When is the best time to negotiate with a particular vendor?\u00a0\u00a0 Clients will ask me about quarter-end, year-end, earlier renewal, new large strategic purchase, etc. \u00a0The answer is that it depends on a number of factors and is typically unique to the specific circumstances of the client and vendor at that particular point in time. \u00a0However, there are certain vendor specific situations that arise that make for an ideal time to negotiate with a particular vendor. \u00a0For 2016, that vendor would be IBM.\nThe perfect storm\nIBM recently reported its 15th straight quarter of revenue decline and is in the middle of transforming its business to a cognitive solutions and cloud platform company. \u00a0While it is understandable that transformations do take time to take hold, IBM\u2019s transformation has been particularly painful as evidenced by its steady revenue and stock price decline.\u00a0 In particular, IBM\u2019s growth in its strategic imperatives (which include cloud, analytics, social, security, and mobility) cannot keep pace with the steep revenue decline in its traditional hardware and services businesses.\nIt is worth noting that this decline has existed over the entire tenure of Ginni Rometty as CEO, including IBM\u2019s abandonment of its prior strategic goal of reaching $20 EPS by the end of 2015. \u00a0IBM\u2019s EPS was $14.94 for fiscal 2015. \u00a0As the first female CEO in one of the most iconic blue chip companies in the world, do not underestimate the importance, drive, and pressure for Rometty to succeed, both personally and as a pioneer and role model for young women.\nIBM also just recently executed on a significantly large round of layoffs, with big cuts in its GTS business unit. \u00a0IBM does not publicly report layoffs as they call it workforce restructuring, which is their way of hiring lower cost offshore resources to replace its more expensive US resources. \u00a0But in various online forums IBM staffers have been commenting that the layoff is significant, with some claiming as much as 1\/3 of the workforce, although IBM has refuted that number. Additionally, IBM\u2019s severance packages have been slashed to 1 months\u2019 pay, regardless of tenure; whereas severance was previously reported to be 6 months\u2019 pay.\nAll of the above are casting IBM in a very negative light, from the way they have treated long tenured employees, to their poor revenue and stock performance, to Wall Street\u2019s skepticism regarding IBM\u2019s strategic direction and the leadership to execute against it.\nIBM\u2019s weakened position provides significant customer negotiation leverage\nThis is about as weakened as we have seen IBM in many years. \u00a0Therefore, customers have their greatest negotiation leverage as IBM must close new deals and expand current relationships, and can ill afford to lose current customers or have customers scale back their IBM spend.\nWith IBM\u2019s substantial workforce rebalancing and strategic business transformation ongoing, it is a perfect time to meet with IBM to conduct a personal assessment of their transformation and strategic direction by having them explain how these developments can benefit your organization. \u00a0This inquiry meeting can serve as the platform for a subsequent meeting to re-negotiate your current relationship across all of IBM\u2019s business units (Hardware, Software, and Services), including any new spend initiatives.\nWe recommend IBM customer\u2019s employ the following approach:\n\nMeet with your IBM executive sponsor (or request an executive sponsor if you do not currently have one) to understand IBM\u2019s strategic direction in greater detail\nDetermine if and where your demand requirements map to IBM\u2019s strategic direction\nIdentify pain points in your current IBM relationship\nConduct a mark-to-market assessment of key financial and\u00a0 commercial terms\nDefine your desired relationship structure with IBM, including financial and commercial terms\nIdentify potential alternatives for gradually displacing IBM in discrete areas where possible\nRe-engage with your IBM executive sponsor to discuss your redefined relationship expectations, positioning this as a requirement for continued and expanded investment in IBM\n\nIBM should welcome the opportunity to engage in this dialogue. Remember, IBM is experiencing heightened pressure unlike what we have seen for at least the past decade and can ill afford to lose customers or have customers downsize their annual IBM investments. \u00a0Market circumstances are forcing IBM\u2019s hand to be more customer friendly and accommodating, including agreeing to non-standard financial and commercial concessions and other relationship investments if necessary. \u00a0Customers that make re-negotiating with IBM in 2016 a priority, and take the time to gather information and intelligence to approach IBM from a position of strength, have an unprecedented opportunity to transform their IBM relationship. \u00a0It is truly a rare opportunity for customers to significantly redefine and establish a new relationship foundation for investment over the next 5 years.\nI would love to receive your feedback and thoughts regarding IBM\u2019s strategic direction and approach to customers, so please do not hesitate to post a comment.