This Executive Brief is available only to Outsourcing Excellence members. For information on membership, please contact us Negotiation is an important part of the strategic sourcing process, both in the context of new deals and renewals. It enables an equitable legal agreement between the enterprise and the provider(s). This Executive Brief describes how organizations can develop an effective negotiation strategy and execute it to achieve their sourcing objectives. It examines key points to consider, common misconceptions, the role of equitable terms to incentivize services delivery, components of an interest-based negotiation strategy, and a case study on how a large company negotiated with its largest services supplier. Scope All industries and geographies Contents This report examines the: Importance of negotiation in the strategic sourcing process Components of a well-structured negotiation strategy Key negotiation myths Note: Everest Group publishes executive briefs for senior executives from enterprises. These briefs address hot industry topics and particularly challenging issues of the day in an easy-to-digest format.

This report is available only to Outsourcing Excellence members. For information on membership, please contact us E-auctions are a powerful tool leveraged by the procurement function to drive cost pressures in competitive negotiations. Traditionally, e-auctions were used to source simple services or goods; today, they are becoming increasingly popular in the services outsourcing space. In this executive brief, Everest Group analysts share the benefits of using e-auctions for outsourced services, deep-diving into the process and best practices for running an e-auction effectively, and the pros and cons in conducting such events. Everest Group publishes executive briefs for senior executives from enterprises. These briefs address hot industry topics and particularly challenging issues of the day in an easy-to-digest format.

As a sign of outsourced IT and BPO services maturity, Everest Group has observed contract benchmarking clauses being diligently invoked at regular intervals. Over the years, a corresponding proliferation in benchmark providers has also been observed that promise to help evaluate and optimize contracts. However, the focus of most benchmarking / contract review exercises tends to be on the directly “visible” levers such as resource unit rate cards and delivery mix alignment. There are a number of levers that remain hidden and are often ignored, resulting in untapped optimization potential. This viewpoint outlines some of the common obscure “choke points” that buyers need to be aware of, in order to avoid significant value leakage in contracts. CONTENTS This report provides an overview of the typical optimization levers that remain “hidden” in contracts, resulting in significant untapped optimization potential. The key sections of this viewpoint include: Factors causing value leakage in outsourcing contracts Typical sources of these choke points Proposal vs. solution approach Lack of contract “right sizing” Misaligned productivity charter Inequitable contract T&Cs Conclusion Key questions addressed by this research are: What are the typical factors that remain hidden in IT and BPO contracts, resulting in value leakage? What are the typical sources of these choke points? How can buyers avoid the negative impact of these choke points?