CIO — As most sourcing professionals would agree, Oracle (ORCL) is one tough vendor. From its organizational complexity, to the challenge of finding good negotiation leverage, this growing technology giant can be one of the most challenging to work with. A recent survey of 20 different Oracle customer organizations within Forrester's Sourcing and Vendor Management (SVM) Leadership Council found that across the board, the primary point of contention was Oracle's lack of flexibility on price model evolution, volume/scope changes, and overall business transparency (such as pricing). Council members also expressed that from their perspective, Oracle constantly tries to upsell and increase their costs.

But let's face it — you can't avoid Oracle. The same survey also found that while many member organizations claim they would prefer not to do business with Oracle, it's broad portfolio and frequent acquisitions make it nearly impossible to totally remove from your sourcing strategy. In the words of one council member, it's "very difficult to get rid of them!"

You're up against some of the most able, highly trained, and well motivated sales reps on the planet, but by understanding how Oracle works, you can increase your chances of reducing costs and improving terms and conditions. Drawing on existing research, Oracle's Annual report, current news items, and feedback from its SVM Council Members, Forrester offers the following recommendations for sourcing managers looking to achieve better results from Oracle negotiations.

1. Prepare for Oracles Central Approval Process

Oracle has highly centralized approval processes, so it is insufficient merely to convince your rep to give you the deal you want — you also have to help him convince the decision-makers in Redwood Shores. The rep submits your case via a deal summary that describes the customer's context, what products you are considering buying, what concessions he wants to give you, and why. To help reps assemble the evidence to support your case, sourcing pros should focus on maximizing the current deal's size as well as identifying future revenue opportunities. Oracle's discounting policy looks mainly at the current transaction, so bring forward and push back small purchases to aggregate them into a single PO. That may mean you start paying maintenance on some products before you're ready to implement them, so factor that into your evaluation and ensure that your discount level takes that into account.

Sourcing managers should also strive to create high-level contacts between your executives and Oracle's sales and marketing leaders who are responsible for your industry. Offer to support their efforts by acting as a case study and reference customer, participate in their product planning process, speak at Oracle's events — all of these add weight to the deal summary and help justify favorable treatment.

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