It is in every bank's (and vendor's) best interest to negotiate and agree the best banking system contract possible, and to maintain continuous financial and operational significance for all key stakeholders involved, with clearly communicated actions, updates and objectives. This free webinar from IBS Intelligence delivers a valuable introduction to the issues involved and possible approaches when negotiating and contracting with technology vendors. Using practical examples of the problems a bank may face, the webinar also offers insights into potential solutions and highlights common misconceptions and issues to be aware of. Webinar Agenda: Introduction Problems: Setting the scene a. Example situations b. Pain points c. Implications Possible Approaches a. Hope… b. Tie the vendor down c. Push the vendor’s terms until they refuse d. Link the contract to business (and other bank) objectives Issues to be aware of a. Common misconceptions Conclusion and Q&A.

1. How to improve contracting and
negotiation techniques with
technology vendors
Wednesday 25th April, 2012
www.ibsintelligence.com

2. Introduction
 Contracts are too often:
 an after-thought
 detached from the overall selection process
 too rigid and generic.
 What is the smarter approach?
 IBS Intelligence:
 The specialists in core banking systems (publications,
research and consulting); independent; 20+ years
 Negotius:
 Co-founders have 45 years of vendor sales experience
 Modern semantic knowledge management tools
 Results can be updated and maintained
 Patented consulting process

3. Webinar Agenda:
 Example situation to illustrate the challenges
 Negotiating approaches
 A better approach
 Common misconceptions

4. Example - the situation
 A bank has started a selection process for a new
core system
 RFx, Vendor Workshops, Vendor Selection all
complete
 Preferred and Second Choice Vendors informed
 Legal counsel engaged
 Contracts being negotiated

5. Example - the worry
 Will the vendor deliver on time?
 They have missed deliveries with other banks
 Missed deliveries would compromise the selection
business case
 Can the project plan be delivered?

6. Example - the worry
 Regulatory news....
 Rumours and discussions about upcoming credit risk
capital allocations changes
 These will change the scope of data required from the
core system
 But... the scope of data change is unknown
 So... the existence or size of the gap is unknown

7. Example - how it might happen
 Project team being established
 Focused on precise delivery of contract: time, budget,
scope
 “Failure is not an option”
 Contracts
 Contracts will be tight - no room for manoeuvre (by any
party) - aimed to reduce risk
but....
 How are these activities linked to the original business case?
 To the trade-offs and compromises discussed in the selection
process?
 How can the bank allow for changed goals and rules in the
implementation?

8. What is the Answer?
 Hope
 Maybe nothing unexpected will happen for the next three
years
 ... regulators, competitors, market, vendor, technology etc
 Tie down the Vendor
 Fix what the vendor must deliver
 Any failure to deliver becomes a potential contract breach
 Firm penalty clauses
 No room for manoeuvre
 Push the Vendor until they squeal
 Push the price until the vendor threatens to withdraw
 Add strict SLAs
 Leave “spare” budget internally to allow for overruns

9. What is the Better Answer?
 Good Legal Contract, Good Business Contract
 Contracts produce commercial outcomes
 Legal Outcomes
 Business Outcomes
 Focus on what is needed...
 ... create a mechanism for what might change
 Everything is about the business case
 Market
 Profit
 Cost
 Regulation
 more...
 Link the contract terms and performance to the
business objectives

10. Understand it Holistically
Business Vendor Contract Sign Implement
Objective Response Negotiation Contract Contract
Scope Scope
CRM Scorecards
Enter New Sequence Roles
Channels Change Control
Market Roles Ownership
Product Factory Success Criteria
Commercial Liability
End to End

11. Common Misconceptions
 Contracts.... just for the lawyers, right?
 Well, I’ve signed the contracts now, so I don’t need
to look at them again....
 I’ve got all my contracts in a document management
system, it all seems to be going fine, so why should I
do anything?

12. Summar y
 Contracts define how a bank interacts with its IT vendors
on an ongoing basis - they are business documents
 Contracts are borne out of a series of complex
interactions between banks and vendors - the context
carries the meaning
 Contracts should reflect the business needs of the bank
 Contracts should have flexibility built in so that they can
be used to respond to changing circumstances.
A recording of this webinar will be made available to you
shortly for your reference. Please also consider our
in-depth and flexibly delivered training course.

13. NEW TRAINING COURSE:
Take your knowledge a step further – fully flexible,
contact us to discuss your requirements
 This free webinar provided an
overview of the topic. The new
training course from IBS
Intelligence and Negotius provides
in-depth assistance and guidance
 For more information and to take your
knowledge further, please call us on
+44(0) 1303 262 636 or email
Jon Raeside at
jonr@ibsintelligence.com

14.  System selection (core and all
other areas of banking) Contact us
 Contract negotiations
info@ibsintelligence.com
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