IT vendor negotiation support for divestitures and mergers.
Divesting a large business unit? Merging two large enterprises together? In either case, there are a lot of moving parts to be rearranged. There is extra work required of almost every business function, and a C-suite-mandated deadline. Meanwhile, the normal day-to-day work has to get done.
IT is one challenging and time-consuming area where NPI can take on a big part of the burden.
When a large business unit is divested, you need to split IT assets that span hundreds of vendors and hundreds, perhaps thousands, of individual products, subscriptions and services. And if the divested entity won’t need certain assets, you need to reduce your footprint. In some cases, you have to provide post-divestiture transition services for a period of time.
The fact is, most of your IT vendor agreements don’t allow for unfettered assignments, transfers, transition periods or commitment reductions – you need to get the vendor’s approval. And most vendors view each approval as a revenue opportunity.
Once the desired future-state IT asset allocation plan has been defined, there is a stunning amount of information management, process control, cost-mitigation analysis, negotiation and contract work to be done. It’s nitty-gritty work that takes time and requires a specific skill set. This is where NPI steps in.
NPI is uniquely qualified to augment your team so you can rationalize your IT portfolio and meet your deadlines. For over 19 years, we have helped our clients deal with enterprise IT vendors all day, every day. We know how vendors behave at the negotiation table. We know whether they’re offering a fair deal. We speak their language, and we understand their licensing and subscription documents. For NPI, this is just another flavor of transaction-level IT purchase optimization.
NPI has a proven approach to divestiture-driven IT asset rationalization that helps you complete negotiation with IT vendors on time, and get the best deal. Here is a high level summary of the process:
Throughout the project, NPI seeks material opportunities to drive additional value including market-based pricing/cost targets, value-added terms and conditions, and other relevant recommendations.
NPI performs project coordination and provides status updates, issue resolution and leadership team updates.
In a merger scenario, the challenge is different but the required skill set is the same. Merging entities each have their “top 10” enterprise IT agreements that represent a significant portion of IT spend. Usual suspects include Microsoft, Oracle, SAP, IBM, CA Technologies and Salesforce.com.
At a certain point in merger talks, it becomes necessary to assess the overlap for large-spend IT vendors. And if the merger goes through, it becomes necessary to negotiate new or amended agreements with those vendors. NPI can help on both counts.
NPI helps clients optimize enterprise agreements with Microsoft, Oracle, SAP, IBM, CA Technologies, Salesforce.com and many more. In large enterprise merger scenarios, an initial assessment phase usually happens as part of due diligence. In this phase, NPI will:
Once the merger goes through, NPI’s enterprise agreement optimization services come into play. While there are some additional complexities and leverage opportunities in merger scenarios, the approach is the same.
NPI has a long history of IT price benchmark analysis, licensing optimization, vendor-specific negotiation intel and direct negotiation experience that makes us uniquely qualified to help clients with divestiture and merger IT rationalization. We understand transaction-level IT purchase optimization, how to get you the best deal and how to manage a high volume of purchases on a timeline.