NEGOTIATING WITH STRATEGIC SUPPLIERS

Overview of Training:

Negotiating with Strategic Suppliers is strategic training for IT and business professionals designed to help organizations develop comprehensive Pricing Game strategies designed to maximize the value captured with incumbent suppliers determined to maximize revenue and profit of their customer base. The program delivers a new deal making process and action plan to successfully align the efforts of internal decision makers.

Attendees will gain visibility into key supplier spending events through documenting plans with the program’s V.A.L.U.E. Guide Scorecard. This involves first identifying all key players in buyer and seller organizations, understanding each player’s degree of influence and motivations, discovering key buying and selling information and focusing on the sources, creation, and use of leverage during buying campaigns. Buying organizations will be equipped to evaluate their deal-making position, address the business and personal motives of each decision maker and define the optimal deal-making game plan.

Negotiating with Strategic Suppliers significantly improves the odds of winning the Pricing Game. It gives organizations a common process and language for pursuing savings opportunities and criteria for allocating resources to determine when to walk away from deals that fail to improve long-term economics. The key to Pricing Game success is learning how to focus time and energy on the deal-making elements that make an economic difference and avoid the traps set by incumbent suppliers to gain control of every deal and relationship.

Best Practices for Avoiding the High Cost of Incumbency

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“I was able to immediately put the methodology to use in developing a buying strategy for a large investment with a key supplier. Negotiating with Strategic Suppliers helped to align the efforts of several internal groups to minimize the influence of the incumbent sales team and capture value we had left unclaimed for years.”

Attendees will learn how to:

n Use the 5 best practices for setting up the negotiation with incumbents

n Gain more visibility into the pricing practices of long-term suppliers

n Win the negotiation across the 4 stages of the sales process

n Create and maintain leverage across the deal life cycle

Registration InformationPrice: $475 (group discounts available)

Website: clearedgepartners.com/seminarPhone: 617-527-2022

Wednesday, April 23, 2014Platinum Hotel 211 E Flamingo Rd, Las Vegas, NV

When: 8AM - 5PM Where: Classroom Opal

SVP of IT, Financial Services

Attendees will take away:n Custom built Strategic Supplier Playbook & Deal Workbook

n Opportunity Scorecard with Action Plan on attendee’s current deal

NEGOTIATING WITH STRATEGIC SUPPLIERSBest Practices for Avoiding the High Cost of Incumbency

© 2014 ClearEdge Partners, Inc. Confidential & Proprietary Information Do Not Distribute

- Overview of the peaks and valleys in the days and careers of sales professionals- Sales professionals are hired for specific traits, attitudes, and competencies- How McClelland’s Needs Theory defines the hiring criteria for sales teams- Why sales teams and sales management measure success, beyond revenue- Top 20 rules by which all strategic sales professionals operate - Motivations used by sales management to ensure success and deal certainty- How sales management designs and inspects compensation packages

- Role playing exercise pitting teams in pairs in a high stakes negotiation - Buyers and sellers are prepared with individual motivations and goals - Lessons leaned discussion about why each team yielded individual results- Overview of the buyers’ and sellers’ motivations for a deal- Case study based on of previous workshop results, and discussion on the reasons why variation of pricing exists and results of each outcome

- The Compelling Event is the single greatest influence on purchase price- Outline the types of buyer and supplier compelling events- Discussion of how the compelling event affects sales teams goals and motivations- The value of critical information in the eyes of the sales professional- Strategies and tactics sales teams use to extract information from buyers- Strategies buyers can use to discover the underlying deal drivers for stakeholders and business groups before the sales team

- Overview of how sales teams compete during all stages of the negotiation- Real world examples of the fluid nature of suppliers pricing decisions- Examples of expert negotiation skills found in normal day-to-day life- How sales teams use multiple avenues to extract information from inside an account- Discussion of the perception of value and how quickly it can change- Top 7 closing techniques used by seasoned sales professionals- How to request and accept supplier concessions- Insight into the personality traits of the best deal-makers- Strategies to prepare the buying team for the next deal

Engaging the Sales Process:

Controlling the Critical Information:

Negotiations Workshop:

Meet Your Sales Counterpart:

PRICING OUTCOME

$12M Pipeline(20% close rate)

$2.4 M Goal

40 opportunities ($300k average deal size) 320 total visits (1/8 visits produces an opportunity)6 visits per week  (320/52 weeks)90 prospecting phone calls per week(15 phone calls / 1 visit)18 prospecting phone calls per day(6 visits * 15 phone calls)

ROADMAP

STRATEGIC SELLING PROCCESS

NEGOTIATING WITH STRATEGIC SUPPLIERSBest Practices for Avoiding the High Cost of Incumbency

© 2014 ClearEdge Partners, Inc. Confidential & Proprietary Information Do Not Distribute.

Defending Against the Sales Game:

Battling Supplier Incumbency:

- Introduction to the Pricing Game and Value-Based Pricing Systems- Sales teams reinforce a deliberate lack of transparency in IT Pricing- Supreme Court Case example of Value-Based Pricing Systems at work- Theory behind the value of sales targets within buying organizations- Sales strategies drive new marketing strategies to support supplier’s unified efforts- Sales training and sales systems provide extremely high ROI

SALES TARGETS & TACTICS

© Copyright 2013, ClearEdge Partners, Inc. Confidential & Proprietary Information. Do Not Distribute.

