1. SW Negotiation JUJITSU Elgin Ward ICN 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. Topics Introductions Part-1: Fully armored Samurai Part-2: Account Control Process Part-3: SW negotiation Jujitsu Do’s and Don’ts of SW negotiation Jujitsu

4. Part – 1: The fully armored Samurai

5. Amazing Technology Major WOW factor Software Pricing programs Contact center Development tools Robotics Many other functionalities

6. Amazing Technology Cloud Services SaaS PaaS IaaS XaaS Big Data Internet of Things (IoT)

7. Sticky Products Very addictive Unique and, hence, irreplaceable Converting data Try it, you’ll like it! Mutiny at the Pentagon The magic scanning box New angle – free Open Source software

8. Powerful IP Protection Intellectual Property laws Copyright Patent Trade Secrets Trademarks

9. Powerful IP Protection Author/vendor owns ALL rights including DERIVATIVE works Customer owns NOTHING... unless... expressly stated: Work made for hire Assignment of rights License to use

10. Licenses & i-Limits Licensing of IP Powerful tool Vendors don’t sell IP but retain ownership Absolute control of usage Time Geography Types of usage For example, production, maintenance, DR,...

11. Licenses & i-Limits Invisible LIMITS (“i-Limits”) Included in EVERY grant What licensee CAN do (visible) AND, What licensee CANNOT do (often invisible)

12. Licenses & i-Limits Examples of grants & i-Limits, Right to use on Tuesday means NO use Wednesday through Monday Right to use in the USA means NO use anywhere outside the US Right to use for accounting does NOT include use for advertising, maintenance, DR,...

13. Training in Sales Initial training can be 1 year Ongoing training – 1 week per quarter Content of training? Products and services Sales psychology Selling to large organizations

14. Expense Accounts For what activities do Sales Reps use their Expense Accounts? How big is a Sales Rep’s Expense Account? On whom do Sales Reps spend their Expense Accounts?

15. Team Approach Do Sales Reps work alone? Who else might be on the sales team? The trusted consultant The equipment repairmen The ambitious spouse The Sales Manager

16. Part – 2: Account Control Process

17. First Thrust - Contacts Contacts = control How important are Contacts to Sales Reps? No Contact No relationship of Trust No sales 

18. First Thrust - Contacts What kinds of Contacts are there? Information sources Champions Decision Makers Examples: receptionist, user, CIO,... Preferences? Selling to VITO

19. Second Thrust - Trust Controlling with Trust What is the need and power of Trust? How can a Sales Rep build Trust? Questions and answers A promise made, a promise kept Not paid a cent When and where does Trust give the Sales Rep negotiation leverage?

20. Third Thrust – Narrow Problem definitions Defining the Problem = control In defining Problems and needs, what is the focus of the Sales Rep? Technical Problems to be solved, needs to be met Performance Speed Innovative, industry leading Price

21. Third Thrust – Narrow Problems definitions What does the Sales Rep often skip? What if scenarios... Product doesn’t perform as promised Product stops working after 6 months Third party claim stops use of Product Warranties (Requirements, IP rights,...) Remedies i-Limits Vendor Documentation vs Customer Requirements

22. Fourth Thrust – Compelling Solution Defining the Solution = control What is “Funneling”? How is Funneling achieved? What leverage does Funneling give?

23. Fifth Thrust – Consensus of Decision Makers DM consensus = control Who makes the BUY decision? Why the Sales Rep wants to discover each Decision Maker Diverse motivations of Decision Makers User Business manager IT manager CFO CEO

24. Sixth Thrust – Vendor Contract documents Vendor Contract = control Vendor vs Customer K terms How a Sales Rep ensures the Vendor Contract documents are used Timing Procurement’s involvement Timing Vendor response to Contract docs Timing negotiations Story: 7 weeks of pain

25. Seventh Thrust – Dazzling Implementation Implementation phase = control WOW the Customer Stakeholders Spreading the sticky Product Implementation is a networking bonanza Increasing Contacts Preparing for cross-selling and upselling

26. Eighth Thrust – Recommend additional Buys Review & recommend = control Vendor recommendations What has gone well (WOW factors) How can Vendor better help Customer? Same Product to Customer’s other divisions Other Products and Services

27. Part – 3: SW negotiation Jujitsu

28. Jujitsu is a Japanese martial art and a method of close combat for defeating an armed and armored opponent in which one uses no weapon or only a short weapon.

29. Proactive Countermoves Where the Wind blows Trusted helper Awareness of all Problems and Needs CYA Solutions Strategic Decision Making Customer Contract documents Rolling Estoppel Hansei

30. First countermove – Where the Wind blows We must own the trees in our forest How can we know when the Wind blows? Who notes the blowing of the Wind? How can we learn the direction our trees are leaning? Strategically meet with Stakeholders Attend Stakeholder planning meetings

31. First countermove – Where the Wind blows How can we learn the direction our trees are leaning? (cont’d) Get copy of Stakeholders’ roadmaps Analyze Stakeholder yearly and multi-yearly budgets Take Customer IT management to lunch Monitor for SW Demos and debrief attendees

