Streamline your vendor negotiations with sales process automation software in Vendor negotiations

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hello world wide web of digital transformation and erp excellence my name is brian potts chief operating officer with third stage consulting group today we're going to be talking about negotiating with your software vendor [Music] we've done a lot of publishing blogs and videos on general tactics for negotiations but today we're going to take a step back and talk about what you should do to prepare for negotiating before you actually go to your vendor request quotes start that process what do you need to do to make sure that you actually do end up with the best proposal and quote from your software [Music] vendor so the first thing i want to talk about is having an understanding clarifying what it is that you actually need and where i'm going with this is as soon as you receive a quote from a software vendor you've set a benchmark and it you've actually in fact started the negotiations either that that number comes in way too high they've given you more than you need or it's an excessive rate or they come in too low in which case they've haven't provided you everything that you need either way you're starting from a point of disadvantage because any any move you make from that point puts you more in line with what you want rather than negotiating around what you actually need so the first step is to understand the functionality that you need in your software specifically understanding the integrations that are going to be needed what other solutions are going to tie into that either brought in through the software vendor a lot of organic companies such as netsuite these days are bringing in partner firms to help support missing functionality or add additional capability of their software package make sure that's included in an understanding of what you need a lot of times you might have an internal human resources package or crm solution that you want to integrate with your new erp we want to make sure that that is considered when you start the negotiation process and when you ask for that initial quote from your vendor the second point here is once you've defined what it is that you need is to go do your research you don't walk onto a car lot anymore without having a clue of what a car is going to cost otherwise you could end up paying who knows what so you want to have some framework the difficult part in the erp world is that it's not really public knowledge vendors don't publish their what clients are paying for for software however through the internet you can find a lot of information there are a few vendors oracle in particular that does promote and actually share their software costs be a little bit aware of that because they're they're broken out in ways that doesn't really facilitate a full package but it can give you a starting point you can also do research on uh review sites uh organizations that that offer review of software people sometimes share what they're paying on on a on an average rate they'll give indications of where their their costs will fall the best approach for this is to hire a firm such as third stage consulting to help you navigate this a company that has done negotiations that knows the software market is a great great way to get some guidance and make sure that you're starting off in in the right direction and really get the best value for your money the other thing to consider is you don't necessarily always have to look at just the cost of this particular package that you're bringing in there's a lot of tier two solutions that don't have as much available information on previous negotiations or case studies but you can look a little bit outside of that find comparable solutions see what they're running it it starts to narrow down your expectation of what this cost could be and where you want to be as a starting point for your negotiations the other pieces of research would be to make sure that you you've done some diligence with your software vendor ideally that's a demonstration that they've gone through and what this provides you is tying back to the first point is it gives you an idea of where there might be some gaps it gives you a point of a starting point of negotiations like you know that there's something that they're not going to cover or you know that there's something that they're maybe a little bit weaker on having that knowledge before you walk into negotiations is extremely valuable [Music] once you've determined what is that you need you've done a little bit of research the next step before you just talk to software vendors or start to get those quotes coming in is to understand your internal needs and process a lot of times we find companies just start running into their negotiations just saying what can we get what price can you give us which you know it leaves it open for the vendors to come back with anything they want to but if you've got an understanding of your budget cycle if you've got an understanding if your internal goal is short-term versus long-term savings upfront costs deferments have a sit down with your cfo and understand what your trajectory is for cash flow what your real targets are because understand that when you ask for something from a software vendor you also have to give something up it's a balance beam you want it what you want to do is make sure that that high end of the balance beam is what you actually want and that you're you're letting go what you don't what isn't as important for your company get that perspective in place internally and then you're ready to go out and start talking with software vendors to this point we're assuming that you've done some form of evaluation whether through a third-party firm or internally maybe you asked your best friend what software they're using whatever the case may be you've done some level of evaluation to get to a point of asking for a quote from a software vendor we do recommend if you haven't utilized help at this point this is a great time to bring in an independent firm an advisory firm to help with your negotiations the reason is is because anybody can ask for a lower price and they will be given a lower price but what happens in negotiations is the software vendor will make it up on the other end so understanding the the intricacies of the software contract what go what happens with accelerators what happens with future terms and tying those all to your needs is a critical piece and understand also when you're when you're talking about setting up an understanding of your needs and talking about setting budgets that you're looking a little bit into the future now we find a lot of companies saying just if we were to get the software up and running right now what's the cost let's get that locked in but understand ideally you're going to be in this software for 10 20 years so you want to think a little bit ahead of schedule and make sure that you're negotiating terms that are going to be valuable down the road not just for the short term [Music] with that structure in mind hopefully you're ready to start moving into negotiating with your software vendor hopefully this has been helpful for you like you've liked what you've seen if you have questions please feel free to reach out my information is provided and also subscribe to our channel we've got a lot more available information helping companies through this digital transformation and these changing times and really appreciate your time you