Zangenberg Webinar: Negotiating complex IT contracts.

Negotiating IT agreements is a discipline that combines classical negotiation theory with a necessary knowledge of how the IT market works. To succeed in your negotiation, you need to understand both the negotiation itself, the vendor, the market, the products and the people on the other side of the table. Do you understand them?

At this webinar we will give you an overview of the basic negotiation-theoretical elements you need to master. We will also give you valuable insights in subjects that require your special attention when negotiating IT agreements.

 

It’s not just about the money

When negotiating IT agreements, it’s not just about money. It’s also about terms, competencies, resources, service descriptions, and other elements that are crucial for the company’s strategic use of IT.

 

The market is not transparent

It can be difficult for customers to see what the market price is for IT, such as maintenance services, software, and system maintenance, as prices are largely set individually for each customer. There is no list of prices to turn to – thus, the supplier holds the cards. This is called information asymmetry, and the customer needs to obtain this data to gain the upper hand.

 

Some services experience a decrease in price over time

Some IT prices are falling, and this means that regular negotiation and renegotiation of IT agreements can lead to significant savings.

 

Big customers don’t necessarily get big discounts

Overall, if you want the best prices and the best contract terms, it requires you to invest significant resources in conducting a successful negotiation – regardless of the volumes you plan to purchase.

 

“Best and final” is typically neither “best” nor “final”

You need to be aware of getting a lot of “no’s,” but at the same time, be aware that it is not necessarily an expression that you cannot move the other party any further. It is instead an expression that you need to work more with the negotiation tools you have at your disposal.

 

You need to know the pain-limit

Zangenberg always recommends that you consider where the supplier’s pain threshold lies – as long as you also remember that there is always a fair distance from the first “best and final” to the actual pain threshold.

 

IT negotiations are like Wagner operas

There are many acts of negotiation, and you need to arm yourself with patience and not give up already in Act 2 and leave a lot on the table. It is often only at the end of Act 4 that the parties meet in the middle.

 

Many negotiators are caught in the Stockholm Syndrome

IT customers can find themselves in a situation where they do not believe they actually have a basis for negotiation. They must simply surrender to the demands set by the supplier. However, there are always opportunities for action – it just requires the right negotiation tricks.

 

You need to invest in IT negotiation

For some types of agreements, there can be a 50-100% difference between good and bad agreements. That said, it can be worthwhile to invest time and resources in becoming a skilled negotiator, both for entire companies and as individuals.

 

Some of the basic concepts covered during this webcast:

• Positions versus interests
• ZOPA (Zone of possible agreement)
• BATNA (Best alternative to negotiated agreement)
• Options
• Criteria
• The negotiator’s dilemma

 

In this webcast, we provide an overview, partly of the basic elements of negotiation theory that you need to be familiar with, but we will also give you insight into what you should pay special attention to when negotiating IT agreements.