Effective SAP Pricing And Licensing Negotiation

Sourcing and vendor management professionals involved in negotiations with SAP feel caught between their managers' expectations and the vendor's dominant negotiating position. However, vendor managers can win significant savings and protect their enterprise's future interests by employing a smart negotiation strategy. The discount level is important, but there are other license needs and risks that could be worth more in the long term than a few extra discount percentage points. Software sourcing managers should do thorough research, working with different colleagues and external advisors, to assess the possible future impact of relevant IT and corporate strategies. They then need to analyze this to define the risks they want to mitigate via their license agreement. Purchasers also have to understand the strength of their negotiation position by analyzing the three distinct purchase types: initial purchase, license extension, and maintenance renewal. Bringing these two dimensions together, buyers can better prioritize what they want to get from SAP and plan how to get it.