Outsourcing Contract Negotiations - Structure, Process & Tools

  • 4,413 views
Uploaded on

Processes, tools and techniques used to manage the negotiations of an outsourcing contract. Presented to the healthcare specific interest group of PMI in July 2009

Processes, tools and techniques used to manage the negotiations of an outsourcing contract. Presented to the healthcare specific interest group of PMI in July 2009

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
4,413
On Slideshare
0
From Embeds
0
Number of Embeds
1

Actions

Shares
Downloads
0
Comments
0
Likes
2

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Structure, Process and Tools A PMI Webinar July 2009 Ken Nowlan Chief Information Officer BC Transmission Corporation © Corium Consulting Services Ltd. 2009 1
  • 2. Purpose To give you an overview of processes, disciplines and  tools with which you will be able to plan and manage  the negotiation of a healthcare IT agreement © Corium Consulting Services Ltd. 2009 2
  • 3. Scope Consider a negotiation as a project The PMI Project Management Processes Initiation Planning Execution Monitoring and Controlling Completion The “hard” skills © Corium Consulting Services Ltd. 2009 3
  • 4. What You’ll Learn The structure of a typical healthcare IT contract and how  to use that structure to determine the structure of the  teams responsible for negotiating your agreement The logistics of the negotiations environment How to identify and document the key issues to negotiate The lifecycle and process for managing negotiating issues How to understand and document your range of  reasonable and acceptable negotiation outcomes  How to develop a negotiating plan that will tell you what  you will have to negotiate and when © Corium Consulting Services Ltd. 2009 4
  • 5. What You Will Learn  (continued) How to ensure that the appropriate skills and knowledge are at the  negotiating tables at the right time How to ensure that you and the other members of the negotiating  teams are ready for each negotiation session and understand what you’ve agreed to How to track outstanding issues and final agreements on individual  issues How to ensure that your legal counsel, responsible for drafting the  agreement, gets what you agreed to How to ensure that the agreement is signed, and that all loose ends  are tidied up A toolkit is available to assist you in negotiations planning and  management © Corium Consulting Services Ltd. 2009 5
  • 6. Structure Your Project (Negotiation) © Corium Consulting Services Ltd. 2009 6
  • 7. Understand The Outcome The Contract Structure “The Agreement” The Master (Services) Agreement Services Schedules Non-Services Schedules Appendices © Corium Consulting Services Ltd. 2009 7
  • 8. The Master Services Agreement Purpose Contents (continued) To describe the overarching terms and  Overview of the process for  conditions of the agreement charges, invoicing, payments Unlikely to change during the term of  Privacy and security overview the agreement Audit and reporting Examples of Contents Process for making changes to the  Objectives, key strategic understanding,  agreement scope Default and termination Start date, term, extension, renewal,  Indemnification and limit of  termination liability Definitions Dispute resolution mechanism Overview of the products and services Force majeure Overview of warranties, service levels  Subcontracts and subcontractor  and SLAs matters Intellectual property matters © Corium Consulting Services Ltd. 2009 8
  • 9. Services Schedules Purpose Contents (continued) To describe the terms and  Responsibilities relating to the  conditions, and respective  installation, operation, updating   responsibilities of the parties, for  and replacement/retirement of  each of the individual services  datacenter equipment covered within the scope of the  Responsibilities related to the  agreement specification, development,  May be adjusted slightly during the  maintenance and support of  term of the agreement software Examples of Contents Licensing terms for packaged  Responsibilities related to moves,  software adds, changes, deletes of  desktop  Responsibilities relating to the  equipment operation of a client service desk Responsibilities related to  Responsibilities relating to  installation, configuration, updating  architecture, design and/or  and retirement of software functional specification  development © Corium Consulting Services Ltd. 2009 9
