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Optimizing Budget and Contract Terms for

by Robert Desisto  |  January 7, 2015  |  Comments Off on Optimizing Budget and Contract Terms for

Gartner has recently published two important research best practice frameworks that will help procurement professionals, and IT supporting sales and service professionals negotiate contracts, and select the most cost effective services to meet their company’s needs. The first research framework, Key Terms to Negotiate in Your Master Subscription Agreement, focuses on specific terms and conditions Gartner has seen clients neogitate with  The second research framework, Navigate Salesforce Pricing and Packaging to Optimize and Effectively Budget Cost, helps clients navigate the mutliple cloud application editions and potential add-ons to insure you are not overbuying capabilities that are outside the scope of your requirements.  As we enter the end of’s fiscal year both of these research notes addresses a number of key challenges Gartner has found our clients are faced with when negotiating their contact.

The following are key challenges Gartner has identified and addressed in these research frameworks:

  • Buyers of Salesforce subscriptions struggle to calculate the correct capacity (for example, storage, objects and tabs) requirements to determine the most appropriate Salesforce cloud edition. If your estimate is too low, you could get billed for exceeding capacity; if too high, you have overbought, and it will be very difficult to downgrade your edition on a renewal.
  • Negotiators struggle to determine the required level of customer support before signing, which can cost as much as 15% to 25% to an Enterprise Edition subscription when added later.
  • The lack of industry-specific process functionality in the Service Cloud offering can lead to an additional 25% or more in costs above the software subscription costs to achieve the desired software capabilities.
  • Buyers of subscriptions who do not negotiate renewal price protections, descriptions of the editions with rebundling protections, and the ability to do at least one renewal using the same pricing metric will see significant increases in costs before the second renewal.
  • Buyers of services struggle to negotiate key terms, such as SLAs, with meaningful remedies if these are missed.
  • IT procurement professionals are not always involved in negotiations, and without T&Cs or negotiation checklists, business executives may not be aware of the specifics in order to negotiate well to protect the organization.

If your company is the middle of negotiating a contact with this is must read research!

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Category: crm  salesforce-automation  salesforce-com  vendor-contracts  

Tags: customer-service  force-com  salesforce-automation  salesforce-com  

Robert P. Desisto
VP Distinguished Analyst
14 years at Gartner
24 years IT industry

Robert Desisto is a Vice President and Distinguished Analyst in Gartner Research. He is responsible for managing the software as a service (SaaS) research agenda. His research focuses primarily on the use of SaaS as a delivery model for applications. Read Full Bio

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