When it comes to software acquisitions or other enterprise technology negotiations, why in the world would you want to identify a BATNA -- a "Best Alternative To a Negotiated Agreement"?
Because, if you don't, you will pay the absolute top price for your technology-related goods and services. In fact, the wise negotiator--the effective technology asset manager--has more than one BATNA. Essentially, what we're discussing here is the simple concept of having more than one choice of goods or serivce. If you have alternatives--and if you are willing to step away from your primary choice to one of those alternatives--you are going to discover a whole new side to effective negotiations. Read on for a few basic first steps.
Got Alternatives?
When you make an acquisition for your
company you will (I hope) first determine which product or
service the company actually needs--maybe even based on a formal business needs analysis. However, it is vital that you
also determine a secondary product or service in case you cannot
negotiate a favorable agreement for the primary. In fact, I even
recommend selecting a third level of product or service, just in case
the first two negotiations fail. Without this step in the process,
your suppliers are keenly aware that you “just gotta have” their
product—you have identified or considered no other options. They
become the sole source and, believe me, the attitudes, the price, and
the terms/conditions of the agreement will change accordingly.
Are You Committed?
The key to an effective BATNA process
is not merely that you perform the steps necessary to create a
BATNA—instead, the key is how committed you are to following up on
the second (or third) choice of product or service. If the company,
or the personnel involved in the acquisition, is/are not seriously
committed to moving on to your second choice, you will not gain the
leverage necessary to enhance the deal. When your company is
committed to moving on to an alternative product—and when you
clearly show your resolve to do so—your negotiations with vendors
will take on an entirely new level of productivity.
Got Money to Burn?
Whether you are a small local business
on a tight budget or a multi-national with millions to spend,
establishing—and using—a formal BATNA process can drastically
improve the respect vendors will show for your acquisition process.
“But, wait, there’s more…”
The BATNA will also translate into
more favorable contracts and cost reductions for your company. Whether you are purchasing software or hardware. Whether you are an expert in software asset management or technology asset management this single process, when added to your negotiation strategies, will enhance your credibility--both internally and with vendors.
Of course, if you would
rather pay more…
Let me know what you think. If
you want a follow-up or have any questions, this is the place to
ask—unless you would rather pay big bucks to some consultant for
the same advice.
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