NETWORKING EVENTS. The SIG Webinar will begin shortly. Once the webinar begins, the sound will come from your computer speakers.

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1 The SIG Webinar will begin shortly. Once the webinar begins, the sound will come from your computer speakers. In the meantime, please take a look at the upcoming SIG networking events listed on the right side of your screen and plan to join us if you are in one of these cities this fall. NETWORKING EVENTS GLOBAL SUMMITS Mar Amelia Island SYMPOSIUMS Nov 12 San Francisco Bay Area REGIONAL ROUNDTABLES Nov 14 Orange County For more information and to register for all SIG events:

2 Become a SIG Champion and earn points in the process by Attending an event Dialing into a webinar Speaking at a Summit Submitting content to our blog or SRC Referring a new member And more For more information and to register for all SIG events:

special member benefits 6 months of free buy-side access (a $30,000 value) to the Vendor Evaluation & Assessment Tool (NEAT) 2 free Market Intelligence Reports for Facilities Management and

3 special member benefits 6 months of free buy-side access (a $30,000 value) to the Vendor Evaluation & Assessment Tool (NEAT) 2 free Market Intelligence Reports for Facilities Management and Application Software (a $10,000 value) supplemented with quarterly updates and a 20% discount on any additional report subscriptions Complimentary due diligence report and analysis on a company of your choice for a deep look at the potential risks you can uncover within your supply chain For more information, go to:

Country Financial posted October 31 Supervisor, Vendor Management Mylan Inc. posted October 28: Sr.

4 RECENT POSTINGS The SIG Career Network is bursting with opportunities. New jobs are posted daily by some of the best known global companies in the world for those seeking careers in sourcing, outsourcing, procurement and related functions. NEW to the Career Network! Country Financial posted October 31 Supervisor, Vendor Management Mylan Inc. posted October 28: Sr. Mgr Strategic Sourcing Holcim Canada posted October 28: Category Manager - Procurement Assurant posted October 24: Procurement Analyst Beckman-Coulter posted October 23: Strategic Sourcing Leader Wellmark posted October 13: Asset Licensing Analyst AXIS Insurance posted October 8: Category Manager Indirect Services Sun Life Financial posted October 7: Sourcing Specialist Motorists Insurance posted October 7: Sourcing Manager For more information go to:

Upcoming Free SIG Webinars: November 6, 2014 Solution Deep Dive: How to Incorporate

November 11, 2014 Use a Broker to Source IT Services Better Terms, Better Prices and Lower

Communication Strategies Presented by PeopleFluent New Topic Each Week 2:00 pm Eastern

5 Upcoming Free SIG Webinars: November 6, 2014 Solution Deep Dive: How to Incorporate Freelancers Safely and Effectively into Your Extended Workforce Presented by Beeline November 11, 2014 Use a Broker to Source IT Services Better Terms, Better Prices and Lower Risk Presented by StrataCore November 18, 2014 Drive Staffing Supplier ROI with Proven Communication Strategies Presented by PeopleFluent New Topic Each Week 2:00 pm Eastern (11:00 am Pacific) Register at For more information and to register for all SIG events:

SIG Town Hall Teleconferences bring a small group of buy-side ONLY attendees together for a facilitated discussion on top-of-mind issues in an open-mic, private

Calendar of Town Hall Teleconferences Taking place at 1:00 pm Eastern on the following dates: February 12 July 9 March 12 August 13 April 9 September 10 May 14

6 SIG Town Hall Teleconferences bring a small group of buy-side ONLY attendees together for a facilitated discussion on top-of-mind issues in an open-mic, private conversation. Town Hall Teleconferences are NOT recorded. Calendar of Town Hall Teleconferences Taking place at 1:00 pm Eastern on the following dates: February 12 July 9 March 12 August 13 April 9 September 10 May 14 October 8 June 11 November 12 Upcoming Town Hall Teleconference: November 12 th Best Practices for Risk Assessment Presented by: Cathy Luoma Director, Sourcing & Procurement American Family Insurance For more information and to register for all SIG events:

24 New York Oct 29 San Francisco Bay Area Nov 12 Regional Roundtables: Hartford Mar 12 Seattle Apr

7 SIG Symposiums and Regional Roundtables provide education and local networking for members and invited non-member corporate users Symposiums: Minneapolis Feb 6 Toronto, Canada Jun 9 Columbus Sep 24 New York Oct 29 San Francisco Bay Area Nov 12 Regional Roundtables: Hartford Mar 12 Seattle Apr 30 Chicago Jun 9 Orange County Nov 14 For more information and to register for all SIG events:

