Large organizations easily spend millions of dollars on their enterprise software. Naturally, customers are concerned with ensuring that they are getting the best deal possible, but they should also remain realistic in the deals they can expect. Forrester can help clients walk this fine line in their contract negotiations. Analysts can help clients identify their needs and leverage, sharing considerations unique to different vendors. We created a set of scenario quick starts to help clients address the most common contract negotiation scenarios that occur with the major software vendors.

Contract Negotiation Best Practices

Below are some general software contract negotiation best practices. Check out the report Tackle Common Contract Negotiation Scenarios With Major Software Vendors for the full scenarios specific to Microsoft, Salesforce, SAP, ServiceNow, and VMware.

  • Start early for success. Avoid the last-minute scramble that will lead to sloppy oversights. If you have an upcoming renewal, establish a cross-functional team and dedicated project management 6–12 months in advance.
  • Take inventory. With the high prevalence of shadow IT, it can be difficult to know exactly what you have and its current usage. Gather current contracts to confirm the specific editions and products you paid for. Find the usage of each product across the organization at this stage, as well.
  • Get educated. Vendors have multiple products, plans, and bundles that can quickly lead to confusion. Understand what is, and is not, included in your product, and learn what your other options are.
  • Stay above the pressure. It can feel like the latest and greatest is the only option for your organization. Consider what the best path forward is and whether now is the right time for big moves. Your organization may not be ready now, but you can start preparing so that you are ready in a few years.
  • Involve others. Many different teams and functions likely use the same enterprise software products. Identify the key and future requirements that are nonnegotiable for these teams, and get buy-in from key stakeholders. While you want to avoid too many cooks in the kitchen, you don’t want to near the end of your negotiation and discover that must-haves are missing or expensive features that no one will use are included.

Want some more tips on software contract negotiation?  Forrester clients can schedule a guidance session with a Forrester analyst for more negotiation expertise.