  • 10. Non‐Service Schedules Purpose Contents (continued) To describe in detail, aspects of the  Key Positions agreement which are related to, but  Form of Change Requests not explicitly services Termination Fees May change periodically throughout  Governance the term Form of Certificate of Insurance Examples of Contents Detailed Privacy Obligations Detailed Charges Reporting Organizational Structure Brand Permissions Application and Operating Software  Form of Employee Non‐ Lists Disclosure Agreements Service level metrics and values Form of the Invoice Standards to Follow Facility Locations © Corium Consulting Services Ltd. 2009 10
  • 11. Appendices Purpose Contents (continued) To provide miscellaneous  List of hardware and  information relevant to the  configurations transferred to  agreement outsourcer Unlikely to change or be updated  List of initial software  during the  term of the  parameters or configurations agreement Typically not negotiated Examples of Contents List of statutory holidays List of initial software licences Change order forms © Corium Consulting Services Ltd. 2009 11
  • 12. Negotiations Governance Key Roles Sponsor Steering Committee (Internal) Steering Committee (Joint) Chief Negotiator Master Negotiating Team Schedules Negotiating Teams Legal Counsel Scribe(s) Logistics and Administrative Support © Corium Consulting Services Ltd. 2009 12
  • 13. © Corium Consulting Services Ltd. 2009 13
  • 14. Steering Committees Internal Joint Purpose – to guide the  Purpose – to guide the  chief negotiator and the  relationship being built  negotiation teams through the negotiations Meetings – Weekly, or as  Meetings – Bi‐weekly, or  necessary as necessary Membership – Sponsor,  Membership – Vendor  key stakeholders, chief  Executives, Sponsor, Chief  negotiator Negotiators (ex‐officio) Chair ‐ Sponsor Chair ‐ Alternating © Corium Consulting Services Ltd. 2009 14
  • 15. Key Roles Sponsor Legal Counsel Will “own” the outcome Provides legal advice to sponsor and  Provide resources into the negotiations all internal negotiating teams Will sign the agreement Documents (“papers”) the agreement May administer the agreement Logistics Coordinator Chief Negotiator Makes arrangements for all facilities  Responsible for making the “final” necessary to conduct negotiations agreement on all terms and conditions  Scribe(s) on behalf of the Sponsor Documents key aspects of the  “Project Director” negotiations and the agreed terms Backup Chief Negotiator Schedule Coordinator Temporarily fills the role of Chief  “Project Scheduler/Controller for the  Negotiator negotiation of the Schedules Due Diligence Team Lead Coordinates the activities of all due  diligence activities © Corium Consulting Services Ltd. 2009 15
  • 16. Governance – Master Team Purpose To negotiate the terms of the master agreement To negotiate terms and conditions escalated from the Schedule or Due Diligence teams © Corium Consulting Services Ltd. 2009 16
  • 17. Governance – Schedules Teams Purpose To document and negotiate the terms of one or more schedules © Corium Consulting Services Ltd. 2009 17
  • 18. Governance – Due Diligence Teams Purpose To conduct pre‐negotiations due diligence to validate negotiating  assumptions To conduct in‐negotiations research to provide information to  negotiating teams © Corium Consulting Services Ltd. 2009 18
  • 19. Getting Ready to Negotiate © Corium Consulting Services Ltd. 2009 19
  • 20. © Corium Consulting Services Ltd. 2009 20
  • 21. Orientation Familiarization with negotiations process Establishment of negotiating approach, schedule  development teams and negotiations support teams Development of timeline Establishment of data repository for negotiating  documents Booking of negotiating, schedule development and break  out meeting rooms Acquisition of audio‐visual equipment Determining detail negotiations schedule Internal and joint kick‐off meetings Develop list of approvers of the terms and conditions © Corium Consulting Services Ltd. 2009 21
