Still Your Problem

Ertel says CIOs are the perfect example of people who have to care about implementation. There are virtually no deals a CIO does that are simply "done" when they are signed. He suggests some CIOs made that mistake years ago with outsourcing, thinking that meant that network management or desktop support or application maintenance was now someone else's problem. "They quickly learned that if your service provider fails, you fail. The fact that the contract entitled you to cause the service provider pain didn't necessarily mean that they could deliver what you and the business needed."

To take this lesson to heart, Ertel says CIOs must reassess the way the teams leading their negotiations work and suggests six winning tactics.

1. Recognize that the deal is only a means to an end, and keep your eye on the business objectives. A key example of this arises in SLA negotiations: The point is not to get agreement on a set of metrics and to be able to apply penalties when the service provider fails to meet them. The point is to provide the business with the IT support it needs to be competitive. Make sure the way your teams negotiate the deal supports, rather than hinders, the real purpose of the deal.

2. Consult broadly with stakeholders. Too many negotiators try to "limit the number of cooks in the kitchen" only to find that the deals they negotiate fail when critical stakeholders don't support its implementation. This is not to say that you want to give every user a veto over the deal. But you need to make sure that the negotiators treat alignment on their side (and making sure the vendor is also getting the buy-in they need on their own side) as essential deliverables, not something for someone else to worry about later.

3. Create the history needed for implementation. In IT implementations, buyer and vendor teams are always negotiating - about scope, about timing, about service levels, and more. Think about how you want those future negotiations to proceed, what kind of precedent would suit you best, and how you might create that precedent at the table. Is it that whoever has the biggest stick wins? Is it that whoever is less pressed for time can just wait the other one out? Or is it that you jointly explore industry standards and best practices and apply them? Or that you engage in collaborative brainstorming and consider multiple options before committing to one? What about information sharing and transparency? What about the way you escalate and deal with conflict?

4. Engage in joint risk management with the vendor. When negotiators fail to put perceived nightmares on the table, those nightmares become things to defend against unilaterally by insisting on particular contractual provisions or by withholding information. In Ertel's experience, skilful raising of these issues in a collaborative way helps the parties better assess the likelihood of the problems, as well as develop more effective prevention and mitigation strategies. Certainly CIOs should insist that during preparation negotiation teams identify critical implementation risks, and assess which of those might be more effectively managed jointly with the vendor rather than unilaterally, and consider how to get those on the table at the appropriate time, he says.

5. Avoid extracting pointless commitments. It's nice to get the other side to agree to fly to the moon and back for your business. But when you know you are asking them to commit to something they have never been able to do before, under conditions no one has worked before, on a timeline so aggressive and a budget so thin that you are amazed they would even consider it . . . Stop. Those concessions you are getting are not "wins". They are future problems. As the manager of this deal team you need to bring your experience and maturity to bear. Make sure your commitments and theirs are realistic.

6. Insist on a well structured hand-off. No matter how long they spend putting the deal together, negotiators on both sides are often rushing off to the next deal. And with them goes a lot of knowledge about why the deal was done the way it was done, what trade-offs had to be made, what issues were left to be resolved later and why. Announce early on that you expect a joint briefing from both negotiation leads to both sides' implementation teams, and make sure it happens. (And, Ertel says, the knowledge there will be a joint briefing later will have a very healthy effect on what happens during the negotiation as well.)

The best negotiators prepare systematically, Ertel says. "Just like it is true that you implement the way you negotiate, we also find that you negotiate the way you prepare. Ineffective negotiators walk into the room and wait to see what the other side has to say. Or they prepare their opening move and think about the concessions they are willing to make. Neither approach prepares you to engage in effective problem solving, to come up with innovative solutions, or to apply relevant norms and standards.

"The best negotiators spend time in advance considering and prioritizing their own interests and making educated guesses about those of their counterparts. They invent multiple options that address both sides' interests and they research relevant objective criteria and they look for lessons to be learned from different industries. They think hard about their walk away alternatives or BATNA (the best alternative to a negotiated agreement)." (In negotiation theory, BATNA is the course of action that will be taken by a party if the current negotiations fail and an agreement cannot be reached. A party should generally never accept a worse resolution than its BATNA.) Careful preparation pays off with noticeably better deals.