Enterprise System Spectator blog: ERP and enterprise system vendor evaluation, selection, and implementation.

The Enterprise System Spectator

Monday, December 01, 2008

Negotiating enterprise software deals in Q4

Ray Wang and Vinnie Mirchandani each have good posts this morning on negotiating software deals. Ray focuses on recommended buyer tactics in the current economic environment. Vinnie does a rerun of what he calls his "Top 10 Stupid Salespeople Tricks."

From Ray,
In both the enterprise and SMB space, recent market conditions point to a lack of available financing for enterprise software purchases. This trend will continue as the credit markets tighten. The result - vendors will be more inclined to discount. Enterprises engaged in contact negotiation with software vendors should take this opportunity to seek additional discounts as the scarcity of new deals will put customers in the driver seat.
Ray continues with five tips for buyers.

Vinnie's "stupid salespeople tricks" include "We want to be a partner, not a vendor," "One of us does not belong," and ""You are trying to commoditize us." Read his whole post for the full list of ten.

Both take a shot at revenue recognition as a vendor excuse. I covered the revenue recognition issues in my previous post. Although I believe revenue recognition is a legitimate issue, Ray encourages buyers to push back when vendors claim it hinders their flexibility:
Have the vendor demonstrate the range of discounts as they apply to their VSOE rules. Often times, the sales person is confused about how these rev recognition rules impact the deal and will “hide” behind these rulings. Breaking down the revenue recognition components often identifies hidden opportunities. Keep in mind there are some limits.
Vinnie agrees that most salespeople don't understand the accounting standards and therefore hide behind them. He writes,
A client CFO challenged a software salesman and asked to speak to his Controller about a so-called recognition issue. The issue magically disappeared soon after. We agreed it probably was a "commission recognition" issue rather than a revenue recognition issue.
Regarding the current economic climate, my own observation is that there are still quite a few organizations out there planning to buy software, at least here in Southern California. A local SAP SMB reseller told me last week that he has never been busier, believe it or not. But most deals have already slowed to a crawl. Buyers that are able to move forward, however, will find themselves in the driver's seat when it comes time to negotiate.

Related posts
Why vendors resist negotiating software maintenance fees

by Frank Scavo, 12/01/2008 05:52:00 AM | permalink | e-mail this!

 Reader Comments:

People always hate to talk about when they are laid off. But as it has become every day's news headline since Yahoo started it with cutting 1500 of its task force last year, now a need of platform has been in demand where people can express their selves in words how they are feeling about their company, whey the got laid off was that justified or not.
And every thing they want to tell anonymously.And www.layoffgossip.com is providing you that platform.
 
Post a Comment
 

Links to this post:


 

Powered by Blogger

(c) 2002-2016, Frank Scavo.

Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.

About the Enterprise System Spectator.

Frank Scavo Send tips, rumors, gossip, and feedback to Frank Scavo, at .

I'm interested in hearing about best practices, lessons learned, horror stories, and case studies of success or failure.

Selecting a new enterprise system can be a difficult decision. My consulting firm, Strativa, offers assistance that is independent and unbiased. For information on how we can help your organization make and carry out these decisions, write to me.

My IT research firm, Computer Economics provides metrics for IT management, such as IT spending and staffing benchmarks, ROI/TCO studies, outsourcing statistics, and more.


Go to latest postings


Search the Spectator!
Join over 1,700 subscribers on the Spectator email list!
Max. 1-2 times/month.
Easy one-click to unsubscribe anytime.

Follow me on Twitter
My RSS feed RSS News Feed

Computer Economics
ERP Support Staffing Ratios
Outsourcing Statistics
IT Spending and Staffing Benchmarks
IT Staffing Ratios
IT Management Best Practices
Worldwide Technology Trends
IT Salary Report

Get these headlines on your site, free!


Awards

2014 Best Independent ERP Blog - Winner

2013 Best ERP Writer - Winner

Alltop. We're kind of a big deal.
 
Constant Contact 2010 All Star Technobabble Top 100 Analyst Blogs


Key References
Strativa: Business strategy consulting, strategic planning
Strativa: IT strategy consulting
Strativa: Business process improvement, process mapping, consultants
Strativa: IT due diligence
Strativa: ERP software selection consulting and vendor evaluation
Strativa: CRM software selection consulting and vendor evaluation
Strativa: Project management consulting, change management
StreetWolf: Digital creative studio specializing in web, mobile and social applications
Enterprise IT News: diginomica


Spectator Archives
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
December 2005
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
June 2010
July 2010
August 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
September 2012
October 2012
December 2012
January 2013
February 2013
March 2013
May 2013
June 2013
July 2013
September 2013
October 2013
December 2013
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
August 2014
September 2014
October 2014
November 2014
December 2014
February 2015
March 2015
April 2015
May 2015
June 2015
July 2015
September 2015
October 2015
November 2015
February 2016
May 2016
June 2016
July 2016
August 2016
September 2016
Latest postings