  • 22. Training Interest‐based negotiations principles and techniques Internal and proponent negotiation teams Internal and proponent schedule development teams Internal and proponent due diligence teams Internal and proponent steering committees Preferably as joint session or sessions Document repository Structure and use of document repository for all teams Scribe Completion and maintenance of the negotiations log  and schedule © Corium Consulting Services Ltd. 2009 22
  • 23. Negotiations Logistics Negotiating Days Communication <days of week> With Internal & Joint Steering  <time> Committees Negotiation and Breakout Rooms Regular schedule 1 common + 2 breakout With Due Diligence teams 7x24 hour access Via document repository  Due Diligence & Schedule  Technical Support Development Rooms Power for multiple notebooks, LCD  1 common + 2 breakout projectors, electronic whiteboards, etc. Coffee & meals Network access: multiple in each room Provided, shared cost Dedicated negotiations teleconference  Working lunch (and dinner?) bridges (minimum 5) Documentation Conference phone in each room Log, Schedule, Decision Log Audio Visual Updating cycle: daily Electronic whiteboard in negotiations  Ownership: Scribe rooms Repository with security e.g.  SharePoint White boards in breakout rooms Remote access: i.e. web LCD projector & screen in negotiations  rooms Flip charts in negotiations room © Corium Consulting Services Ltd. 2009 23
  • 24. Due Diligence Validate assumptions made during procurement  process Validate assumptions made during PTR development Gather information necessary to complete the  development of PTRs Raise additional issues to be negotiated  Delivers a due diligence report detailing findings © Corium Consulting Services Ltd. 2009 24
  • 25. © Corium Consulting Services Ltd. 2009 25
  • 26. © Corium Consulting Services Ltd. 2009 26
  • 27. Initial Negotiation Issues Gather Issues Gather and document potential issues in PTR document Steering Committee – high priority, high profile issues Solutions Workshops – outstanding issues Proposal/Final Presentation – non‐compliance or incomplete  answers Negotiations Team – issues identified by team members Due Diligence – issues uncovered during due diligence Etc.  Develop Interests In PTR document, list interests for each issue © Corium Consulting Services Ltd. 2009 27
  • 28. Developing PTRs Develop PTRs (Preferred, Tolerable, Required) In PTR document, for each issue develop scope of alternatives Preferred – your best outcome Tolerable – an outcome that you can live with Required – an outcome that is the minimum acceptable, but still acceptable Any less and the deal is not worth making Also called BATNA: Best Alternative To Negotiated Agreement Determine key issues, trade‐off issues, etc. PTR document stored in confidential section of document repository,  preferably also password protected (changed regularly) Gain approval from approvers list for individual items Gain overall approval from Internal Steering Committee and  Sponsor © Corium Consulting Services Ltd. 2009 28
  • 29. Example of PTR Document # Issue Explanation Preferred Tolerable Required 1 Term The length of the  4 years: no  2‐4 years;  Minimum 2 years;  contract, whether  renewal; go to RFP negotiable 1 year  maximum 4 years;  extension/renewal is  extension, then go  go to RFP after 4  possible to RFP years 2 Governance – How are contractual  3 levels (to  3 or 4 levels (to  Minimum 2 levels  Escalation issues escalated and  President level),  President level),  plus binding  resolved then binding  then binding  arbitration arbitration arbitration;  mediation  acceptable 3 Termination – At what cost is  Up to 6 months of  Up to 3 months of  Termination  Transition  transition assistance  transition  transition  assistance  Assistance  provided on  assistance at no  assistance at no cost  provided at no cost  Cost termination of the  cost, in all  unless we terminate  if we terminate for  agreement termination  early for  cause scenarios convenience Note: Highly Confidential – Internal Use Only © Corium Consulting Services Ltd. 2009 29
  • 30. Negotiating Strategy Your approach for achieving the best overall outcome Prepares the Internal Steering Committee and negotiating  teams for various scenarios Potential Contents Sequencing of the introduction of issues E.g. Resolve issue A before starting negotiation of issue B Trade‐offs between issues E.g. Willing to achieve “required” on issue C if we achieve  “preferred” on issue D Identification of potential bottlenecks, escalations and approach  for resolution How to deal with potential approaches of the proponent © Corium Consulting Services Ltd. 2009 30