32. Second Countermove – Trusted helper Discover your Stakeholders’ WIIFM Speak WIIFM-ese to your Stakeholders Learn how to help your Stakeholders Information needed? For example: IP analysis of existing SW portfolio (can/can’t do) Financial viability/problems of key SW vendors Roadmap direction of other Divisions of company Valuable internal company news Analysis and report on SW portfolio spend (SW licenses, maintenance, Cloud services,...) Stories on success/problems in SW negotiations

33. Second Countermove – Trusted helper Learn how to help your Stakeholders (cont’d) Administrative work needed? For example: Filling out forms Get internal approvals Get documents signed Do other needed leg work

34. Second Countermove – Trusted helper Learn what your Stakeholders dislike about Procurement Address and resolve the dislikes Be a resource your Stakeholders find meaningful and helpful

35. Third Countermove – Full awareness of Problems What is the purpose of identifying Problems and needs? Discover lifecycle and roadmap for Problems and needs Develop detailed requirements Technical Operational

36. Third Countermove – Full awareness of Problems Develop detailed requirements (cont’d) Service Level requirements IP requirements License grants needed Maintenance rights needed Pricing structure needed i-Limits analyzed

37. Third Countermove – Full awareness of Problems Develop detailed requirements (cont’d) Warranties (standard) Title Quiet enjoyment Against IP infringement Compliance with all Customer performance specifications Warranties – others as needed (performance, design, integration, compatibility, configuration,...) Remedy requirements

38. Fourth Countermove – CYA Solutions In acquiring a Solution, goal one is to prevent Funneling by Vendor Goal two: discover and explore ALTERNATIVE solutions Stakeholder-preferred SW Vendor Alternative SW Vendors Cloud Service Providers Do-it-yourself approach Delay the project

39. Fifth Countermove – Strategic Decision Making Who knows the Customer Decision Makers best? What criteria should the Decision Makers consider? Tactical criteria Immediate in time Requestor’s issues ONLY

40. Fifth Countermove – Strategic Decision Making What criteria should the Decision Makers consider? (cont’d) Strategic criteria Longer term Companywide Tactical vs Strategic - the difference?

41. Sixth Countermove – Customer Contract documents Keys to ensure a Customer contract is used Sourcing owns the trees in its forest Timing – Sourcing engages as soon as the Wind blows in the trees Procurement helps define the Problems/Needs including detailed requirements for Performance, IP rights, Remedies for What-if scenarios,...

42. Sixth Countermove – Customer Contract documents Keys to ensure a Customer contract is used (cont’d) Procurement interviews each Vendor Contact and makes notes on what the Vendor promised Vendor reps and promises are added to license grant of Contract as appropriate Procurement ensures each Decision Maker has considered each possible Alternative solution

43. Seventh Countermove – Rolling Estoppel Implementation accountability from Vendor Estoppel process Meetings Ask questions Write down answers verbatim Publish

44. Seventh Countermove – Rolling Estoppel What questions are to be asked? Scope changes Customer obligations Adverse third party involvement Timing issues Budget issues Cross-selling or upselling Customer personnel spoken with

45. Eighth Countermove – Hansei

46. Hansei is Japanese for “reflection.” It signifies a practice, both business and cultural, requiring a team or individual to deeply and soberly reflect on a completed act or project to learn as much as possible from it.

47. Eighth Countermove – Hansei What Hansei is not A celebration and champagne toasts for successful completion A wake and mourning for failures An immediate decision to buy more

48. Eighth Countermove – Hansei Elements of Hansei Final vs original time Final vs original budget Final vs original requirements Customer obligations performance Vendor promised performance If different, why for each element Use Hansei to help Procurement and Stakeholders grow closer together To improve future SW acquisition projects

49. Do’s and Don’ts Don’ts Don’t ignore the Wind Don’t make promises you can’t keep Don’t neglect your Promises Don’t let Vendors define Customer SW needs without Procurement help Don’t let a Vendor funnel your Decision Makers

50. Do’s and Don’ts Don’ts (cont’d) Don’t allow tactical Decision Making Don’t use Vendor Contract documents Don’t allow Implementation to be a networking bonanza Don’t let a Vendor use Implementation to expand Contacts and prepare for cross-selling and upselling Don’t allow project review to be a sales platform

51. Do’s and Don’ts Do’s Do own the trees in your forest Cultivate relationships with your strategic Stakeholders Proactively monitor your Stakeholders’ Vendor involvements Learn from your Stakeholders what they are told by the Vendor

52. Do’s and Don’ts Do’s (cont’d) Make promises to create hope & keep your promises to create Trust Intentionally exceed Stakeholder expectations Help your Stakeholders define fully problems and needs including as well IP rights, and remedies Ensure your Stakeholders consider their Alternatives before selecting a Solution

53. Do’s and Don’ts Do’s (cont’d) Ensure all Customer Decision Makers engage Ensure Decision Makers consider the STRATEGIC not just tactical view Use Customer Contract documents, or negotiate needed Customer terms into Vendor Contract

54. Do’s and Don’ts Do’s (cont’d) Use Rolling Estoppel to ensure Implementation is not a networking bonanza for cross-selling or upselling Use Hansei to evaluate and learn from the completed project Pause before the next “buy” Consider the next “buy” a separate transaction needing the full application of SW negotiation Jujitsu.

55. Diligent practice and mastery of proactive countermoves will improve Customer success in controlling its software procurement process! 終わり

56. Questions?