Bharti-IBM Contract

Negotiations
GROUP 4
KRUNAL A. CHI NTEY
AVI NASH H.
SALI L RUNDA

Issues and Concerns of IBM
Major challenge of employee transfer from Bharti to IBM
Clash of cultures- Start up v/s Multinational environment

Uncertainty about Bhartis future in terms of revenue growth throughout the contract period of 10
years
Need to forecast revenue figures of Bharti for the next 10 years in order to enter into a revenue
sharing agreement
After the Deal-A year later
Implementation issues with respect to culture clash and employee transfer

Issue of Scope- joint governing body setup to deal with hardware and software interventions which
were not necessarily expected

Need for clarification of limits of agreement with Bharti, to clarify the nature of requests IBM is
supposed to handle

Revenue received as a progressively decreasing percentage of the progressively increasing revenues
of Bharti

Terms of the DEAL
Object of the Clause Timing Terms
A - Strategic Coordination 1 - Routine 2 - Centralized Authority 3 - Decentralized Authority ** Ex-ante Critical SLAs - Anchor, Major and Enabler
B - Organisational Coordination 1 - Routine 2 - Centralized Authority 3 - Decentralized Authority ** Ex-Post
IBM to design, build up and maintain
Bharti's IT Network
C - Operational Coordination 1 - Routine 2 - Centralized Authority 3 - Decentralized Authority ** Ex-Post Maintenance to be done by IBM
D - Credible Coordination 1 - No CC 2 - Unilateral Hostage 3 - Bilateral Hostage ** Ex-Post All assets provided by IBM
E - Supervision Mechanism 1 - Self-Enforcement 2 - Non-Specialized Supervisor 3 - Contractor Supervisor 4 - Specialized Supervisor Ex-Post
Joint Governing Team formed, SLA based
Measurement
F - Remuneration System 1 - Marginal Productivity 2 - Fixed Sharing 3 - Flat Rate 4 - Intensity of Use Ex-ante Labor on the IBM's payroll
G - Contract Duration 1 - Spot Contract 2- Short-term 3 - Long Term ** Ex-ante Five years plus a five-year renewal clause
Possible Clause Alternatives