  • 31. Example of Negotiating Strategy # Name Description Strategy Rationale 1 Technical Remove hardware technical • Indicate that hardware technical • As long as software technical Currency currency requirement present currency clause can be removed currency is met, then in order to in current contract • Require concessions in other areas maintain service levels hardware (e.g. pricing) technical currency is not an issue 2 Proponent Because of the ownership • Introduce to Proponent only if • Adds additional credibility to threat Ownership change of Proponent, pricing discussions are seriously of moving and adds immediacy Change Proponent may be in breach bogged down • Note: may need to get legal opinion of the existing contract • Indicate that we are prepared to provision and we can declare breach and thereby terminate current agreement increasing its financial obligation at (or before) termination (expiry) date 3 RFI Generate RFI for preparation • Publish RFI for help in producing • Need high level transition plan that of RFP to change outsourcers outsourcing RFP – to bolster indicates that process must begin credible threat that moving to new now in order to get to expiry in an outsourcer is possible orderly manner • Should be issued just after • If negotiations for extension fall Proponent informed that RFI will through, we need contingency plan be issued (i.e. at same time that you indicate that you will begin negotiations) • Beginning this process is good management Note: Highly Confidential – Internal Use Only © Corium Consulting Services Ltd. 2009 31
  • 32. © Corium Consulting Services Ltd. 2009 32
  • 33. Exchange Issues and Interests Exchange list of issues and interests Extract your issues from PTR document & transfer to negotiations log Add proponent’s issues and interests to negotiations log Rationalize issues Meet jointly to clarify issues and interests Determine and eliminate duplicate issues Finalize initial list of issues and interests Produce initial “negotiations log” Give each issue a unique number Expect to have 80‐100 initial issues, growing to 150‐200 through the  negotiations Finalize negotiations schedule Estimate negotiations time for each issue Establish negotiating days Establish initial negotiating date for each issue by loading issues into days © Corium Consulting Services Ltd. 2009 33
  • 34. Example of Initial Issues Log # Ref. Date Issue Us Them Actions Agreement 1 Current 10MAY07 Periodic Review of • Accommodate technical • Possibility to extend if appropriate contract Agreement and changes, especially those • Maintain financial measures, but clause # Relationship that reduce our costs could modify model 4.11 • Value for $ • Create additional value: do more • No windfall profits together • Accommodate changes to • Fix what doesn’t work the business program • Reassessment process to be cost • Review process that is efficient efficient and does not • Ability to accommodate change necessarily require • Expand without competitive process procurement cycle • Change service delivery model to • Market competitive rates accommodate technology or process and services improvements • People: opportunities, • Maintain the original intent of satisfaction, job security Proponent being prime contractor in • Low public profile an outsourced arrangement • Honor union agreements • Ability to take advantage of synergies as the business plan is executed 2 10MAY07 Term • Long enough so that • Long enough to recover startup procurement costs aren’t costs overwhelming 3 10MAY07 Governance - • Enough levels to eliminate • Rapid resolution Escalation emotion from the issue • Parties should be encouraged to • Definitive end negotiate resolution Permanent, Reference to Date issue first Respective “interests” Common Issue # background info entered into log © Corium Consulting Services Ltd. 2009 34
  • 35. Negotiating Scheduling Why? Ensure you have the correct resources at the table at  the appropriate time Ensure you the required information available at the  appropriate time Tools Custom Excel spreadsheet with day loading (toolkit) MS Project © Corium Consulting Services Ltd. 2009 35
  • 36. Estimate & Schedule Issues For each issue Estimate the total length of time it will require (e.g. #  hours) to reach agreement Be conservative Schedule the issue into a specific negotiating day © Corium Consulting Services Ltd. 2009 36
  • 37. Completed issues highlighted in green Item # Doc Ref Date/Agenda Item Date Next Date Last Date Discussed Open % Initial Actual Remaining Notes/Status Originally Scheduled Discussed Items Complete Est. (hours) Est. Scheduled (hours) (hours) 54 None Term and Term 31-Aug-07 31-Aug-07 31-Aug-07 Y N 100% 2 1.5 0 Closed, with one open extension issue: ability to wind down of services during expiry; to be discussed with other items e.g. termination 6 Proponent Issues Change order process 31-Aug-07 31-Aug-07 31-Aug-07 Y N 100% 2 2.5 0 Closed & Interests list, item #3 24 None New Features 31-Aug-07 31-Aug-07 31-Aug-07 Y N 100% 3 0.5 0 Closed 40 None Composition of 1-Sep-07 1-Sep-07 1-Sep-07 Y N 100% 1 0 0 Closed Proponent Team 8 None Process to demonstrate 2-Sep-07 7-Sep-07 7-Sep-07 Y N 100% 3 5 0 Closed; outstanding end-customer and action to construct stakeholder value initial Balanced Scorecard; survey frequency; example SET/MET Issue # (from log) Initial scheduled date, date last Original estimate, actual time and discussed or closed, date next estimate remaining to completion discussion is scheduled © Corium Consulting Services Ltd. 2009 37
  • 38. Under loaded days Overloaded days Daily Capacity © Corium Consulting Services Ltd. 2009 38
  • 39. The Negotiating Cycle © Corium Consulting Services Ltd. 2009 39
  • 40. Negotiating Cycle Prepare for Negotiations Assemble and review background and supporting data and  information Pre‐brief Internal team meets prior to each negotiating session to review issues,  interests, PTRs and proposals for each scheduled issue Can be immediately before negotiating session or late afternoon on  day before negotiating session Negotiate Exchange “proposals” on issues  May be exchanged prior to each session to enable each party to review  proposals and prepare for negotiations According to pre‐determined meeting schedule Document discussion Document actions items and agreements © Corium Consulting Services Ltd. 2009 40
  • 41. Negotiating Cycle (continued) Debrief Internal team meets immediately following negotiating session to review outcomes, review action items from negotiating session,  develop internal action items, finalize proposals for upcoming  issues Also debriefing of Internal Steering Committee on major issues Research and action items Action items from negotiating session assigned and acted on by  negotiating team, due diligence team, or schedule development  team © Corium Consulting Services Ltd. 2009 41
  • 42. Weekly Negotiations Scheduling Alternative A – 3 Days/Week Alternative A – 3 Days/Week 70% ‐ 100% time commitment Good chance of meeting negotiating deadline May pressure compromises due to limited availability © Corium Consulting Services Ltd. 2009 42
  • 43. Weekly Negotiating Schedule Alternative B – 2 Days/Week Alternative B – 2 Days/Week 60% ‐ 70% time commitment Reduced chance of making negotiating deadline Increased negotiating compromises due to limited time  commitment © Corium Consulting Services Ltd. 2009 43
  • 44. Weekly Negotiating Schedule Alternative C – 3 Consecutive Days Alternative C – 3 Consecutive Days 100% time commitment Very good chance of making negotiating deadline Long hours could tire team © Corium Consulting Services Ltd. 2009 44
  • 45. Conducting the Negotiations © Corium Consulting Services Ltd. 2009 45
  • 46. Negotiation Agenda Typical Negotiating Agenda Review/adjust agenda for the day Identify negotiations log adjustments Review action items due for the day Negotiate the scheduled issues Document in the negotiations log Reschedule incomplete issues for day Review the schedule for next negotiating day Posting of negotiations log and schedule Posted daily at end of negotiating day to shared section  of document repository © Corium Consulting Services Ltd. 2009 46