The Pricing Game

“Our job is to figure out what we have to bid to win the deal. No magic here.”— Oracle CEO Larry Ellison, testifying In U.S.A. vs. Oracle Corporation

ORACLE CUSTOMER EXPERIENCE

Average Discount 73%

90%

100%

80%

70%

60%

50%

40%

30%

Discount Level

Oracle

VALUE BASED PRICING

- Introduction to the 5 Sales Strategies employed by suppliers- Understanding how sales teams are compensated provide insight into their motivations to build valuable franchises within client organizations- One of the primary goals for sales teams is to make the actual negotiation a non-event- The process is a team game with both sales and delivery playing major roles- Sales systems assess opportunity and drive predictable revenue streams and risk

SALES TARGETS & TACTICS

© Copyright 2013, ClearEdge Partners, Inc. Confidential & Proprietary Information. Do Not Distribute.

Strategic Selling Tools

FrontalFrontal

FlankFlank

FragmentFragment

FortifyFortify

FeignFeign

FIVE SALES STRATEGIES

- Franchise: a segment of a particular customer’s spending that is or is thought to be - controlled by a particular supplier- Unchallenged technology standards eventually become high value franchises- Incumbent suppliers are actively focused on eliminating competition from accounts- Sales teams evolved from hunting for new business to nurturing high value accounts- Develop a deal plan throughout the workshop, using V.A.L.U.E. Guide Workbook

Building Franchises

Technology

TYPES OF FRANCHISES

- An incumbent supplier is the current preferred choice for a technology or service- As incumbency increases, the “pricing gap” widens over time- Maintenance revenues are key components of incumbent suppliers’ profitability- Information is a critical component for playing the pricing game with incumbents- Strategic partnerships are defined differently by buyers and suppliers

Defining Incumbency

Supplier Recurring Revenue

Recurring Share of Revenue

Gross Margin (Recurring)

License Revenue

License Share of Revenue

CA $1.4B 98% 92.1% $25M 2%

Oracle $4.1B 74% 91.1% $1.5B 26%

SAP $1.7B 81% 79.4% $418M 19%

Symantec $1.2B 81% 81.9% $273M 19%

VMware $470M 65% 69.5% $257M 35%

“Our license renewal business, sometimes called maintenance, software maintenance, is now approximately half of our business and that’s an extremely high margin business and it continues to grow in a very healthy fashion, so that’s a reshaping of our business, where the highest margin portion of our business is now also the largest portion of our business."

- Oracle CEO Larry Ellison, Q1 2009 Earnings Call,

Maintenance Drives Revenues

VENDOR ANNUITY STREAMS

- Valuation: Who is in control?- Awareness: What is the important information to protect?- Leverage: What are the sources of pricing power?- Uncertainty: What is our plan to protect information?- Event: How do we plan to execute?

VALUE GUIDE WORKBOOK

Playbook Development:

How Your Organization Will Benefit:

Enable the Buying Team to:

n Identify sources and uses of leverage, to position buying strategies accordingly n Analyze each stakeholder’s needs and opportunities to determine potential for deal making flexibility n Re-capture the deal making initiative from incumbent sales teams seeking to close business at each quarter end n Allocate limited deal making time on breakthrough value capturing opportunities

Enable Management and Senior Leadership to:

n Employ a common language to discuss the status of buying opportunities and establish next steps n Quickly identify opportunities that are worth the investment of limited resources n Collect and share best practices from top performers with the rest of the team

© 2014 ClearEdge Partners, Inc. Confidential & Proprietary Information Do Not Distribute. Page 2

About ClearEdge PartnersClearEdge Partners gives organizations a new methodology and innovative services to level the playing field with their large IT suppliers and drive deep, long-term hard-dollar savings on 3rd party IT spending. The ClearEdge V.A.L.U.E. Guide™ enables clients to take a more strategic approach to IT procurement and improve pricing performance across major IT solution categories.

Phone: (617) 527-2022Email: education@clearedgepartners.comWeb: www.clearedgepartners.com

ClearEdge Partners, Inc.385 Elliot Street, Suite ENewton Upper Falls, MA 02464

Who Should Attend Negotiating with Strategic Suppliers:

Any member of the organization involved in the buying process of direct and indirect goods and services from large incumbent suppliers from senior executives to business line management, technical leaders, procurement and sourcing professionals, should be involved in the implementation of a consistent Pricing Game process. This is an effective way to collaborate among those who are in decision-making, recommending or execution roles to improve the speed, accuracy and effectiveness of communication about buying opportunities.

Delivery Options: n Regularly scheduled live public programs (1-day) n Tailored on-site live programs (2-day) n Quarterly training sessions as included in Advisory Agreements

On-line Portal: V.A.L.U.E. Guide Scorecard

The V.A.L.U.E. Guide tool to help organizations develop cross-functional supplier playbooks focused on maximizing the return on investment for complex solutions and services. This online tool serves as a checklist to ensure organizations execute best practices for playing the Pricing Game with the most entrenched suppliers.

The V.A.L.U.E. Guide will be made available to all attendees for a one-year period at the conclusion of Negotiating with Strategic Suppliers.