The art of negotiation
By Isabelle Chan, ZDNet Asia
Monday, May 24 2004 05:00 PM
Have you bought software that worked well for the first six to 12 months but later discovered that business requirements have changed and you would like to renegotiate the terms of the contract? CNETAsia asked Pranav Kumar, vice president, Enterprise Application Software, Gartner Asia Pacific, for tips on how SMBs can get more out of their software.
Q. Which software contracts could an SMB review and renegotiate for better service levels/rates?
It depends upon where potential savings are higher and where users have relatively higher bargaining power. Also, renegotiation is possible only on maintenance fee being paid and on new licenses.
Also, SMBs can negotiate for better deals at the time of major version upgrades, because it is often treated like a fresh implementation. SMBs can also negotiate maintenance on unused licenses or modules, though it is usually difficult. If your organization is of more than usual interest to a vendor (perhaps in a vertical or geography where vendor is looking to get references), and your reasoning is sound (for example you can demonstrate that you ended up buying more licenses on advice of the vendor or implementation partner), you may be able to successfully renegotiate.
It's been said in most software, only about 10 percent of the features are used. How does one go about getting more from the remaining features that are unused?
First, I think SMBs usually use more than 10 percent of the functionality, otherwise they would not buy. Having said that, there is significant functionality that is not used. Often when the need arises for fresh functionality, users do not look at 'shelfware' or the software bought but not used.
At the time of purchase, SMBs should list down all functionality that is available, but not used. Refer to this list when looking for any new functionality. Chances are you will find a match in many cases. This is because, most products start their lives as horizontal products and over time functionality is added to meet unique requirements of different types of users. A lot of that functionality is hidden from view at the time of implementation. SMBs should consult the software and implementation vendor on this. Also, where possible, SMBs should not over-buy because they continue to pay maintenance on shelfware.
Pranav Kumar is research director for Enterprise Application Software, Gartner Asia Pacific. He is also a member of the CNETAsia SMB Advisory Board.
Get RSS feeds
