Enterprise May 2007 If You Don’t Ask……. Tom Scott University of Wisconsin - Madison Educause Enterprise May 24, 2007 Chicago, IL Copyright [Thomas J Scott, 2007]. This work is the intellectual property of the author. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright statement appears on the reproduced materials and notice is given that the copying is by permission of the author. To disseminate otherwise or to republish requires written permission from the author.

Enterprise May 2007 Getting Vendors to Understand Managing the Relationship Negotiating Competition Long Term View –Key Success Factors What if Things Go South Market Consolidation A Handy Graphical Analysis Tool

Enterprise May 2007 Time

Enterprise May 2007 Buyer’s View of Acquiring Something Problem/Opportunity Identification Ideas Vetting Guesses on cost/timeline Vendor contacts RFP/RFB only if necessary Return/Review/Assess (Is there an existing relationship?) New vendors show up New ideas from new vendors Re-assess/Evaluate Make a choice Negotiate/Contract ENJOY

Enterprise May 2007 Seller’s View of Acquiring Something If relationship exists -> probably knows of opportunity Wants in Starts being part of needs assessment/solution Figures out who the competition is Figures out most likely way to “win” this business Probably starts “selling” solution right away If possible wants to avoid the bid If not, then wants to help “frame” the bid If the bid hits the street Not all vendors will bid Bidding is expensive The more complicated the bid the higher the cost of responding and those costs are going to be covered somewhere

Enterprise May 2007 Getting Vendors to Understand & Listen 1.What’s your value to this vendor? 2.Is this vendor committed to HE? 3.Is there an active and independent UG?

Enterprise May 2007 ”Discovery - A term that gets overused but I think is very important from both perspectives. It only makes sense that the more you know of me and my company and the more I know of you the better our chances of meeting expectations and arriving at a mutually satisfying solution.” Manuel “Buddy” Ramos, Ciber

Enterprise May 2007 Managing the Relationship 1.Know the entire chain you’re dealing with (Silos report up but they come together somewhere) 2.Do you have an executive relationship established? - Use it or lose it 3.Define the relationship YOU want High competitive - Small # big vendors - Big # small vendors 4.Is there an institutional history w/this vendor? 5. “Chips” - Know how to accumulate, how to spend ‘em

Enterprise May 2007 “Work at the relationship. This isn’t like buying a car where you have no involvement with sales after the contract is signed. Your ability to establish a working relationship will dictate the responsiveness of most vendors” Stan Jakubik, AVC University of Maryland System

Enterprise May 2007 “Chips - You agree to sponsor site visits. Maybe you’ll do interviews, deliver a paper at their conference…… For their part the vendor helps resolve problems faster than they might otherwise or maybe they provide free consulting……..” Bridget Haggerty, Acting CIO, Oregon Health & Science

Enterprise May 2007 Negotiating 1. Everything is negotiable 2.Look for Mutual “Wins” 3.Know the quantities of products/services you own now and will own from this vendor 4.Centralize all activity you can identify (products/services/maintenance) 5.Get control over EVERY purchase from this vendor 6.Consolidate previous business - Try for coterminous on everything

Enterprise May 2007 Negotiating 7.Academic calendar doesn’t align well with business calendar 8.Who will actually negotiate – what’s their goal Least cost - Least TCO - Business direction & future readiness 9.Leverage the vendor’s silos e.g., Tech, Apps, Training 10.Don’t forget training 11.Pricing metrics FTE’s, Students, CPUs, Continuing Ed, Gross Budget – Think in FUTURES 12.You Have Promotion value

Enterprise May 2007 “ Because educational entities are often attached to their own cycles, they often have difficulty capturing some of the fire sale prices available in these times of opportunity. ” Mick Holsclaw, CIO - Los Rios Community College District

Enterprise May 2007 Competition – Understanding/Taking Advantage 1.Price 2.Quality 3.Leverage 4.Relationship 5.Image (theirs and yours) 6.Consortium opportunity 7.“Throw ins” 8.Bids are expensive Can it be avoided 1.If this vendor, then who of your peers contracts w/them? (caution: If you bought your car, do you like that car?)

Enterprise May 2007 Long Term View - Key Success Factors Mutual trust & respect Mutual Need Shared Direction Culture Match

Enterprise May 2007 ” From my experience, building strong business relationships is the key critical success factor for both institutions and vendors. At the end of the day, buying and selling happens between "people," not between organizations. People buy from people they know, trust, and like. Similarly, people find it easier to sell to people they know, trust, and like.” Paul Stieman, Oracle

Enterprise May 2007 What if Things go South 1.Define the risks 2.Assess those risks 3.It could be you, you know 4.Sue a vendor – get serious

Enterprise May 2007 Market Consolidation It happens - Have a plan

Enterprise May 2007 Time To go Back To work! Enterprise May 2007

Enterprise May 2007 Time

Enterprise May 2007 Thank You