PROCUREMENT STRATEGY
“ There are two main negotiation types . The first is position-based , where one party wins while the other loses . The second is interest-based , where both parties can win ”
NICOLAS WALDEN ASSOCIATE PRINCIPAL AND UK & EUROPE PRACTICE LEADER , PROCUREMENT ADVISORY , THE HACKETT GROUP
communication of those solutions to the counterparties is crucial to build trust during the negotiation process and achieve the best results for both parties .”
Challenges in developing a strategic approach Both Walden and Jayaram acknowledge the challenges that organisations face when adopting a strategic negotiation approach . Walden points out , “ Hackett survey data shows that buyers are only fully prepared for negotiations around 70 percent of the time . Moreover , around 75 % of the time , it is inadequate preparation time that is the driver of this gap . It is essential to allocate sufficient time and effort to adequately prepare for the negotiation , and following key negotiating best practices helps us to prepare adequately and confidently .”
Jayaram adds , “ The primary challenge is the additional investment in time and resources required in developing the strategy for implementation during the negotiation . It is crucial to determine the
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negotiation tactics and styles to be applied which are aligned with the personality profiles of the team members and the opportunities in the relationship to significantly improve the upside or limit the downside .”
She believes the other issue in developing an effective strategy is not having clear goals for the outcome of the negotiation that is detailed enough to eliminate ambiguity and is also delivering value to the counterparty involved .
“ Another obvious hurdle ,” she says , “ is not having enough data or information
50 August 2023