Leveraging Diversity

Complex Contract Negotiation Benefits from Team Diversity

by Sheryl Morrison

Director of Finance
Pitney Bowes Inc.

One project with which The inclusive mindset of the team

I was involved as director of
finance was a contract renewal
for IT support with an out-
sourcing vendor. The challenge was to lead a team in
structuring a deal with pricing, terms, and conditions
that were in line with the company’s expectations.
The global contract renewal was a multi-million
dollar, five-year deal with numerous points to be agreed
upon. A global cross-functional team was established
that included IT, Finance, Procurement, and Legal.
The team diversity encompassed age, gender, cultural,
and racial differences.
The team’s diversity was a catalyst to achieving a
successful outcome. Different ideas were generated
through numerous team meetings and the team
prioritized frequent communication. Through com-
munication and an inclusive mindset, the team was
able to understand various points of view and develop
effective solutions. We were able to evaluate the facts,
without bias. We also determined what items were
critical and what items were negotiable.
In addition, we developed evaluation criteria to
determine the need for competitive bidding. An
external benchmarking service was engaged to provide
market reference and productivity data. Workload
volumes and service level requirements were updated
from the prior contract for the U.S., Canada, and
International operations.
We conducted several rounds of negotiations with
the vendor, covering all key elements of the contract.
Initially, there were some areas where both parties held
firm to their positions. There were numerous long
nights, spirited debates and heated discussions.
broke down any cultural barriers or
bias, and the diversity helped
appeal to a vendor located in a
different country.
However, the team understood that in order to have
a successful outcome for the contract, there needed
to be perceived value on both sides. So the team was
willing to be flexible on the negotiable items that were
important to the vendor, while holding firm to other
points that were critical to Pitney Bowes. The inclusive
mindset of the team broke down any cultural barriers or
bias, and the diversity helped appeal to a vendor located
in a different country. The inclusive team environment
also led to greater innovation and creativity, as well as
openness to listen to different perspectives.
The vendor’s final response met, and exceeded, both
our internal evaluation criteria and the external bench-
marks for competitiveness. The contract saved $1 mil-
lion in 2009, with essentially flat pricing through 2013.
Foreign exchange exposure was borne by the vendor.
Additional contract highlights included improvements
in service levels, increased customer satisfaction targets,
and elimination of fees for early contract termination.
As a result, the team negotiated a mutually acceptable
renewal contract and the agreement was signed. Such a
favorable outcome was directly linked to the diversity
and inclusiveness of the team. PDJ

22 Pro f i les i n D i ve rsit y Journal M aY / J u n e 2 0 1 0