How do you use benchmarking and market research to gain leverage in software contract renegotiation?

1 Benchmarking your current software spend

The first step in preparing for a software contract renegotiation is to benchmark your current software spend against industry standards and best practices. Benchmarking can help you identify areas where you are overpaying, underutilizing, or misaligned with your business goals. You can use various sources of benchmarking data, such as SAM tools, peer groups, industry reports, or third-party consultants. Benchmarking can also help you set realistic and achievable targets for your renegotiation, based on your current and projected software usage and value.

2 Market research on vendor alternatives

The second step in preparing for a software contract renegotiation is to conduct market research on vendor alternatives and competitors. Market research can help you understand the current and future trends in the software market, the strengths and weaknesses of different vendors, and the potential opportunities and threats for your organization. You can use various sources of market research data, such as online reviews, analyst reports, case studies, or demos. Market research can also help you create a backup plan in case your preferred vendor is not willing or able to meet your renegotiation expectations.

3 Leveraging your benchmarking and market research data

The third step in preparing for a software contract renegotiation is to leverage your benchmarking and market research data to build a strong business case and negotiation strategy. You can use your benchmarking data to highlight the gaps and inefficiencies in your current software contract, and to propose realistic and reasonable adjustments that will benefit both parties. You can use your market research data to demonstrate your awareness and interest in vendor alternatives, and to create a sense of urgency and competition for your preferred vendor. You can also use both types of data to support your arguments with facts and evidence, and to counter any objections or claims from the vendor.

5 Negotiating with your vendor

The fifth step in preparing for a software contract renegotiation is to negotiate with your vendor in a confident, flexible, and creative way. Negotiation is a dynamic and interactive process that requires skill, patience, and perseverance. You should negotiate with your vendor based on your priorities, objectives, and alternatives, and not on your emotions, assumptions, or fears. You should also negotiate with your vendor based on the value and outcomes of the software, and not on the price and features. You should also negotiate with your vendor by exploring different options and scenarios, and by finding common ground and trade-offs that will satisfy both parties.

6 Finalizing your software contract

The sixth and final step in preparing for a software contract renegotiation is to finalize your software contract in a timely, accurate, and compliant way. Finalizing your software contract can be a complex and tedious process that involves legal, technical, and operational aspects. You should finalize your software contract by reviewing and verifying all the terms and conditions, by ensuring that they reflect the agreed-upon changes and outcomes, and by resolving any discrepancies or disputes. You should also finalize your software contract by signing and storing it securely, by communicating it to all the relevant stakeholders, and by monitoring and managing it throughout its lifecycle.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?