How to Negotiate Your Oracle Cloud ERP Contract

Written By: Michael Huang
Date: April 20, 2019

As more industries start adopting Oracle Cloud ERP to augment their business activities, it is important to conduct contract negotiations successfully in order to avoid pitfalls that may damage your company down the road. By diligently following some certain steps, your business can navigate successfully through a multi-million-dollar contract to digitally transform your company as a first step in a successful Oracle Cloud ERP implementation.

While ThirdStage Consulting cannot give legal advice about contract negotiations, we did have a discussion with an ERP contract attorney named Marcus Harris. The discussion outlines some of the pitfalls that can help prevent debacles like the SAP failure at Lidl, the SAP challenges at Haribo, and other recent contractual disputes.

Even though the video focused on how to negotiate an SAP contract, the same principles and strategies are also relevant to Oracle Cloud ERP contracts. You can check out the video below.

With this in mind we can briefly summarize some tips covered in the video and overall takeaways from our experiences with contract negotiations.

Understand what you need vs. what you want

It’s important to realize that in today’s technology driven society it’s easy to overlook the complex nature of products and just purchase the newest technology to remain “hip” within your industry. While having the most updated products may seem enticing it’s crucial to understand what new software can bring to benefit your company, and also if it is even needed at all. This is important both when negotiating with Oracle directly and when negotiating with your Oracle Cloud ERP system integrator or Oracle Cloud ERP consultants.

Beware of demos vs. the real thing

While the demos presented during your initial meetings with the vendor may seem to present the software in a glamorous light, it’s important that you do extra research to understand whether the demo presented is what you’re getting. Far too often, companies get swayed by the beauty of demos and forget that the actual product is probably different. This is a pitfall that often comes up during our experience as an Oracle expert witness. Remember, demos are meant to sway you to buy the final product, so it’s in the best interest of the vendor to make the software look as amazing as possible.

Take notes on everything during negotiations

Contracts take time to complete, and it’s hard to pay attention during all of it. However, when looking at the companies who have failed to implement Oracle software into their company and have filed lawsuits against vendors (such as National Grid’s lawsuit against Wipro); many times, the company fails to get an agreeable settlement because they didn’t take note of everything that was presented to them during negotiations talks. When you’re in talks with a software vendor to provide your company the tools to go to the next stage a great way to hold the vendor accountable is to make note of what they promise so that when they do deliver you can have something to compare it to.

Be diligent about costs

This one may seem to be common sense, but many companies have forgotten about this step and paid the price in the long run. Understand how much the software will cost you down the road, not just how much it will cost you now. By calculating future expenses, you can avoid pitfalls that may happen to your company and adequately prepare for possible financial steps you need to take to maintain the software down the road. This is how to effectively plan for an Oracle Cloud ERP implementation.

As with all the rest of the tips that have been brought up in this blog it’s never a bad idea to reach out to individuals who know how to negotiate Oracle Cloud ERP contracts to help you out. There is an abundance of resources out there, including Third Stage Consulting, that can help you navigate down the contract road. Having a great start to software implementation can help you a great deal down the road and nailing your contract negotiations is a guarantee of that.

Michael Huang

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