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Master Contract Review and Negotiation for Software Agreements

Optimize spend with significant cost savings and negotiate from a position of strength.

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Contributors

Christiaan Murphy, Global Software Category Manager at CGI
Jeffery I. Gordon, SVP, author of Software Licensing Handbook & Mortgage Lending Vendor Operations Manager at BT&T
David W. Tollen, Attorney at Law & Founder at Sycamore Legal, P.C.

Your Challenge

Internal stakeholders usually have different – and often conflicting – needs and expectations that require careful facilitation and management.
Vendors have well-honed negotiating strategies. Without understanding your own position and leverage points, it’s difficult to withstand their persuasive – and sometimes pushy – tactics.
Software – and software licensing – is constantly changing, making it difficult to acquire and retain subject matter expertise.

Our Advice

Critical Insight

Conservatively, it’s possible to save 5% of the overall IT budget through comprehensive software contract review.
Focus on the terms and conditions, not just the price.
Learning to negotiate is crucial.

Impact and Result

Look at your contract holistically to find cost savings.
Guide communication between vendors and your organization for the duration of contract negotiations.
Redline the terms and conditions of your software contract.
Prioritize crucial terms and conditions to negotiate.

Start here – read the Executive Brief

Read our concise Executive Brief to find out how to redline and negotiate your software agreement, review Info-Tech’s methodology, and understand the four ways we can support you in completing this project.

Master Contract Review and Negotiation for Software Agreements – Executive Brief

Master Contract Review and Negotiation for Software Agreements – Phases 1-3

1. Gather requirements

Build and manage your stakeholder team, then document your business use case.

Master Contract Review and Negotiation for Software Agreements – Phase 1: Gather Requirements

RASCI Chart

Vendor Communication Management Plan

Software Business Use Case Template

SaaS TCO Calculator

2. Redline contract

Redline your proposed software contract.

Master Contract Review and Negotiation for Software Agreements – Phase 2: Redline Contract

Software Terms & Conditions Evaluation Tool

Software Buyer's Checklist

3. Negotiate contract

Create a thorough negotiation plan.

Master Contract Review and Negotiation for Software Agreements – Phase 3: Negotiate Contract

Controlled Vendor Communications Letter

Key Vendor Fiscal Year End Calendar

Contract Negotiation Tactics Playbook

Guided Implementations

This guided implementation is a six call advisory process.

Guided Implementation #1 - Gather requirements

Call #1 - Define business use case and build stakeholder team

Call #2 - Evaluate initial proposal

Guided Implementation #2 - Redline contract

Call #1 - Review terms and conditions

Call #2 - Validate requirements and incorporate into redlined contract

Guided Implementation #3 - Negotiate contract

Call #1 - Develop a negotiation strategy

Call #2 - Review final proposal

Book Your Workshop

Onsite workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost onsite delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.

Module 1: Collect and Review Data

The Purpose

Assemble documentation.

Key Benefits Achieved

Understand current position before going forward.

Activities

Outputs

1.1

Assemble existing contracts.

1.2

Document their strategic and tactical objectives.

1.3

Identify current status of the vendor relationship and any historical context.

1.4

Clarify goals for ideal future state.

Business Use Case

Module 2: Define Business Use Case and Build Stakeholder Team

The Purpose

Define business use case and build stakeholder team.

Key Benefits Achieved

Create business use case to document functional and nonfunctional requirements.
Build internal cross-functional stakeholder team to negotiate contract.

Activities

Outputs

2.1

Establish negotiation team and define roles.

RASCI Chart

2.2

Write communication plan.

Vendor Communication Management Plan

2.3

Complete business use case.

SaaS TCO Calculator
Software Business Use Case

Module 3: Redline Contract

The Purpose

Examine terms and conditions and prioritize for negotiation.

Key Benefits Achieved

Discover cost savings.
Improve agreement terms.
Prioritize terms for negotiation.

Activities

Outputs

3.1

Review general terms and conditions.

3.2

Review license- and application-specific terms and conditions.

Software Terms & Conditions Evaluation Tool

3.3

Match to business and technical requirements.

Software Buyer’s Checklist

3.4

Redline agreement.

Module 4: Build Negotiation Strategy

The Purpose

Create a negotiation strategy.

