We generate options for Clients
Outsourcing deal structuring, value creation, contract negotiations, strategy & management
Home Page l  Point of view  l Deal Planning  
 

Direct practical experience shows that the most often overlooked steps are:
♦ Incomplete scope definition (not reconciled to the company books);
♦ Lack of clarity on what actvities go, stay or will be shared between buyer and vendor;
♦ Lack of a complete SLA Framework including: metrics, ranges, remedies, and a termination for cause;
♦ Absence of a deal-sheet defining price sensitive deal parameters with a mandatory pricing statement;
♦ Lift and move requirements definition (that become a Statement of Work in the contract); and
♦ Lift and move pricing forms (that become the Schedule of Fees in the contract).
 


 

   Buy-Side-Deal-Planning-half.gif 

Deals must be well planned and executed. 
This requires not only a good understanding of what is required but a planning and execution, disciplined process that involves many team members (internal and external), transaction support specialists, and during due diligence and contract negotiations, the vendor. 
Arriving at a model that works is a delicate combination of rigour and flexibility. The Scope must be expressed in terms of activities, functions and processes and reconciled at a high level with budgets and actual costs in the company books.

Ideally these internal costs need to fully project for the internal model of self provision.  This becomes the comparator for making the internal business case for the transaction.


Scope, as defined, needs to be assessed for performance to determine the required service levels for the term of the outsourcing contract.  Most, if not all, activities in scope need to covered in a well balanced SLA. This forms the basis of the tender instruments such as:
♦ RFI, RFQ, RFP,
♦ Deal Sheets,
♦ Pro-forma contracts,
♦ Site inspection questionnaires,
♦ Reference checking questionnaires, and
♦ Submission Evaluation documents.
In addition to the transaction support specialists, at the contract negotiation stage, vendor strategy and tactics need to be anticipated and planned with a clear negotiation strategy and detailed training of all members of  a well chosen negotiating team.  Experience shows that every minute not spent is multiplied by orders of magnitude during repetitive execution misteps
.
  

©TAU GROUP INC. 1989 - 2016 All rights reserved.