July 15–16, 2004 Hyatt Regency Long Beach, CA © Maxelerate Systems Ltd. All Rights Reserved. NCMA Aerospace & Defense Contracting Conference Understanding and Preparing for a Changing Business Environment

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Breakout Session # 1 Jon Maxim, President, Maxelerate October 17, :45 PM Vendor Performance Management Getting What You Negotiated

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The Balance of Negotiating Power Vulnerability Skill Level Responsibility Tactical Advantage Access Incentive On The Same Side Timing Organizational Profile Who’s On First Internal Process Technical Advantage Requirements

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The Path to Agreement Win/Win? Zero Sum? Partnership?

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The Negotiation Objective Getting to Yes? To Plead or Not To Plead? Fairness

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The 4 Phases Competitive Environment Preparation ManagementNegotiation

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The VPM Process Management Manage The Contract Optimize Vendor Performance Direct Long-Term Relationship Control Unmanageable Vendor

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The VPM Journey Control Unmanageable Vendor Direct Long Term Relationship Optimize Vendor Performance Manage The Contract  Manage the “Paper Trail”  Manage the money  Manage your assets  Manage changes

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Manage The Contract Manage the “Paper Trail” –Contract content and event tracking Deliverables Service level agreements Events: Renewals, termination, price, etc. –Vendor interaction documentation Administer Contract

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Manage The Contract Manage the money –End-to end payment administration –Remedy and reimbursement entitlement Administer Contract

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Manage The Contract Manage your assets –What is an asset? –Physical Assets –Intellectual Property Yours Theirs –NDA’s and Proprietary Information Administer Contract

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Manage The Contract Manage changes –Inevitability –Vendor vs. client view –Incorporate rolling estoppels –Change process Focal point Response format Timely disposition Administer Contract

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The VPM Journey Optimize Vendor Performance  Track & Measure  Compare  Act!  Incent

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Optimize Vendor Performance Track –Customer responsibilities –Vendor responsibilities Enforce Compliance

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Optimize Vendor Performance Measure –Aligned with contract SLA’s Methodology –Problem prevention Enforce Compliance

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Optimize Vendor Performance Compare –Vendors within categories –Executive communication Enforce Compliance

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Optimize Vendor Performance Act! –Feed Back Performance –Obtain Remedies –Vendor management automation tools Enforce Compliance

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Optimize Vendor Performance Tier II Tier I Tier III Preferred Standard Strategic

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Incentives Management Optimize Vendor Performance

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Incentives Management Optimize Vendor Performance

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Incentives Management Optimize Vendor Performance

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The VPM Journey Direct Long Term Relationship  Establish Correct Relationship  The True Strategic Supplier

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Direct Long-Term Relationship What a strategic supplier brings to the “relationship table”: –Engages you in joint development –Their senior execs are assigned to you –Account teams have high knowledge level –Accountable for product performance –Leader in their industry –Committed to continuous improvement –Expectations custom built to your company –Create competitive advantage for you –Provides preferential pricing The True Strategic Supplier

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The VPM Journey    

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners The Contract The Marketplace The Relationship The Law Your Checkbook Sources Of Leverage Control Unmanageable Vendor

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners Assign project manager Form transfer team Develop termination strategy Gain executive sponsor approval Select replacement supplier Develop transition plan Ramp up new supplier De-ramp current supplier Deplete inventories Clear invoices Inform clients Communicate with current suppliers Communicate with stakeholders and business units Terminate supplier transactions Termination Project Plan Control Unmanageable Vendor

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners 5 Keys To Success Executive support Teaming stakeholders Classification of suppliers Measurement Rules of engagement

v October 17–18, 2005 Renaissance Atlanta Downtown Atlanta, GA © Maxelerate Systems Ltd. All Rights Reserved. NCMA 5th Annual Commercial Contract Management Conference Make the Connection: Your Customers, Suppliers, and Partners U.S.A Golf Road, Suite 1200 Rolling Meadows, IL Phone:(847) Fax:(847) Web: Canada 29 Pennock Crescent Markham, ON, L3R 3M5 Phone:(905) Fax:(443) Web: