Transcript of Ask the Experts - hr.com
Systems Implementation & SAP Advisory Solution OverviewJeff
Lazarto Practice Leader
ABOUT COMPANY Founded in 2010 Veteran Owned
OUR TEAM Over 20 Years of Experience with
Advisory and Negotiation Strategies
EXECUTIVE-LEVEL RELATIONSHIPS Create Alignment and a Clearer
Understanding of Long-Term Needs and Transformation Plans
OUR SERVICES Transformation Focused Workday, Oracle, SAP,
Microsoft, Salesforce, ServiceNow, and IT Services Commercial
Advisory Experts Experience with ALL Agreements Types
ROI 32x Average Return on
Investment
PORTFOLIO HIGHLIGHTS $2.5B Total Savings, >1000 Transactions,
80% Repeat Business
Unbiased Trusted Advisors
© 2017 UpperEdge. All rights reserved. 3
Relevance for Attendees Knowledge of deal constructs will empower
your
evaluations and negotiations
Poll Question 1
Oracle Fusion Cloud HCM SAP SuccessFactors Workday Other HCM
© 2017 UpperEdge. All rights reserved.
AGENDA
Subscription Flexibility
Subscription Pricing
Calculations
Product Metric Quantity Monthly Unit Price Monthly Term List Price
per Product
List Price per Product Discount Percentage Net Price per
Product
Most Common Product Metrics are Total Employees
or Named Users
Entire Enterprise
Pricing
Hosted Employee Quantity All Employees, Contractors and
Consultants
Hosted Named User Quantity Authorized Users
Monthly Unit Price in Public Price Book - Minimum Quantities per
Product
Annual Subscriptions, Payable in Advance
Total Number of Months in Term — 36 or 60
Dependent on Total List Price per Pillar — HCM, ERP, EPM, CX
Not Typical for Oracle
Pricing
Annual Subscriptions, Payable in Advance
Total Number of Months in Term Ranges From 36 – 60 Months
Line Item Specific
®
© 2017 UpperEdge. All rights reserved.
Pricing
Monthly Term Total Number of Months in Term – 36 or 60
Discounting Dependent on Total List Price, Product Mix, and Term
Duration – Provided on a Line-Item Basis
Tiered Volume Discount Structures
Worker Category Applicable Employees Applicable Percentage FSE
Worker Calculation
Standard Worker (Full Time) 4,000 100% 4,000
Standard Worker (Part Time) 3,000 50% 1,500
Contingent Worker 1,000 25% 250
Emerging-Market Worker 500 30% 150
Short-Term Seasonal Worker 1,000 15% 150
Former Worker with Access 500 2.50% 12
Totals 10,000 6,062
Monthly Unit Price in Non-Public Price Book – Different List Prices
Based on Total FSEs and Term Duration
Annual Subscriptions, Payable in Advance
Product Metric Quantity
Monthly Unit Price
AGENDA
Subscription Flexibility
© 2017 UpperEdge. All rights reserved.
What’s the Difference Between Standard, Deferred, and Ramped
Payment and Fee Schedules?
Subscription Period Standard Schedule Deferred Payment
Schedule Deferred Subscription Fee
Schedule Ramped Fee Schedule
5 – Exit Year 1,700,000 2,000,000 2,059,795 1,700,000
Total Subscription Fees Over Term
8,500,000 8,500,000 8,500,000 7,200,000
• Deferred and ramped schedules are not standard offerings – must
be negotiated • Impact to discounting, renewal term price
protections, and other terms
© 2017 UpperEdge. All rights reserved.
AGENDA
Subscription Flexibility
Renewal Term Price Protections
Renewal term is typically 1 or 3 years
Standard increase is 3.3% per year or one-time 10% increase for
3-yr renewal term
Conditioned on renewing for at least the same ACV per pillar
Renewal term is negotiable
Renewal often conditioned on maintaining spend
Renewal term is typically 1 or 3 years
Standard increase is CPI + 5% per year – Inflation plus Innovation
Index
Conditioned on renewing for at least the same SKUs and FSEs
Product Price Protections Sweet spot for defining BOM that will
optimize pricing
without overcommitting in outer years
Price protect products for time period to maintain downstream
flexibility without financial commitment
Understanding future requirements or roadmap is critical to obtain
predictability
Fees are non-cancellable and non-refundable
Price Protections
AGENDA
Subscription Flexibility
Subscription Flexibility
®
Product Swap / Rebalancing Rights – Shift spend from one product on
the order to another product on the order
Must be within same pillar
Reduction Rights – Reduction of product metric quantities and fees
in the event of a business downturn
Purchasing for growth during term
Must be within same pillar
Reset baseline at high water mark
Reset baseline at high water mark
True-up annually, no baseline reset
During term and at renewal
Terms
Typically, within same product family
Termination for cause only
Termination for cause only
© 2017 UpperEdge. All rights reserved.
Hosted Employee or Hosted Named User Product Metric Typically
Employees or Users FSE (Full-Service Equivalent)
Weighted per Worker Category
Public Non-public Non-public – multiple versions
Volume per pillar Line-item basis Total FSEs, term duration,
product mix
No Yes Yes
May be negotiated May be negotiated May be negotiated – Ramped
good; Deferred
poor
Renewal Term Increases
3.3% per year over the renewal term or one-time increase of 10% for
3-yr renewal term
Negotiable, typically single percentage can be tied to CPI
CPI + 5%
Flexibility Rebalancing and Termination in Favor Product Swap
Reduction Rights and Annual True-Ups
Key Term Summary Comparison
Other Considerations
© 2017 UpperEdge. All rights reserved.
Poll Question 2 Do you have plans for an HCM upgrade or vendor
change in the next 12 months?
Yes No
AGENDA
Subscription Flexibility
Negotiation & Relationship Recommendations
Seek market & vendor intelligence to compliment and enhance
internal efforts
Benefits
Actions
Closing Thoughts
Jeff Lazarto Practice Leader