In our recent whitepaper entitled Keys to Success in Conducting a Request for Proposal Process, we covered the full range of activities in the Request for Proposal (RFP) process including negotiations. Now we'll dives further into the negotiations process, quite possibly the most critical step towards creating successful supplier relationships.
It’s a common perception that negotiation is an “art”, executed by individuals with certain skills and characteristics. Well, that’s how a lot of negotiations are conducted, sort of a game where winning is based on the “magic touch” of the negotiator. In reality, that approach rarely gets you to the optimal result and much is left on the table.
The good news is that successful negotiation is a process, that if followed will get you to the optimal result or very close to it, one which anyone can execute. You don’t need to be a negotiation guru.
The objective of the negotiation process is to get the best deal the supplier is willing to offer. It is an important step in the RFP process. No matter how well you conducted the RFP, and no matter what resulted from the feedback process or a reverse auction you may have conducted, you don’t know what the supplier is really prepared to give. Only the supplier knows that.
So, what is that process?
THE ELEMENTS OF A SUCCESSFUL NEGOTIATION PROCESS
Information:
- RFP results and analysis
- Supplier feedback results
- Reverse Auction results
- Cost Modeling
Preparation:
- Quantitative/economic negotiation items
- Qualitative / non-economic negotiation items
- Value analysis of items - to you, to the supplier
- Assessment of supplier likely positions
- Negotiation targets
- Documented plan
- Defined team roles
- Negotiation meeting objectives
Execution:
- Strategy
- Dynamics
- Understanding of "Do's and Don't" for success
- Document
Want to find out more about how each of these elements work in creating a successful negotiation process? Download our whitepaper titled, Conducting Successful Supplier Negotiations instantly by clicking the image below.
