Recently I had a great interview for Future Procurement Podcast with Mohammed Faridy. Mohammed was talking about technology spend reduction. Fantastic topic and a very valuable information from Mohammed, so definitely check it (here is the link).
And now I decided to share one article by Mohammed Faridy in my blog. I am sure you will like it.
Why You Should Never Take Software Supplier Deadlines Seriously
Have you ever had a software supplier breathing down your neck to get a deal done?
They find all kinds of ways to justify the urgency. I’m convinced they have people on their team whose sole job is to manufacture bogus deadlines and make them sound real.
Sometimes, the urgency gets the better of us and we make concessions that we shouldn’t make, in the interest of getting a deal done before the “drop dead date”.
But that’s a huge mistake. Because we all know supplier deadlines are meant to serve the supplier’s interests, not yours.
Suppliers aren’t always the one imposing a date to get a contract signed. Often times, internal stakeholders will also impose a hard date to get a deal done. Here again, it’s really important to listen to your stakeholders and ask questions.
“What’s going to happen if we don’t meet the date?”
The first thing that I always ask is, “What’s going to happen if we don’t meet the date?”
I once saw a VP screaming, he was actually screaming, at a procurement associate because he wanted to get a $100,000 PO cut by the end of the day for some software that he needed for his project.
This poor associate was so intimidated by the VP, that she just said, “okay,” and started working on the PO.
I didn’t work for the company. I was brought in as a consultant by the CFO to help reduce software spend. That is why I had no problem asking the VP, “what’s going to happen if we don’t get the PO out by the end of the day?”
Well, it turned out that there’d be no impact to the organization, other than this VP getting a little bit of egg on his face, because he’d gone out and asked the supplier to send him the software licenses and promised them a PO by the end of the day.
I called the supplier, and I told them that they would not be getting a PO until we’d had a chance to review and negotiate the license agreement.
When they complained about the fact that they’d already sent over the licenses, I explained to them that:
- They were under no obligation to send us any licenses without a PO. They chose to do that.
- Those licenses needed to go through an entire development and testing process, before we’d see any productive value out of them.
- I personally thought it was a bad idea for this VP to sole source this supplier for the project. I’d be happy to send the licenses back, and we’d open it up for an RFP.
Well, the last point really hit a nerve. Suddenly, this requirement for a PO went away.
This happens a lot with software. Software supplier wants to get their product in quickly, to avoid the RFP process. Also, suppliers are motivated by other factors, like quarter-end, and year-end.
It’s no secret that software sales people are some of the most well compensated in the sales industry. A lot of times, when they’re pushing for a deadline, it’s not to your benefit, it’s to theirs.
That’s the rule of software negotiations, never take a suppliers deadline seriously.
Get the 15 minutes video from Mohammed Faridy “3 Steps to Reduce Software Spend by up to 20%”