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?