1. Vendor Licensing Tackling the Contract and Budgeting MonsterBy
Joanie Olivier
Executive Partner, Iconitel Consulting Services Inc.
Armand Brevig
Global Category Leader, Scientific & Business Information, AstraZeneca

2. Vendors seem to have the upper hand
Budgets are stretched as result of past high vendor price increases
Internal customers want more for less

3. How to Deliver More for Less?
Excel at:
Pre – Negotiation by Armand Brevig
Being Effective at the Negotiation Table by Joanie Olivier
Vendor Management by Armand Brevig

4. Pre - Negotiation Corporate Strategy & Vendor Licensing
Developing Content Acquisition Vision
Developing a BATNA
Standard Terms & Conditions

5. How Information Content Contributes to AZ’s Objectives
The right content, in the right format, at the right cost will help us get from A to Z:
Faster
With fewer incidents of failure
At reduced total cost A Z

6. The Link with Corporate Strategy
Corporate Strategy drives Functional Strategy
Functional Strategies drive Information Centre priorities
Information Centre priorities drives Information Content Acquisition

7. Possible rebalancing of information content portfolio
Example
Corporate: “…growth that will place AstraZeneca among the best in the industry”
R&D: “Deliver a portfolio of differentiated medicines that meet patient needs..”
Increased focus on diabetes research
Possible rebalancing of information content portfolio

8. Developing Information Acquisition Vision
Corporate vision / strategy
Key Customer vision / strategy
Dissemination Unit vision / strategy
Shared Information Acquisition vision
Consensus of key value drivers

9. Developing Information Acquisition Vision
To create a competitive advantage by driving the way AZ licenses, manages and exploits published information content
Information content acquisition VISION
Optimise resources spent on contractual work/ negotiation
Demand Management, Workflow Integration & Extend reach
VALUE DRIVERS
Increase Value / Manage Costs
Vendor Relationship Management
Value for money above industry average
Balanced resource allocation to maximise ROI
Leverage and streamline key vendor relationships for added value
Enhance decision making processes
STRATEGIC
OBJECTIVES

10. Management preferences
Staying on track
Avoiding “strategic drift”…
Management preferences
Vision
Resources
Supply Market
Internal Customers
Organisation

11. BATNA Best Alternative To a Negotiated Agreement
Pretend vendor you are planning to negotiate with does not exist – what would you then do and at what cost?
What alternatives do you think the vendor has – does s/he need your business to break into new market segment? Is s/he in financial difficulties?
What assumptions is either side making about each others BATNAs?

12. BATNA Best Alternative To a Negotiated Agreement
A well explored BATNA empowers you to accept what should be accepted and reject what should be rejected  Confidence at the negotiation table

13. BATNA – Porter’s 5 Forces Look for trends and changes
Barriers to New Entrants
How difficult is it to enter the market segment? Any signs of new entrants?
Power of Vendors
Power of Your Org
Fully leveraged? Unchallenged assumptions? Fragmented vendor relationships?
Industry Rivalry
How powerful are they in various segments?
Strong competition in sub-niches? Scope for exploiting that?
Substitutes
Thinking outside the box, what other solutions might there be?

14. Buying eJournal back files vs.document delivery
BATNA - Example
Buying eJournal back files vs.document delivery
Benefit 1
Benefit 2
Benefit 3
yr1
yr2
yr3
PV(yr1+yr2+yr3) >= Purchase cost
Purchase cost

15. YOUR Standard Terms & Conditions
In-house consensus of what is important
Quicker to complete contractual work – pre cleared legal language
Consistency
Less demands on in-house legal team

16. Pre Negotiation Key Points
Be clear on how you want information content to contribute to the success of your organisation
Negotiate from a position of strength by knowing your BATNA
Speed up contracting process by developing your own standard terms & conditions

17. Vendor Management Vendor Segmentation Business Reviews and KPIs
Vendor Relationship Management

18. Focusing Where it MattersHI
Strategic
Vendor Rel. Man. Zone
Business Review Mtng. Zone
Complexity
Collaborative
Cost Management Zone
Opportunistic LO HI
Criticality

19. Use free / low cost alternatives
Cost Management Zone HI
Cancel
Framework agreements
Charge back
Use free / low cost alternatives
Value potential
Spend more
Pay per view
Consolidate
Use emotion
Emerging alternatives
Bargaining LO HI
Ease of implementation

20. Business Review Meeting Zone
Jointly agree Key Performance Indicators (KPIs)
Consistently meassure KPIs
Jointly examine root causes for performance gaps
Agree corrective action

21. Business Review Zone: KPI Development
Financial Perspective
KPIs
Customer Perspective
Supplier Quality Perspective
KPIs
KPIs
Communication Perspective
KPIs

22. Business Review Zone: KPI Development
Good KPIs should be:
Relevant to your information acquisition strategy and vision
Difficult to manipulate but easy to generate
Mixture of output, input, and process KPIs
Limited to the KEY ones. 2-3 in each areas

23. Vendor Relationship Management (VRM) – Why Bother?
Fully exploit vendor’s capabilities
Best of breed T&Cs
Transparent relationship
Lower total costs

24. VRM Zone – Total Visibility
Total Relationship
AZ’s Negotiation Team
Vendor’s Negotiation Team
Total Spend
Total Business Demand
Now and future (3-5 yr plan)

25. VRM Zone – Total Relationship
Framework Agreement outlining boilerplate terms
Service specific contract terms
Contract/Service specific boilerplates

26. VRM Zone – Total Spend AZ Group Vendor Group dB subscription eJournals
Subsidiary A
Subsidiary B
Vendor Group
dB subscription
eJournals
Reprints
Advertising
Sponsorship
Publishing/Editorial Board

27. Total Business Demand Marketing R&D Legal Sales IT 3 – 5 yrs.
Planned activities w. impact on info. acquisition
Marketing
R&D
Legal
Sales IT
3 – 5 yrs.

28. Vendor Management Key Points
Focus where it matters
Work with vendors to improve performance on both sides
Leverage total business relationship to fully take advantage of vendor’s capabilities