Published: 25 February 2022
Negotiating products, pricing, capabilities and terms of a new SaaS deal for the initial term is crucial, and will set a precedent for the entire subscription life cycle. SPVM leaders should exploit the three key actions in this research when preparing to negotiate new SaaS deals.
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Sourcing, procurement and vendor management (SPVM) leaders who do not articulate the basis to successfully negotiate to their stakeholders, risk negotiating with inadequate planning, thereby limiting potential leverage, which can expose their organization to unbudgeted costs.
Without utilization of competitive pressure as leverage, SaaS customers often find agreements with their providers lack flexibility and generally contain less value.
Without applying effective leverage in the initial term, SaaS customers often find their pricing to be comparably higher than peers, resulting in substantial uplift at renewal.
SPVM leaders negotiating new SaaS agreements should conduct the following actions to reduce cost and risk:
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