Key Benefits Achieved

Establish controlled communication.
Choose negotiation tactics.
Plot negotiation timeline.

Activities

Outputs

4.1

Review vendor- and application-specific negotiation tactics.

Contract Negotiation Tactics Playbook

4.2

Build negotiation strategy.

Controlled Vendor Communications Letter
Key Vendor Fiscal Year End Calendar

After each Info-Tech experience, we ask our members to quantify the real time savings, monetary impact, and project improvements our research helped them achieve. See our top member experiences for this Blueprint, and what our clients have to say.

Client

Experience

Impact

$ Saved

Days Saved

Testimonial

BC Transit

Guided Implementation

9/10

N/A

validated what we thought we knew it was in context validated gaps and deficiencies and identified new ones some ideas on next steps and how to fill the gaps very good. thank you

U.S. Auto Parts Network, Inc.

Guided Implementation

9/10

N/A

U.S. Auto Parts Network, Inc.

Guided Implementation

8/10

N/A

Canpotex Limited

Guided Implementation

10/10

$2,000

QuikTrip

Guided Implementation

9/10

$13,236

QT Team on the call today would like more time to digest the comments from the contacts analyst before the call. If QT could have 1 week before discussing the comments / changes it would improve our preparedness for these calls. Maybe we can change how we do this process. Thanks Charley

John Wiley & Sons, Inc.

Workshop

10/10

$132K

Great guys, you should continue to invest in other areas like Cybersecurity and Martech platforms. Both areas are saying huge disruptions and significant market entrants... some speciality here could totally be helpful

Children's Hospitals and Clinics

Guided Implementation

10/10

$125K

TFI International Inc.

Guided Implementation

10/10

N/A

Scott info was very helpful and help us to request all the info needed for this deal and future deals. It also gave us the tools to get more out of the negociation with VMWare.

Truckee Meadows Water Authority

Guided Implementation

8/10

$13,236

I can't think of any worst parts of the experience. The best part for our organization is simply the comprehensive review of contracts, a practice not yet fully implemented here. Having an organization with the experience that info-tech does walk us through these contracts helps us to understand the issues and ultimately limits our liability and reduces cost is worth the price of admission. Thank you for having our back!

McKeil Marine Limited

Guided Implementation

10/10

N/A

I had problems with attending the meetings on time. This was my first time having infotech review a IT contract. Would have been nice to have an expectations guide and what to expect. the process was unclear to me at first. however once i spoke to to Joel, i saw the benefit.

TFI International Inc.

Guided Implementation

9/10

N/A

Good advice on the the contract terms and conditions....would have appreciate a pricing review with more data.

Hines, Inc.

Guided Implementation

10/10

N/A

Overall awareness of the services offered. The potential to assist with our Workday contract renewal is extremely valuable. Thank you!

Blessing Hospital

Guided Implementation

10/10

$13,236

Renown Health

Guided Implementation

6/10

N/A

Scott quickly responded to my request for information on pricing for Polycom equipment and an SOW. Thank you!

Renown Health

Guided Implementation

6/10

$21,840

Scott's quick turn around on this request is greatly appreciated and his insight and analysis on the renewal is very valuable. Helped reduce our pricing and sets up our strategy for the future.

Renown Health

Guided Implementation

6/10

$120K

Scott's analysis and price information helped us drive down the cost of new licenses by $91K. Thank you!

Macerich Company

Guided Implementation

10/10

$26,473

Scott's expertise and input is invaluable, and always a pleasure to work with. His insights continuously bring us to light that we are on the correct path to savings and securing best pricing.

Macerich Company

Guided Implementation

8/10

$13,236

Scott's expertise and research is invaluable.

Ontario Lottery And Gaming Corporation

Guided Implementation

6/10

N/A

This discussion was very informative. It confirmed my thinking and provided me additional insight and tools to better enhance our internal process and governance structure.

Washington State Department of Ecology

Guided Implementation

6/10

$1,323

Scott Brickley is always very helpful and have enjoyed working with him.

County of San Mateo

Workshop

6/10

$26.47M

N/A

Best: All information, knowledge, and experience conveyed Worst: none

Tallahassee Memorial Healthcare

Guided Implementation

6/10

$39,709

N/A

I enjoyed the presentation. Scott was versed and experience with the material. He and his team has done the work that we have tried to start numerous times.