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Negotiation Management

This process aims to negotiate the best terms with all vendors and to provide negotiation skills and a framework for ongoing interaction with IT suppliers.

Tasks

Skills

Manage contract negotiations with hardware, software, and service providers

Align service levels with business objectives

Create favorable contractual terms for the IT organization

Strong understanding of IT strategy and external IT market

Understanding of industry best practices in negotiating:

– For each major vendor

– Corporate rules for each vendor

Ability to integrate technological, financial, and legal information needed for successful negotiations

Staffing

Automation Technology

Vendor manager

Contract specialist

Contract administrator

Electronic access to legal, technological, supplier, and market information

Best Practices

Metrics

Strong integration of negotiation management with the contract management process

Ability to negotiate with vendors whose products are commodities (i.e., vary only in price, not functionality) and therefore whose margins are small

Percent of discount versus industry average

Scope of negotiation

Number of enterprise-wide versus customer specific contracts

Multi-year versus one-time iterations

Process Integration

Futures

Contract management

Improved, automated mapping of IT requirements to market and technology trends


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