10 ways to beat SAP at the bargaining table

Experts weigh in on how to get the best contract terms and concessions from SAP

By , IDG News Service |  Software, SAP

"When SAP changed their [compensation] plans for the sales guys, this impacted the timing of deals, significantly," he added. "You will now likely get a better deal in November, than December, so that SAP can be sure to recognize the deal this year."

4. Don't expect the world if you're buying a la carte

"Sales and marketing is SAP's biggest cost," Jones wrote in his report. "If your enterprise wants to evaluate SAP product by product and site by site, then SAP will rightly price accordingly, basing its discount on each deal's size rather than your aggregate spend volume. You may end up paying double the price for the software compared with an enterprise deal, but that could be a price worth paying for the greater choice and flexibility."

5. Maintain degrees of separation

One of the tougher tasks facing IT shops and procurement specialists is keeping track of ever-growing piles of software agreements, and vendors will often suggest what seems like a painless way to simplify things.

Run away from temptation, according to Wang. "Whatever you do, don't bundle your contracts," he said. "It may sound easy, but it reduces your flexibility. Oh, yeah, you get one bill. But you're locked in."

6. Remember the big picture

Successful negotiation with SAP isn't all about beating the best possible discount out of a salesperson. On new deals, customers should secure contract terms that speak to the application's full lifecycle, from purchase to implementation to its eventual replacement, Wang said. They should also contemplate what-if scenarios. "What happens if I have a merger? What can I change?" he said. "This is stuff you want to have on day one."

Future-proof your purchases as well, Jones warned. Sometimes, software vendors phase out products and customers have to pay additional money for the successor, Jones wrote. But some SAP buyers have finagled contract terms "that allowed them to swap products in their bundle for any new products with equivalent functionality, thereby mitigating the obsolescence risk."

7. Only use the 'L' word if you're really serious

Salespeople at SAP are used to customers threatening to leave their company for another vendor, but such tactics only work if they're not an actual bluff. "I don't mean to be Dr. Phil here, but to get out of a contract you need to be ready to leave," Wang said.

Also, if a customer's relationship with SAP has gotten bad enough that a breakup is possible, it's not likely to be truly repairable, he added.

"At the end of the day, you still pay them. You're in control. You're never truly captive. It is your own destiny," Wang said. "But the first rule is don't get into a relationship with a vendor unless you believe they're going to deliver on their promises."

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