Best Practices: Seven Simple Steps To Successfully Negotiate Software Contracts

Published on March 1, 2004 by R "Ray" Wang

Users often find the hardest part of owning software to be negotiating the software contracts.  Complex licensing and pricing polices often meet ambiguous terms and conditions.  As vendors continue to gain the upper hand in deals, it will be important to match entry point in software ownership with seven steps to successfully negotiate a deal.

Common entry points in the software ownership life cycle:

  1. Selection – when the vendor selection process begins
  2. Implementation – when deployment begins
  3. Utilization – when the software is in production
  4. Maintenance – when bug fixes, enhancements, and upgrades are considered
  5. Retirement –when end of life considerations and sunsetting plans are put forth

7 strategies to plan a software contract negotiation

  1. Ensure that the right team is in place
  2. Identify the organization’s key business drivers
  3. Determine the product adoption plan
  4. Consider contract strategy implications of the software ownership life cycle
  5. Align contract strategy with product adoption
  6. Identify leverage points
  7. Prioritize key contract objectives

It’s now time to engage in contract negotiations!

Contact me at rwjhu@yahoo.com if you need any assistance in your contract negotiation.  We provide fixed fee pricing, retainer models, or gain sharing for Baan, JD Edwards, Lawson, Microsoft Great Plains, Oracle, Peopelsoft, SAP, And Siebel contracts.  Just ask!

The details are in 2 parts.  Part 1 is here.  Part 2 is here.

Copyright © 2004 R “Ray” Wang. All rights reserved.

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