Know the players in the process

A lot of different groups will be involved in your contracting process. Business unit executives, purchasing, legal, regulatory and finance can play critical roles and have a large impact on the ultimate contract you sign. Business unit executives are usually the first people you’ll work with since they’re the ones interested in purchasing your services. You’ll cover high-level contract and commercial terms with them like project scope and pricing. Once it’s clear that you’ll be working with a client, ask these executives to put you in touch with the people who conduct supplier onboarding so you can get that process started. That can take a long time. Purchasing or procurement will be your primary contact for contracting discussions. They’re usually the ones who you’ll negotiate contract terms with for an MSA, SOW, TO, or services agreement. They’ll coordinate the involvement from other groups like legal. Purchasing people are experts at negotiating these contracts. They do it all day every day. Typically, there’s a team that focuses on professional services like consulting services so you may have to deal with them. You’ll negotiate commercial terms with purchasing. Remember, one of their primary goals is getting your services as inexpensively as possible. Just know that if they push you too hard on pricing, you have the option of involving your business executive sponsor. At Thought Leaders, at one point, I agreed to a contract with my business executive sponsor. This included the amount of money she was going to pay me for the project. When the contract went to purchasing, the purchasing guys started pushing me on our rates. He was pushing for discounts. He wanted a lower total project cost. At one point, he even hung up on me on the phone during a contract negotiation because he said he didn’t like my approach to pricing. At that point, I got my business unit executive sponsor involved in the process again. She made one phone call to him. Within 10 minutes, I had the contract in my inbox ready for signature. Legal and regulatory team members might get involved if a specific contract provision requires expertise that goes beyond the authority or expertise of the purchasing person you’re working with. Finance can get involved in your contracting process if there are large financial impacts, budgeting considerations, or complex financial assumptions, or pricing models being negotiated. For example, if your fees are contingent upon future client profits, finance is going to have to discuss those percentages with you, agree upon the calculation method, and build those impacts into their future financial forecast. The better you know the players and why they’re involved in the contracting process, the more effectively you can deal with them and negotiate a contract that meets your business needs.