blows

We must own the trees in our forest

How can we know when the Wind blows?

• Who notes the blowing of the Wind?

How can we learn the direction our trees are leaning?

• Strategically meet with Stakeholders

• Attend Stakeholder planning meetings

First countermove –Where the Wind blows

How can we learn the direction our trees are leaning? (cont’d)

• Get copy of Stakeholders’ roadmaps

• Analyze Stakeholder yearly and multi-yearly budgets

• Take Customer IT management to lunch

• Monitor for SW Demos and debrief attendees

Second Countermove – Trusted helper

Discover your Stakeholders’ WIIFM

Speak WIIFM-ese to your Stakeholders

Learn how to help your Stakeholders

• Information needed? For example:

IP analysis of existing SW portfolio (can/can’t do)

Financial viability/problems of key SW vendors

Roadmap direction of other Divisions of company

Valuable internal company news

Analysis and report on SW portfolio spend (SW licenses, maintenance, Cloud services, . . .)

Stories on success/problems in SW negotiations

Second Countermove – Trusted helper

Learn how to help your Stakeholders (cont’d)

• Administrative work needed? For example:

Filling out forms

Get internal approvals

Get documents signed

Do other needed leg work

Second Countermove – Trusted helper

Learn what your Stakeholders dislike about Procurement

Address and resolve the dislikes

Be a resource your Stakeholders find meaningful and helpful

Third Countermove –Full awareness of Problems

What is the purpose of identifying Problems and needs?

Discover lifecycle and roadmap for Problems and needs

Develop detailed requirements

• Technical

• Operational

Third Countermove –Full awareness of Problems

Develop detailed requirements (cont’d)

• Service Level requirements

• IP requirements

License grants needed

Maintenance rights needed

Pricing structure needed

i-Limits analyzed

Third Countermove –Full awareness of Problems

Develop detailed requirements (cont’d)

• Warranties (standard) Title

Quiet enjoyment

Against IP infringement

Compliance with all Customer performance specifications

• Warranties – others as needed (performance, design, integration, compatibility, configuration, . . .)

• Remedy requirements

Fourth Countermove –CYA Solutions

In acquiring a Solution, goal one is to prevent Funneling by Vendor

Goal two: discover and explore ALTERNATIVE solutions

• Stakeholder-preferred SW Vendor

• Alternative SW Vendors

• Cloud Service Providers

• Do-it-yourself approach

• Delay the project

Fifth Countermove –Strategic Decision Making

Who knows the Customer Decision Makers best?

What criteria should the Decision Makers consider?

• Tactical criteria

Immediate in time

Requestor’s issues ONLY

Fifth Countermove –Strategic Decision Making

What criteria should the Decision Makers consider? (cont’d)

• Strategic criteria

Longer term

Companywide

• Tactical vs Strategic - the difference?

Sixth Countermove –Customer Contract documents

Keys to ensure a Customer contract is used

• Sourcing owns the trees in its forest

• Timing – Sourcing engages as soon as the Wind blows in the trees

• Procurement helps define the Problems/Needs including detailed requirements for Performance, IP rights, Remedies for What-if scenarios, . . .

Sixth Countermove –Customer Contract documents

Keys to ensure a Customer contract is used (cont’d)

• Procurement interviews each Vendor Contact and makes notes on what the Vendor promised

• Vendor reps and promises are added to license grant of Contract as appropriate

• Procurement ensures each Decision Maker has considered each possible Alternative solution

Seventh Countermove –Rolling Estoppel

Implementation accountability from Vendor

Estoppel process

• Meetings

• Ask questions

• Write down answers verbatim

• Publish

Seventh Countermove –Rolling Estoppel

What questions are to be asked?

• Scope changes

• Customer obligations

• Adverse third party involvement

• Timing issues

• Budget issues

• Cross-selling or upselling

• Customer personnel spoken with

Eighth Countermove –Hansei

Eighth Countermove –Hansei

Hansei is Japanese for “reflection.” It signifies a practice, both business and cultural, requiring a team or individual to deeply and soberly reflect on a completed act or project to learn as much as possible from it.

Eighth Countermove –Hansei

What Hansei is not

• A celebration and champagne toasts for successful completion

• A wake and mourning for failures

• An immediate decision to buy more

Eighth Countermove –Hansei

Elements of Hansei

• Final vs original time

• Final vs original budget

• Final vs original requirements

• Customer obligations performance

• Vendor promised performance

• If different, why for each element

• Use Hansei to help Procurement and Stakeholders grow closer together

To improve future SW acquisition projects

Do’s and Don’ts

Don’ts

Don’t ignore the Wind

Don’t make promises you can’t keep

Don’t neglect your Promises

Don’t let Vendors define Customer SW needs without Procurement help

Don’t let a Vendor funnel your Decision Makers

Do’s and Don’ts

Don’ts (cont’d)

Don’t allow tactical Decision Making

Don’t use Vendor Contract documents

Don’t allow Implementation to be a networking bonanza

Don’t let a Vendor use Implementation to expand Contacts and prepare for cross-selling and upselling

Don’t allow project review to be a sales platform

Do’s and Don’ts

Do’s

Do own the trees in your forest

Cultivate relationships with your strategic Stakeholders

Proactively monitor your Stakeholders’ Vendor involvements

Learn from your Stakeholders what they are told by the Vendor

Do’s and Don’ts

Do’s (cont’d)

Make promises to create hope & keep your promises to create Trust

Intentionally exceed Stakeholder expectations

Help your Stakeholders define fully problems and needs including as well IP rights, and remedies

Ensure your Stakeholders consider their Alternatives before selecting a Solution

Do’s and Don’ts

Do’s (cont’d)

Ensure all Customer Decision Makers engage

Ensure Decision Makers consider the STRATEGIC not just tactical view

Use Customer Contract documents, or negotiate needed Customer terms into Vendor Contract

Do’s and Don’ts

Do’s (cont’d)

Use Rolling Estoppel to ensure Implementation is not a networking bonanza for cross-selling or upselling

Use Hansei to evaluate and learn from the completed project

Pause before the next “buy”

Consider the next “buy” a separate transaction needing the full application of SW negotiation Jujitsu.

Diligent practice and mastery of proactive countermoves will improve Customer success in controlling its software procurement process!

終わり

Questions?