Legal teams that do not have a centralized contract tracking and negotiation system often spend the majority of their time compiling contract processing from different sales teams and researching the latest versions of contracts. For companies that work with quarterly sales cycles, the situation is even worse – we`ve heard some general counsel say that the last weeks of a quarter account for 50% of contract volume. New legal technologies combine the best features of both approaches. They allow a high level of configurability and control (essential for legal teams) while requiring minimal user training. For example, new contract negotiation tools allow users to quickly annotate documents online and engage multiple colleagues via online notifications or email, rather than having to send individual emails with attachments. Integrative negotiations in which two parties (buyer and supplier) find a mutually acceptable solution in which everyone wins. List a new provider, for example. According to the Chartered Institute of Procurement & Supply (CIPS), there are seven steps in a contract negotiation process: There may be value-added benefits if this supplier and SaaS product are discovered during supply negotiations. For example, you may not have been aware of their customer panel or annual conference. Both are value-added benefits that give you, the customer, the opportunity to express your opinion and feedback. It also gives the SaaS provider the opportunity to hear your feedback and consider improvement updates. Can a contract lifecycle management (CLM) solution make your procurement contract negotiation process easier and more efficient? Are there best practices for better contract negotiation? Note that the art of the negotiator is to turn a distribution negotiation into an integrative negotiation, e.B. through better service in exchange for a price increase.
For example, suppose your SaaS implementation includes a third-party integration and that third-party provider charges a fee for the integration that your provider did not include in their offering. For a SaaS buyer on a budget, this could really cause a project to fail. The negotiation process offers many opportunities to discover this type of surveillance. Procurement negotiations are an act of faith. Each party makes commitments that it believes it can honor for the moment, knowing that the context – for both parties – evolves in a perspective called “VUCA”. Promises can be more difficult or costly than expected. The procurement negotiation process is not personal, although you have personally worked hard to prepare for it. Replace any defensive posture or negativity with empathy. It`s important not to give the provider the impression that you`re willing to fool them or exploit them to get what you want. Remember, everyone has to win.
Once the contract is signed and the collaboration confirmed, there are still some good practices to apply to consolidate the newly formed partnership. Listen. Seriously, active listening is probably the most powerful tool in your contract negotiation toolbox. During the trial period, you and the supplier should ask questions and actively listen to the answers. For example, are there any non-financial items you could add to the contract that would be important to them and relatively easy to offer in exchange for discounts or better terms? For example, .B. acting as a public reference or making introductions to a new market. In the second part of this series, we look at how developing a clear negotiation plan can improve both the results and the relationship with the supplier. We also offer other tips to improve negotiations with suppliers. Frequency of contact, team composition and choice of locations all play a role in the quality and effectiveness of discussions during supply negotiations. Always ensure a quick response to contract negotiations. Quick responses not only help reduce the likelihood of unwanted situations occurring, but also prevent the derailment of conversations that lead to a sale or deal. It is important to react quickly in conversations about global warming and prevent interested parties from reorienting themselves towards other alternatives.
Centralization. Legal teams have always had contracts scattered everywhere – in filing cabinets, on local hard drives and elsewhere. This decentralization exposed companies to significant risks. For this reason, contract management in the beginning focused on placing all contracts in one place. With the advent of contract lifecycle management solutions, centralization is no longer a major technological hurdle. The bank has adopted a two-pronged approach. The chief operating officer met with the chief operating officer of the security company to explain that the increase was unacceptable and would harm their relationship. And the procurement team threatened to partner with other financial institutions and bring the matter to the attention of national authorities responsible for restricting monopolies. The security company backtracked and introduced a price increase that was more in line with its cost increase. Negotiation is the process by which procurement professionals go through in order to create favourable conditions under a new supplier contract. This may include negotiating different terms when renewing a contract with an existing supplier or discussing terms from scratch with a brand new supplier. Then there are the potential sticking points that can determine how well the contract will work in practice.
This includes the definition: In routine negotiations – for example, a negotiation on a software license – discussions focus on things like applicable law, customer data processing, information security, and price. .