  • 47. Item Doc Ref Date Issue & Clarification Interests - Company Interests - Proponent Options Actions, Owners, Dates Agreemen ## Relevant Date Short Name for Issue • Company interest #1 • Proponent interest #1 • Initially identified option • • document #1 1 • Company interest #2 • Proponent interest #2 #1 name, section, • Question #1 • Company interest #3 • Proponent interest #3 • Initially identified option page • Question #2 #2 Relevant • Question #3 Daily key discussion points document #3 • Sub-issue #1 name, section, • Sub-issue #2 page Date • Additional question #4 • Company discussion point • Proponent discussion point • Additional option #3 • Action item #1 • Agreement point 2 • Additional question #5 #1 #1 description (example of • Agreement point • Additional sub-issue #3 • Company discussion point • Proponent discussion point action still outstanding) – • Tentative agreem • Additional sub-issue #4 #2 #2 Date Assigned – #3 requiring follow • Company discussion point • Proponent discussion point Responsible • Agreement point #3 #3 o Update #1-1 • Tentative agreem • Company discussion point • Proponent discussion point description – #5, requiring follo #4 #4 Date of update Dates on which • Proponent discussion point o Update #1-2 #4 description – the issue was date of update negotiated Open action items highlighted in yellow • Action item #2 description (example of action completed) – Date Agreements highlighted in green Assigned – Responsible o Update #2-1 Tentative agreements highlighted in red description – Date of update o Update #2-2 Closed action items not highlighted and noted as description – COMPLETE date of update o Update #2-3 description – Completed issues noted as CLOSED Date of update - COMPLETE Date • • • • • • Final agreement o 3 #3 • Final agreement o #5 • CLOSED © Corium Consulting Services Ltd. 2009 47
  • 48. Regular Reporting Report regularly to the internal and to the Joint  Steering Committees Status of key issues Status of key agreements Status of key disagreements Status against desired outcomes (internal only) Status of relationships Issues which (may) require Steering Committee  involvement Status against negotiating plan © Corium Consulting Services Ltd. 2009 48
  • 49. Example of Color‐coded PTR  Document – Positive Outcomes # Issue Explanation Preferred Tolerable Required 1 Term The length of the  4 years: no  2‐4 years;  Minimum 2 years;  contract, whether  renewal; go to RFP negotiable 1 year  maximum 4 years;  extension/renewal is  extension, then go  go to RFP after 4  possible to RFP years 2 Governance – How are contractual  3 levels (to  3 or 4 levels (to  Minimum 2 levels  Escalation issues escalated and  President level),  President level),  plus binding  resolved then binding  then binding  arbitration arbitration arbitration;  mediation  acceptable 3 Termination – At what cost is  Up to 6 months of  Up to 3 months of  Termination  Transition  transition assistance  transition  transition  assistance  Assistance  provided on  assistance at no  assistance at no cost  provided at no cost  Cost termination of the  cost, in all  unless we terminate  if we terminate for  agreement termination  early for  cause scenarios convenience Note: Highly Confidential – Internal Use Only © Corium Consulting Services Ltd. 2009 49
  • 50. Example of Color‐coded PTR  Document – Neutral Outcomes # Issue Explanation Preferred Tolerable Required 1 Term The length of the  4 years: no  2‐4 years;  Minimum 2 years;  contract, whether  renewal; go to RFP negotiable 1 year  maximum 4 years;  extension/renewal is  extension, then go  go to RFP after 4  possible to RFP years 2 Governance – How are contractual  3 levels (to  3 or 4 levels (to  Minimum 2 levels  Escalation issues escalated and  President level),  President level),  plus binding  resolved then binding  then binding  arbitration arbitration arbitration;  mediation  acceptable 3 Termination – At what cost is  Up to 6 months of  Up to 3 months of  Termination  Transition  transition assistance  transition  transition  assistance  Assistance  provided on  assistance at no  assistance at no cost  provided at no cost  Cost termination of the  cost, in all  unless we terminate  if we terminate for  agreement termination  early for  cause scenarios convenience Note: Highly Confidential – Internal Use Only © Corium Consulting Services Ltd. 2009 50
