1. Elgin Ward ICN Senior Trainer

2. Disclaimer The recommendations discussed in this Class are not intended to be and do not constitute legal advice. Before making any changes to your documents, methodologies, or practices, CAUCUS and ICN strongly recommend that you consult with your attorneys and other professionals.

3. Level Setting The Big Red Button for Software Maintenance (MX) What is decided up front? There will be MX Type of MX Payment plan for MX Budget commitment Who pays for MX No more decisions – MX is preapproved

4. Level Setting What difference does it make anyway? Annual spend Direction How MX sales are compensated How profitable is MX for Vendors? Public declarations Story #1 A valuable legacy

5. First Deadly Sin – Auto Renewal Maintenance (MX) is a contract How can contracts renew? Simply, renew automatically (evergreen) Auto renew unless written cancellation notice given at least 60 days prior to expiration Modified renewal, like month-to-month OR By agreement of the parties

6. First Deadly Sin – Auto Renewal Why is auto renewal a Deadly Sin? Customer internal critical review Negotiation leverage Why is negotiation leverage important? Changes to MX agreements What options give Customer greatest negotiation leverage? MX contract is allowed to lapse Potential adverse effects?

7. First Deadly Sin – Auto Renewal What options give Customer greatest negotiation leverage? (cont’d) Auto renew unless written cancellation notice given at least 60 days prior to expiration SUGGESTION: Unless Vendor gives Customer advance written notice of option window at least 30 days before window starts, pro rata extension of window Auto renew month-to-month on same terms and conditions until Customer gives 30-day advance notice of termination

8. Second Deadly Sin – Failing to prepare for Renewal Renewal can and should be a negotiation Successful negotiations require preparation Story #1: Lady said, “I do MX renewals” Why is failure to prepare a Deadly Sin? What resources are needed to prepare?

9. Second Deadly Sin – Failing to prepare for Renewal What does Customer need to prepare for MX renewal negotiations? Knowledgeable staff Time What role, if any, is played by Customer executive support?

10. Third Deadly Sin – Ignoring existing Contracts Rights and obligations for MX must be specified in Contract documents What Contract documents contain MX terms? Software License Agreement MX Exhibit to Software License Agreement Separate MX agreement Amendments Professional Services Agreement

11. Third Deadly Sin – Ignoring existing Contracts Vendor practices vs Contracts What is the Vendor’s billing practice for MX? Standard billing for all Repeat last year plus auto increase Story #1 Invoice for 10% increase Story #2 Invoice for $1,000,000 standard MX

12. Fourth Deadly Sin – Understaffing Why is MX renewal oft assigned to 1 or few employees? What could be done to encourage assignment of personnel to MX? How many contracts can 1 person read and effectively analyze per day?

13. Fourth Deadly Sin – Understaffing Importance of a business case for Staffing Story #1 In Trucking, you snooze, you lose Elements of a business case Identify opportunities Direct savings Operational improvements Document actual savings Document operational improvements

14. Fifth Deadly Sin – Having no improvement goals “If you don’t know where you are going, you’ll end up someplace else.” –Yogi Berra Does the Vendor have a MX goal and plan for the Customer? If the Customer doesn’t have a MX goal and plan, whose goal and plan will the Customer follow?

15. Fifth Deadly Sin – Having no improvement goals Why is no improvement goals a Deadly Sin? In what areas might a Customer have MX goals? Money MX Service Levels Customer operational performance Customer Data collection What would a Customer MX plan look like?

16. Sixth Deadly Sin – Keeping no or few MX Records What MX records could the Customer keep? Possible benefits of keeping records? Story #1 Anecdotes vs facts If the Customer keeps no performance records, whose records will be relied on?

17. Sixth Deadly Sin – Keeping no or few MX Records Why is keeping no MX Records a Deadly Sin? What resources are needed for record keeping?

18. Seventh Deadly Sin – No internal alignment Story #1 Who’s driving the train? How is MX sold? FUD Vendor expense accounts Who spends more time with Vendors? Employee with 500 MX Renewals per year? IT Management Other Business Unit Stakeholders

19. Seventh Deadly Sin – No internal alignment Why is non-alignment a Deadly Sin? How can the Customer address non- alignment? Financial data Performance data Description of IP grants and i-Limits Cross-functional teams MX goals MX plans

20. Other Deadly MX Sins IP grant does not allow for flexibility with MX (no self MX, no 3rd party MX, or combinations) Billing in advance rather than arrears SW license not separated from MX MX not stoppable without re- instatement fees MX not partitionable, parkable

21. Other Deadly MX Sins MX not based on Customer requirements Customer template not used for MX agreement Customer not require Vendor to provide Root Cause Analysis for MX failure Customer not requirement Vendor to provide copy of MX data it collects Not managing MX as an IT service project

22. Questions?