8 A SIG Global Summit is Non-commercialized Almost 70% buy-side Global brands 3 days of networking Executive Roundtables Multiple keynote sessions Nearly 50 breakout sessions 69% at director level or above, of which 43% are VP/C-level

9 Contracting for Facilities Management Outsourcing A Sourcing Integration Strategy November 4, 2014 Kevin Rang Partner, Mayer Brown krang@mayerbrown.com Rohith George Associate, Mayer Brown rgeorge@mayerbrown.com

Speakers Kevin Rang is a Partner in the Business and Technology Sourcing practice. Kevin concentrates on outsourcing and information technology transactions.

services, supply chain, employee benefits, revenue cycle, logistics and accounts payable; and (2) the outsourcing of technology functions, including network management, infrastructure, help desk,

10 Speakers Kevin Rang is a Partner in the Business and Technology Sourcing practice. Kevin concentrates on outsourcing and information technology transactions. He represents clients in transactions involving the (1) outsourcing of business process functions, including facilities management, transactional real estate services, food services, environmental services, supply chain, employee benefits, revenue cycle, logistics and accounts payable; and (2) the outsourcing of technology functions, including network management, infrastructure, help desk, call center, telecommunications, cloud computing and application hosting, development and maintenance. He has represented companies in many different industries, including consumer products, food and beverage, chemicals, manufacturing, financial services, airline, pharmaceuticals, health care, banking, life sciences, publishing and information technology. Rohith George is an associate in the Business & Technology Outsourcing practice. Rohith has advised clients in complex global sourcing transactions, including facilities management, transactional real estate services, food services, lease administration, network management, infrastructure, help desk, call center, cloud computing and application hosting, development and maintenance. He has represented companies in many different industries, including consumer products, banking, chemicals, manufacturing, financial services, and pharmaceuticals. 10

Business & Technology Sourcing Practice More than 50 lawyers around the

consecutive years (Chambers 2004-2014) Named MTT Team of the Year in 2014

11 Business & Technology Sourcing Practice More than 50 lawyers around the world focused on helping clients improve their business operations by sourcing services and technology. Advised on more than 300 significant outsourcing transactions valued at an aggregate of more than $100 billion. Recognized Market Leader Band 1 ranking in IT/Outsourcing for ten consecutive years (Chambers ) Named MTT Team of the Year in 2014 and ranked in the top tier from 2010 thru 2014 Ranked as one of the top law firms in 2009 thru 2014 on The World's Best Outsourcing Advisors list for The Global Outsourcing

12 Agenda Different contracting approaches to facilities management outsourcing Considerations to be evaluated in determining the best approach for you Best practices which should apply regardless of the chosen approach 12

13 Polling Question 1. Have you outsourced your FM services to a large FM services provider? a. Yes, to a single FM provider in one region. b. Yes, to a single FM provider across multiple regions. c. Yes, to two or more FM providers in one region. d. Yes, to two or more FM providers across multiple regions. e. No. 13

14 Different Approaches to Facilities Management Outsourcing What is the desired end-state for the scope of your outsourcing? Single vendor Multiple vendors It is possible that your desired end-state will change after receiving responses to your RFP No single vendor capable of delivering to requirements Certain vendors disqualify themselves with unappealing bids leaving only a single vendor option Acknowledging the need to be flexible, it is useful to anticipate the end-state for the purposes of selecting a contracting approach 14

15 Single Vendor Contracting Approach Sole-source negotiation Early selection of vendor based on bids followed by negotiation solely with such vendor Traditional competitive negotiation Maintain negotiations with at least 2 vendors until all major issues are negotiated Negotiations conducted over the course of 1-3 months Accelerated competitive negotiation Similar to the traditional approach but enforce an accelerated pace to bring to closure For example, 1 week of negotiations with first vendor and 1 week of negotiations with second vendor, followed by downselect and final week of finalization with chosen vendor. 15

16 Single Vendor Contracting Approach Pros/Cons SOLE-SOURCE NEGOTIATION TRADITIONAL COMPETITIVE NEGOTIATION ACCELERATED COMPETITIVE NEGOTIATION Pros Pros Pros Lock in vendor and begin preliminary work, relaxed resource requirements to meet timelines Good competitive leverage, relaxed resource requirements to meet timelines Cons Cons Cons Maximum competitive leverage, maintains momentum, meets timing issues Loss of competitive leverage, lengthy negotiation process, easy to lose momentum Lengthy negotiation process, easy to lose momentum Requires dedicated and focused deal team, greater challenge in being thorough and complete 16