  • 51. Example of Color‐coded PTR  Document – Poor Outcomes # Issue Explanation Preferred Tolerable Required 1 Term The length of the  4 years: no  2‐4 years;  Minimum 2 years;  contract, whether  renewal; go to RFP negotiable 1 year  maximum 4 years;  extension/renewal is  extension, then go  go to RFP after 4  possible to RFP years 2 Governance – How are contractual  3 levels (to  3 or 4 levels (to  Minimum 2 levels  Escalation issues escalated and  President level),  President level),  plus binding  resolved then binding  then binding  arbitration arbitration arbitration;  mediation  acceptable 3 Termination – At what cost is  Up to 6 months of  Up to 3 months of  Termination  Transition  transition assistance  transition  transition  assistance  Assistance  provided on  assistance at no  assistance at no cost  provided at no cost  Cost termination of the  cost, in all  unless we terminate  if we terminate for  agreement termination  early for  cause scenarios convenience Note: Highly Confidential – Internal Use Only © Corium Consulting Services Ltd. 2009 51
  • 52. Note increasing total issues Total # of issues # Issues not started # Issues in progress # Issues completed © Corium Consulting Services Ltd. 2009 52
  • 53. Note increasing time requirement and decreasing time availability # hours available in scheduled negotiating sessions # hours required to complete incomplete issues # hours spent completing issues © Corium Consulting Services Ltd. 2009 53
  • 54. Due Diligence Support for Negotiations Clarify due diligence report as required by  negotiations Respond to additional due diligence information  requests from negotiations teams Perform action items raised in negotiations Response will be time critical Responses should be documented in document  repository © Corium Consulting Services Ltd. 2009 54
  • 55. Legal Boilerplate Develop Master Services Agreement (MSA) structure Complete initial table of contents, including schedules Including standard language from your previous  agreements for issues not to be negotiated Develop Services and non‐Services schedule structure Standard structure for all Services schedules Standard structure for all non‐Services schedules Complete preliminary standard table of contents Stored in shared section of document repository © Corium Consulting Services Ltd. 2009 55
  • 56. Master Development Flesh‐Out The Master (Services) Agreement From business agreement documented in the negotiations log Clarified with negotiations teams Iterative process – several versions throughout negotiating period Ongoing language review by legal counsels Points of disagreement between legal counsels raised as new  negotiating issues All common drafts stored in shared section of document repository All internal drafts stored in confidential section of document  repository © Corium Consulting Services Ltd. 2009 56
  • 57. Services Schedule Development Develop Services Schedules Schedules which describe the scope of the Services or functionality of  software Completed by schedule development team Constant liaison with negotiations team to verify consistency with  business agreement Requires ongoing legal or quasi‐legal review of structure and wording  prior to finalization to ensure consistency and compliance  with the  overall business agreement Meetings schedule similar to master negotiating teams Daily routine similar to master negotiating teams Negotiations log similar to master negotiating team Prolonged disagreement by schedule development teams should cause  issue to be raised to master negotiating table All document drafts stored in shared section of document repository © Corium Consulting Services Ltd. 2009 57
  • 58. Non‐Services Schedule Development Develop Non‐Services schedules Schedules of lists, background information, one‐time activities, etc.  supporting the description of but not directly describing the Services Completed by schedule development team Infrequent liaison with negotiations team necessary Unlikely to require ongoing or detailed legal review of wording prior  to finalization Can usually be assigned to one party or the other with a final review  by the other party Prolonged disagreement by schedule development teams unlikely  but if it happens should cause issue to be raised to master  negotiating table All drafts maintained in document repository © Corium Consulting Services Ltd. 2009 58
  • 59. Final Legal Review Review MSA and Schedules for consistency Definitions, cross‐references, consistency with business  agreement, compliance with policy, compliance with  legislation, etc. Proponent final legal review with senior legal counsel Final legal review may generate additional “last  minute” issues to negotiate © Corium Consulting Services Ltd. 2009 59
