IT procurement professionals face increased pressure to deliver efficiencies and cost-savings as businesses assess their finances amidst evolving demands. Finding innovative ways to deliver value back to the business and gain the competitive edge requires effective IT procurement processes.
All software and cloud negotiations will benefit from a formalized two-phased approach to negotiation, and to help procurement teams get a handle on this strategy to achieve the best optimized outcome, we have compiled a Best Practice IT Procurement Guide.
The Guide will look at the current challenges faced by IT procurement today, from the lack of accurate data on current usage to support future requirements and business strategies, to the changing shape of software contracts as cloud migration increases. We’ll then take you through Livingstone’s tried and tested two-phase procurement strategy.
The two phases of IT procurement
When it comes to negotiating software and cloud deals, preparation is key and planning should start up to 12 months before the renewal date. At Livingstone Group, we advocate the following two-phase approach:
1. Planning and Groundwork
In this first phase, the guide will look at how to:
- Establish your organization’s software and cloud services needs, which will also support planned organizational changes, business and product strategy, and go-to-market initiatives
- Understand and plan the different user requirements and how this may affect new contact details
- Collaborate with multiple internal company stakeholders from across your business and effectively work with IT to fully understand all requirements
- Conduct a current estate analysis to provide a clear picture of your current position and understand your licenses and deployments
- Assess your usage to build a strong case and justify your requests in order to get an optimized deal from the vendor
- See where you could be falling behind and if any non-compliance issues can be resolved
- Create an optimized Bill of Materials (BOM) and outline your minimum requirements, based on the results of your current estate analysis and a prediction of your future growth and needs.
2. Execution
In the second phase of Livingstone’s approach, the guide looks at how to:
- Execute and achieve the best commercial and contractual outcome, focusing on optimizing your negotiation strategy and the execution of all your previous detailed planning
- Review your outgoing contract, your past usage and your previous licenses, and draw up your future requirements and costs based on that evidence
- Present the vendor with a proof-based proposal that will give you powerful leverage during negotiations
- Ensure that you are speaking with the right level people who can offer discounts and concessions and provide you with your optimized BOM
- Benchmark your ideal contact to present the vendor
- Establish questions you need answering.
Successful vendor negotiations are mainly comprised of solid, well thought-out plans and presenting a compelling, intelligence-led case that the vendor cannot deny. If you have an optimized BOM, a picture of your ideal contract and unified stakeholders, then you’ll have everything you need for a smooth negotiation process.
ABOUT THE AUTHOR
Ian Camino – Chief Revenue Officer, Livingstone Group
Ian joined Livingstone Group as Chief Revenue Officer, through the acquisition of Cloud Optics. He is a globally experienced leader in Software Sales, Consulting Services and Software Asset Management, with over 18 years’ experience in Software License Consulting. He has worked across all different types of client sizes and verticals within Europe and North America.
Prior to joining Cloud Optics, Ian was responsible for building, transforming, and leading one of the largest specialist consulting practices in EMEA. He has a successful track record of designing and building Cloud Applications that facilitate the delivery and management of key License Consulting project components.