The customer was known to be a tough negotiator; the partner
knew it would be a long and tiring discussion going over each and every line
item in the contract. They had spent almost 6 months discussing the scope,
exclusions, inclusions and service level agreements. Now that the detail was
out of the way, the last mountain to climb was deciding the commercial terms of
engagement. Both were masters of the game and that made it an interesting
setting for others to observe and learn from.
Starting point was the global RFP which had taken everyone
by surprise with level of detail and articulation of expectations; none had
seen such a comprehensive document clearly outlining the selection criteria and
process towards the journey that would select first among equals. It was an
important engagement for both customer as well as providers who had reached the
penultimate stage towards closure; for the partner it was a long and hard
fought battle to emerge as the better player amongst global competition.
Considering deals in the market, the contract value was not very
large or the customer a big name to add as a logo; the deal was important in
the goals and audacity of what it attempted to achieve. Thus interest from OEMs
and partners was definitive with local and global teams from vendor
organizations putting their best teams on the job to respond to the RFP and subsequent
clarifications. Everyone commended the process, transparency and the
professionalism shown by the team through the journey.
The solution architecture was complex yet simple in its
design with integrated pieces that made up the whole. It had not been attempted
before and that raised adrenalin levels akin to conquering an unscaled peak.
With passing time the scope became clearer to everyone with vendors garnering global
resources to stitch together the masterpiece. Tough filter criteria eliminated
some of the contestants leaving behind a mix of large credible players who
imbibed confidence with their brand and experience.
Between the remaining contestants two camps emerged which
proposed to use Commercial-Off-the-shelf (COTS) solutions with minimal
customization, or setting a foundation of COTS but with extensive customization
to create comfort fit to existing processes. Both approaches created the
solution demanded by the opportunity though with divergent approaches.
Conventional wisdom dictated that minimal customization while a school of
thought propagated adaptation to what business can use.
The two approaches demanded alternative commercial models with
respective recommendations on why one is better over the other; these were
fixed bid versus time and material, the first for COTS, the latter for
customized solution; the company had used both approaches in the past though on
smaller initiatives with mixed results, neither emerging as a preferred way of
working. The current project much larger with budgets that were well-defined, thereby
required a very different yardstick to arrive at any conclusion.
COTS fixed bid offered some level of certainty of outcomes,
the number appeared large; it also created perception of limited flexibility by
which business teams were discomforted. What if the solution delivered does not
meet our requirements, what if people are unable to use it as expected, what if
it did not deliver promised results ? There were many case studies on what did
not work in large projects including for solutions proposed by the vendors; it
thus required acceptance of associated risks.
Customized always gives the comfort with the syndrome that I know what I want and I will get it; it
leads to extensible timelines and in many cases suboptimal process. Agreed that
when completed it is used by everyone eventually; this methodology has been
fast losing traction among savvy business and IT folks with the balance in
favor of COTS and Cloud hosted for purpose apps. It may sound counterintuitive
for someone attempting a project so large and complex, but there were proponents
of bending the solution.
Coming back to the commercials, the customer finally decided
to take the risk with a fixed bid hoping to pull it off with the bravado demonstrated
by some of the team members, acknowledging that the world has moved on. They
fought hard on every line item and then some wanting to create an open book
costing which eventually prevailed in the interest of the marquee project. Both
sides came out of the marathon negotiations feeling exhausted but with a
win-win having listed out all possible risks to the project.
The project got off to a great start, did it deliver to
promise ? Wait for the next year !
