Friday, 22 March 2013

Thoughts on a bad deal

Overnight there was a light snowfall and I awoke to half an inch of wet snow on the lawn. It didn't look like it would be around for long and most of it had disappeared before lunch time.

On the work front things were steady, straying towards quiet  and, to be honest, I did nothing to disturb a quiet day. The deal is due for an informal review with a Business Unit Exec on Monday. As a result I spent  time pulling together "facts" and figures in an attempt to allow a three-way comparison of two solution iterations and the current costs of delivering the service. To be honest this review is a little premature as two elements of the solution are still being refined. One has identified significant reductions whilst the other is likely to see a rise in cost. I am attempting to underplay the cost reduction and emphasise the possible increases in order to prevent the EMEA Sales Exec saying or doing something rash.

He wants to be in a position where we can preferably remove, or at least justify, cost increases over the price we presented in November and December last year. This is virtually impossible especially in view of the fact that rash decisions were made previously and costs were "scrubbed" to make a price point. Now we are presenting a firm price those costs need to be restored inflating our price. The fact that this is a contract renegotiation means that the client will not sign for a price higher than the one currently contracted for.

I have no magic wand and I think it will be down to the Sales Team to use weasel words and smoke and mirrors if they are to get the client to sign on the dotted line. In reality this will end up with a contract being signed with more aggressive delivery obligations and little or no extra revenue to fund them. I have attempted to insert protective terms in to the contract to provide a degree of protection but, in a five minute interlude this afternoon, I noted that the terms that had been inserted were as watertight as a colander. The interesting fact was that there were some quite tight terms for my colleagues in the Asia Pacific region but EMEA was not well supported. I am now wondering whether the EMEA Exec has been less assertive than he should have been ...

... whatever the reason the EMEA team are likely to be screwed within six months of this getting signed. The only possible salvation will be to attempt to address these contractual issues in the local agreements. Who knows whether this is feasible or not?

Away from work I took a walk with T&M and knocked off before five o'clock. By the time 30% came in from work I had the log burner up to temperature and thoughts of work were rapidly evaporating from my mind.  The early evening saw a trip over to Littleton Auctions to preview the lots but there was nothing to persuade us to bid in person. I have an inkling that 30% may make a couple of on-line bids though.

I hope she doesn't win that bloody accordion.

No comments:

Post a Comment