  • 60. Wrapping Up and Cleaning Up © Corium Consulting Services Ltd. 2009 60
  • 61. Approvals Internal approvals Business agreement (from negotiations log) Draft agreement language Master Services Agreement (MSA) Services Schedules Non‐services Schedules As per approvers list Next: Steering Committee Finally: Sponsor Proponent approvals Will parallel internal approvals © Corium Consulting Services Ltd. 2009 61
  • 62. Sign Private signing Your signing authority (i.e. Sponsor) and proponent’s  signing authority Legal counsels Lead negotiators Public signing Also attended by negotiating, schedule development  and due diligence teams If desired, attended by the media Possibly attended by the public © Corium Consulting Services Ltd. 2009 62
  • 63. Post‐Closing List of activities/deliverables, committed to in the  contract, to be completed soon after the contract is signed These are deliverables and should be tracked Examples Confirmation of letters of offer to your employees Assignment of your subcontractor contracts to supplier Delivery of certificates of insurance Change of employee pension plans Reimbursement of pre‐paid expenses (e.g. employee vacation, pre‐ paid leases, etc.) Acquisition of new vendor facilities Etc. © Corium Consulting Services Ltd. 2009 63
  • 64. HR and LR Activities Note – only required if staff transfers are involved Voluntary departure programs and/or early  retirement incentive plans May be coincident with period for conditional offers of  employment May be co‐terminus with period for conditional offers  of employment Staff Transfer Activities Offers and acceptances Labor Relations Negotiations Pension Plan Changes © Corium Consulting Services Ltd. 2009 64
  • 65. Celebration Jointly celebrate the signing Hold a scheduled event in the late afternoon or evening Invite all team members Exchange meaningful tokens of the agreement between  the parties Give a memento to the key participants © Corium Consulting Services Ltd. 2009 65
  • 66. Everything You Will Need © Corium Consulting Services Ltd. 2009 66
  • 67. Negotiations Toolkit What Is It? Microsoft Office document templates, samples, and  guides to assist you to plan and manage an outsourcing  negotiation Developed, refined and proven over dozens of small  and large IT contract negotiations in several industries © Corium Consulting Services Ltd. 2009 67
  • 68. Toolkit Contents Negotiations Process Overview  Standard/Initial Issues List Presentation Issues PTR/BATNA Template Interest‐Based Negotiations (IBN)  Negotiating Strategy Template Overview Training Negotiations Log Template Negotiations Kick‐Off (Internal)  Negotiations Schedule Template Presentation Negotiations Proposal Template Diagrams for Kick‐off Presentations Steering Committee Status Report  Negotiations Kick‐Off (Joint)  Template Presentation Sample Closing and Post‐Closing  Negotiations Roles and  Agenda Responsibilities Descriptions Key Lessons Learned Negotiations Logistics Checklist And more… Contract Structure and Table of  Contents © Corium Consulting Services Ltd. 2009 68
  • 69. The One Page Webstore http://www.onepagewebstore.com/onepagewebstore/Negotiations/o nepagewebstore.asp Or Google it: “One Page Webstore Negotiations Toolkit” © Corium Consulting Services Ltd. 2009 69
  • 70. What You’ve Learned © Corium Consulting Services Ltd. 2009 70
  • 71. Recap Manage a negotiations like you would a project Establish a project team and governance structure early Know your issues, your range of acceptable outcomes, and  your negotiating strategy Establish a schedule for each issue to ensure resources and  information are available when needed Have the appropriate facilities and tools available Prepare for each negotiating session and debrief afterwards Document key discussions, points of disagreement, points  of agreement and action items Don’t forget the clean‐up and follow‐up Celebrate your success © Corium Consulting Services Ltd. 2009 71
  • 72. Please feel free to contact me Ken Nowlan Corium Consulting Services Ltd. Phone: 604‐614‐7000 Email: ken.nowlan@coriumconsulting.com Website: www.coriumconsulting.com Toolkit: http://www.onepagewebstore.com/onepagewebstore/Negotiations/on epagewebstore.asp © Corium Consulting Services Ltd. 2009 72