17 Multiple Vendor Contracting Approach Single vendor approaches but handled sequentially Negotiate each scope award sequentially, using any of the three single vendor contracting approaches (sole-source, traditional competitive, accelerated competitive) Simultaneous sole-source negotiation Down-select to 1 vendor for each scope award but conduct all negotiations concurrently for consistency. All awards completed within 1-3 months. Simultaneous competitive negotiation Maintain negotiations with at least 2 vendors for each scope award and conduct all negotiations concurrently for consistency. All awards completed within 1-3 months. 17

18 Multiple Vendor Contracting Approach Pros/Cons SEQUENTIAL NEGOTIATIONS SIMULTANEOUS SOLE-SOURCE NEGOTIATION SIMULTANEOUS COMPETITIVE NEGOTIATION Pros Pros Pros Apply learnings from previous negotiations Awards determined early to begin preliminary work Cons Cons Cons Maximum competitive leverage, maintains momentum, meets timing issues, greatest ability to enforce consistency between contracts Can be difficult to maintain consistency between contracts Loss of competitive leverage unless easy to reallocate awards Requires dedicated and focused deal team, greater challenge in being thorough and complete 18

19 Polling Question 1. Have you participated on a negotiation team involving a large services agreement? a. Yes, participated on a large team b. Yes, participated on a small team c. No, have not participated 2. If so, was it able to efficiently close issues? (Y/N) 19

Best Practices The Negotiation Team Should be limited to contributors and decision makers; not spectators Small groups are more intimate and efficient Contributors should be prepared to support

20 Best Practices The Negotiation Team Should be limited to contributors and decision makers; not spectators Small groups are more intimate and efficient Contributors should be prepared to support positions with real world reasons and examples Designated SMEs need to be committed and reachable Turn around should be measured in hours, not days The team should be aligned on the issues in advance Not all issues will be relevant to all team members 20

21 Best Practices Negotiations Negotiate as the prepared party as often as possible (e.g., reviewing, aligning and reacting to the other sides draft) Listen and understand the supplier s position or issue that is the first step in resolving the problem Avoid misunderstandings and gotchas as they are very likely to come back to haunt you Use the power of a compromise over just saying no Speak to support a point or to ask a question, not just to be heard 21

Best Practices Negotiations (continued) Be professional and do not get personal Client lead may need to be demanding and direct If negotiations get personal then stop!

22 Best Practices Negotiations (continued) Be professional and do not get personal Client lead may need to be demanding and direct If negotiations get personal then stop! Old school issues lists can be effective they are a constant visible reminder of how far or close the supplier is to completing the deal Post-contract Invest in a robust post-contract training program to educate and familiarize the stakeholders on the ground around the globe 22

Best Practices Process / Deal Team Need a single accountable person to run the process Need a single accountable person to coordinate with all SMEs Include business owners to ensure the contract

23 Best Practices Process / Deal Team Need a single accountable person to run the process Need a single accountable person to coordinate with all SMEs Include business owners to ensure the contract reflects requirements on the ground (both commercial and operational) Perform a level set at the end of each day and be prepared to make adjustments Be prepared in tough negotiations for the supplier to attack the advisors Where possible, allocate tasks between members of the deal team and the supplier to maximize efficiency 23

24 Best Practices MVPs Doers Problem Solvers 24

Best Practices Contract structure Start with a firm vision of scope and pricing model that is established as a first step in the negotiation process Segment work description, pricing, KPIs in a

25 Best Practices Contract structure Start with a firm vision of scope and pricing model that is established as a first step in the negotiation process Segment work description, pricing, KPIs in a logical way with respect to both contract structure and negotiation for simplicity and severability Gain an early and firm understanding of each provider s capabilities and plan for service in each in-scope country Certain providers may be strong in a region while not having capabilities in a very important customer country Avoid surprises late in the game about a selected provider s overall service delivery model 25

Best Practices Contract structure Incorporate local country requirements in companion agreements Allow deviations from main contract for local legal requirements Permits local payment for budgetary

26 Best Practices Contract structure Incorporate local country requirements in companion agreements Allow deviations from main contract for local legal requirements Permits local payment for budgetary purposes and tax efficiency Local legal and tax requirements may result in some structural changes Local vs. central jurisdictional issues may be difficult Resist natural tendency to renegotiate 26

QUESTIONS Kevin Rang Partner, Mayer Brown +1 312 701 8798 krang@mayerbrown.

27 QUESTIONS Kevin Rang Partner, Mayer Brown Rohith George Associate, Mayer Brown

NETWORKING EVENTS. The SIG Webinar will begin shortly. Once the webinar begins, the sound will come from your computer speakers.

NETWORKING EVENTS. The SIG Webinar will begin shortly. Once the webinar begins, the sound will come from your computer speakers. The SIG Webinar will begin shortly. Once the webinar begins, the sound will come from your computer speakers. In the meantime, please take a look at the upcoming SIG networking events listed on the right