Internal negotiation team - why is it important?
It is crucial for an organization to set up an internal negotiation team when negotiating a new contract with Microsoft to avoid unnecessary high costs and risks. Software licensing agreements have become increasingly important as companies rely more and more on technology to drive their businesses. These agreements can be complex and confusing, and the stakes are high.
Top reasons to set up a negtotiation team?
1. Better understanding of licensing needs
Firstly, an internal negotiation team can help a company to better understand its software licensing needs and negotiate more effectively with Microsoft.
The team can work with business units across the company to identify the software that is necessary for their operations and develop a strategy to ensure that they are getting the best value for their investment.
This understanding of the company’s software needs and a well thought out negotiation strategy can help the company to negotiate better contract terms with Microsoft.
2. Manage the negotiation process
Secondly, creating an internal negotiation team can help a company improve management of the negotiation process. This can help to ensure that the company is properly represented during negotiations and that its interests are protected. It can also help to ensure that the company is fully prepared for negotiations, including having all necessary documentation in order and being aware of any potential issues that may arise.
Microsoft will often try and escalate to higher level management. By setting up your negotiation team and aligning it internally within your organization, you can dictate that Microsoft needs to talk to that specific team. Higher management can easily respond to Microsoft stating that they have to talk to the team as they are fully mandated to negotiate on behalf of this organization.
3. Guarding documentation & timelines
Thirdly, besides managing all necessary documentation, a negotiation team will also keep an eye on deadlines and the entire process. This can help avoid unnecessary delays in the renewal process, ensuring that the company’s software licensing agreements are in place when they are needed.
4. Reducing costs
Finally, an internal negotiation team can help to reduce costs associated with software licensing agreements. By negotiating better terms with Microsoft, a company can save money on software licensing fees and avoid any potential penalties for being out of compliance with licensing agreements. This in turn helps improve a company’s bottom line and enables investment in other business areas.
To get the best value for your software investment you need to set up an internal negotiation team and work out a strategy before renewal negotiations start. A dedicated team can:
- Negotiate an agreement
- Enhance understanding of a company’s software needs
- Manage the negotiation process effectively
- Ensure a streamlined and smooth negotiation process
- Reduce licensing spend
What’s next?
Once the negotiation team has been set up, they will need to work out the best strategy. Negotiating with Microsoft is a complex process and it’s essential to get it right.
One of the main things the negotiation team needs is a thorough understanding of the baseline and business needs. What Microsoft products and services do you need? What features are essential? For this, you need to know what products and services you already have in-house and what you are actually using. Knowing exactly what you have will give you a strong negotiation position, as you do not want to pay for things you do not need. Optimization is key!
The negotiation team will also need a solid understanding of Microsoft pricing and licensing options. You need to know what is possible and what is not. Microsoft has so many different licensing models and contract types – it takes time to figure out which option will work best for your company.
Our advice is to not use Microsoft Partners to support you in your negotiations, as they have ulterior motives to push a certain narrative, such as a rebate from Microsoft or a higher margin on a certain contract type. Make sure you understand what your options are or leverage an independent party that is working solely for you, and not for itself.
Our optimization & negotiation services
LicenseQ provides a wide range of optimization and negotiation services, visit our Contract negotiation support page. Our team of experts can help you navigate the complexities of Microsoft licensing and ensure that you have the right strategy to meet your business needs.
With LicenseQ’s guidance, you can optimize your software investments, save costs and drive your business forward. Contact us at info@licenseq.com, without obligation. Talk to one of our experts now!
