Archive for December, 2010

2011; how to grow without extra funding

December 30th, 2010

The recession may be over, but the pressure to cut costs still weighs heavily over many CIOs and IT departments. According to Gartner, IT budgets fell by 10% this year. But unlike 2010 when it was all about survival and keeping the lights on, the pressures in 2011 will be about growth without increased spend. There will be an increased focus on improving services while making savings with existing spend in order to balance the books.

IT’s job will be as much financial management as it will be to provide IT services.

Contact Silver Bullet Associates if you want some help identifying software savings opportunities.

Merry Christmas to everyone

December 23rd, 2010

So this is Christmas and how much have you saved….another procurement year over and a new one about to begin. Everyone connected with Silver Bullet Associates wishes all our clients (past, current and future) a very merry Christmas. And as the economy hopefully eases its way out of recession, let’s look forward to a better year for everyone in 2011. May all your software negotiations be successful.

8 More Tips For Getting A Good Deal In Software Negotiations

December 16th, 2010

#1. Don’t spill the beans. Often, vendors talk to people at buying companies before the negotiations start, then gear the negotiation to the budget. The business ends up thinking they got a good deal, when they may have got another 20% off.

#2. Use your leverage. Let the vendor know it has a credible competitor, but not who it is. It’s also crucial that the negotiator understand the marketplace climate and the relative importance of the deal. Buying a large package from a vendor that’s coming off a poor financial quarter can work to your advantage. A vendor trying to break into your vertical industry may be willing to discount a product to get a foothold in a new area.

#3. Form the negotiating team early. Nothing kills more deals than bringing in the team at the last minute, but that’s what happens about 80% of the time. Too many companies think of contract negotiations in terms of price, when that’s a small component of the deal. Today, people are focused on price, but the risk and investment are a lot higher on the implementation agreement.

#4. Future-proof the deal. What happens if the vendor goes bankrupt, gets acquired, or doesn’t live up to the contract’s terms? Future-proofing a contract gives your business rights. First, escrow the software’s source code. Most times, when a business licenses software, they only get the object code, not the core source code. An escrow clause in the contract lets businesses obtain the core source code should the vendor go bankrupt or sell its assets.

#5. Take advantage of the here and now. Use current negotiations to get better prices on future software purchases. You may be able to get a deal for additional products purchased within the next few years at a pre-specified discount.

#6. Beware of hidden fees. Does your business have the right to relocate the software without penalty? If you need a copy of the software to test a disaster-recovery plan, are you required to pay full price for another license? Such hidden costs can add up to significant extra unbudgeted spend.

#7. Customisation can bite you in the end. Be as specific as possible about what’s being customised and how it should function. If you’re not very clear, the vendor won’t build it right. Vendors often will include a provision that says if a company doesn’t accept or reject the customization within 45 days, the customization is automatically accepted. That shouldn’t be the way it works. A company should have the right to refuse a customization whenever it doesn’t function properly.

#8. Know your definitions. How are you defining a user, a partner, or a customer?

Oracle awarded $1.3 billion in damages in SAP lawsuit

December 9th, 2010

There goes the bell…..

A jury has awarded Oracle US$1.3 billion in damages in its corporate theft lawsuit against SAP, a blow to the German applications vendor, which had argued it should pay no more than $40 million for the software stolen by its TomorrowNow subsidiary.

Oracle said it was “the largest amount ever awarded for software piracy.” Members of its legal team embraced as the verdict was read in the U.S. District Court in Oakland, California, according to a person in the courtroom. Closing arguments had been presented Monday afternoon, so the jury took less than a full day to reach its decision.

It was not the full amount Oracle had asked for, but still considerably more than SAP had said it should have to pay. Oracle CEO Larry Ellison testified two weeks ago that SAP should be made to pay as much as $4 billion to cover the cost of the stolen software.

Round 1 to Larry.

How to make IT procurement environmentally friendly

December 1st, 2010

When it comes to reducing some of the catastrophic problems caused by redundant IT, what matters is what’s in it, and how it’s put together. A company’s end-of-life processes are crucial when it comes to reducing the amount of kit that gets sent to landfill or illegally exported, but it is at the procurement stage where IT managers can flex their consumer muscle and help to bring about changes in the way IT is manufactured.

There are two ways for an organisation to introduce environmental elements to an IT procurement process. It could either research and write its own environmental requirements, or it could stipulate that the successful supplier will be a member of an environmental scheme such as Epeat, which rates electronic products according to their environmental attributes.  The idea is that each supplier will adhere to a certain standard of ethical manufacture, meaning buyers know how green the products are.

Large corporates and government organisations are often aware of the legal pitfalls of hazardous waste and of the PR nightmare that can ensue if you’re caught, and they deal with it properly as a result.”But small businesses who buy maybe 200 to 500 computers a year don’t have this reputational pressure. They might not realise they have liability.

So the message here is be careful, be diligent and check your supplier’s green credentials before accepting delivery of that next batch of hardware.