Streamlining Technology Negotiations

Situation:

With an annual spend of more than $10bn, a global technology company’s procurement team recognized the opportunity to approach negotiations more systematically and efficiently.

Problem:

Our Negotiation Audit revealed that the company’s learning solutions included more than eighty negotiation training courses. No standard approach for preparation existed, and negotiations often dragged on for many months as multiple functions sequentially negotiated or approved technical, financial, and legal terms and conditions.

Action:

In consultation with the team, we designed and delivered a customized workshop for leadership, then rolled it out across a dozen regional and local teams. In parallel we worked to develop new tools and an approval processes that better integrated the team’s technical, financial and legal functions. This included an expanded scorecard for measuring deal value on multiple commercial dimensions (financial, operational, risk mitigation), and a template to help summarize how renegotiated contracts had improved on previous terms and conditions.

Result:

The team saw faster times to contracting; improved terms and conditions; more efficient use of executive authority; and greater empowerment and reduced stress for the negotiators. In the quarter that followed, the team used the new framework to complete 55 deals amounting to $1.5B in total spend.