Vol. 28 No.7, Summer 2001

Maximizing the Value of Your Business Information Acquisitions

Technology improvements have made information procurement and deployment very challenging. Many libraries are in the position of negotiating enterprise-wide contracts for resources. This session interested me because as my library develops its intranet and portal, we will need to develop skills to evaluate vendors and products and negotiate the best contracts for the company.

Bill Noorlander of TFPL Inc. offered an excellent, in-depth primer on creating global information contracts. My notes are too long to include in their entirety, so this article will cover the highlights.

Before negotiating contracts for information resources, it is imperative that the overall needs of the firm are understood. Without this groundwork, it’s impossible to determine what information will meet those needs. Unfortunately, there usually isn’t a simple answer to that question since multiple overlapping resources are necessary to cover all the bases.

Noorlander emphasized the importance of gaining this understanding before evaluating resources. He recommended an audit to determine what the needs are and what is currently being used. This should include inputs about

Any data source that helps an employee do their job
Every source of data – independent of its format
Raw data
What are the current business goals?
Where does the firm want to be?
What are future requirements?
How much money is being spent on information now? (It’s always more than you think and the amount will always grow)

Vendors obligingly provide many different types of contracts including:

List price, pay as you go
Pay depending on usage
Guarantee a volume of business
Fixed fee – set usage levels
Flat fee, unlimited usage
Enterprise
Regional
Global

Global deals are not necessarily "geographically global" but can include either multiple sites and various levels of service, or a single site that has access to all services and products offered by a company. A global contract could include access to the full range of products offered by a family of firms owned by a single parent company.

Global contracts should be considered when the vendor is important to the organization’s strategic information needs. Negotiations are often complex and expensive, so global agreements make sense only if a long-term relationship is desired. The "level of spend" on these services must be high or it is not worth the time and effort to craft the deal.

If the decision is made to move forward with a global contract, the right person on the vendor side must be identified. This is usually not the sales rep. The right person has the ability to think creatively about solutions and consider factors other than just price. An important consideration is the ability to aggregate usage across divisions and geographical locations. The deal should be inclusive and flexible enough to change if an extraordinary event occurs, such as the company divesting a business unit or being acquired.

Objectives for contracts:

Buy services that keep pace with market place offering
Service level agreements should be part of the contract
Include penalties and compensation in case Service Level Agreement isn’t met
Contract should be short term – one year
No minimum usage levels or at least low usage levels
Where possible include cancellation clause
Incremental payments
Never automatically roll over contracts
Payment schedule should include usage levels
Note legal jurisdiction where action must be taken.
Make sure contract meets your needs, not vendor
Don’t ignore the business plan
Don’t bypass the users
Don’t attempt too much
Don’t underestimate resistance – on both sides
Don’t buy the hype – know what’s real
Don’t ever think you’re done

--Debbie Hartzman
Amgen Libraries