Book Review: A Practical Guide to e-Auctions for Procurement

“Technology is the easy part. It is always the people who apply the tools who make a difference.”  - Jacob Gorm Larsen, A Practical Guide to E-Auctions for Procurement, p. 7   When Jacob Gor...
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The Role of Emotional Intelligence in Negotiations

Procurement and supply chain professionals must be aware of and strive to improve their emotional intelligence. It has a key impact in negotiations. Soft skills are becoming more important - even in the digital age.

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Guest — Dr. Tom DePaoli
Emotional intelligence can be measured and I recommend this book. Emotional Intelligence 2.0 by Bradbury and Graves. As far as try... Read More
Friday, 23 October 2020 14:40
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Negotiating with Indices

The results are in for your RFP (Request for Proposal), now it’s time to pick the supplier(s), sign the contract, and place the orders (Woohoo!).  But, have you considered the next critical step ...
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How can you be a good negotiator if you have not read the contract?

That’s the question Attorney Mark Grieco asked procurement and supply management professionals attending a member meeting of ISM-Greater Rhode Island at Banneker Industries in North Smithfield.

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As a Purchasing Professional Do You Need to Acquire Sales Skills?

Procurement and sales are two vital business functions with varied processes that are often described as opposites. Some companies may find these two departments at odds with each other as they argue which one is more important for the vitality of the organization.

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Recommended Webinars May 11-15: Silent Slopes, Not-so-Soft Negotiation, Fabric of Success

The schedule continues to be full of events, and I am noticing that they don't hit the calendar with as much lead time as I would expect under normal circumstances. The good news is that they are almost all available on demand. If you ever need helping tracking one down, don't hesitate to ask.

If you are planning your schedule further ahead, I recommend “Money in Hand How to Adapt Promptly and Conserve Your Cash” from JAGGAER on May21st.

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Recommended Procurement Webinars April 22-26: Cost Transparency, GPO Power and Drones + IoT

I’ve been watching this week shape up for a while: Thursday is absolutely crazy. There are 7 events all on the same day, 2 at 1:00pm ET and 3 at 2:00pm ET. Great minds think alike, as they say.

If you are planning your webinar schedule beyond this week, I recommend ‘Achieving agile procurement in digital transformation’ from tealbook on May 2nd at 2pm ET. The event will feature an introductory presentation from A.T. Kearney Vice President Hugo Evans.

BTW: If you haven’t already, sign up for our mailing list to be sure you get my weekly recommendations in your Inbox each Monday.

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The Procurement Conundrum: Savings or PR?

These are tough times to be in business. Costs are rising but selling prices are not, mainly due to global competition. The arithmetic is simple: profits are being squeezed. Finding ways to drive down costs lower than your competition's has become more important than ever – but value and customer service can’t be ignored either.

I like to take an approach to supplier negotiations that I believe will help you gain an edge in these tough times. It starts by finding an answer to the ‘procurement conundrum’.

Many procurement pros are handicapped by having to wear two hats:

First there's the tough-negotiator hat. Driving down costs is a fundamental part of the job; that's why we spend so much time negotiating.

Then there's the good-relations hat. Production requirements and customer needs are constantly changing. Procurement needs suppliers to react quickly to fluctuating demands. As a result, we need to cultivate give-and-take relationships to make sure this happens.

It's easy to see how the two ‘hats’ conflict. Imagine phoning a parts supplier on Friday to coax him into running an unscheduled weekend shift, then on Monday asking for a better price. It’s hardly a recipe for long term success.

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Recommended Webinars December 10-14: A Transformation Framework, Sleep Number’s Negotiation Advice, Looking Back at 2018

So… this is it. This is the last week of webinar recommendations for 2018. There are no less than 12 events taking place this week (and one on the calendar for next week). My official events coverage will start again for the week of January 7th, but I’ve already started adding events to January, so feel free to peek ahead. If you are planning your webinar schedule beyond this week (or year!), I recommend ‘5 Steps to Reach AP Excellence in 2019’ from basware and Ardent Partners on January 15th.

BTW: If you haven’t already, sign up for our mailing list to be sure you get my weekly recommendations in your Inbox each Monday.

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Recommended Webinars August 20-24: Unlocking Digital Value, Collaborative Center of Excellence, Fundamental Negotiation Philosophies

It was really hard selecting just three events to recommend this week – even the webinars that I’m not highlighting below sound fantastic. They include a Supply Chain Now Radio event on attracting top supply chain talent and an ISM/LexisNexis event on applying the PESTLE framework. We also have ProcureCon Direct taking place in San Diego, CA on Tuesday and Wednesday.

If you’re planning a little further out, I recommend “How a Leading Wine Producer Is Making Digital Order Management a Reality” from HfS Research on September 6th at 11am ET. Come for the wine, stay for the digitalization.

BTW: If you haven’t already, sign up for our mailing list to be sure you get my weekly recommendations in your Inbox each Monday.

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Recommended Webinars July 30 – August 3: Overall Spend Management and a Little Help for Outreach Challenged Suppliers

This week and next are slow in terms of virtual events, maybe because we’re changing the calendar to August on Wednesday? There is a live event though – ProcureCon Contingent Staffing taking place in Minneapolis, MN on Tuesday and Wednesday. I’ll also be releasing the July ISM-New York Report on Business results and commentary on Thursday, so the week isn’t going to be completely quiet.

If you’re planning a little further out, I recommend “Fundamental Philosophies in Negotiation for Buyer and Seller”, being hosted by SCN Radio, TalentStream, and APICS Atlanta and presented by my good friend Mark Bilgin on August 24th. Sign up now while you’re thinking of it!

BTW: If you haven’t already, sign up for our mailing list to be sure you get my weekly recommendations in your Inbox each Monday.

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What would you do? Increasing the alignment of multi-functional negotiations

Picture this: your organization needs to create a multi-year contract covering critical components for its manufacturing process. Because of the technical nature of those components, management requests that the team creating the contract be led by procurement but also include engineering, R&D, and finance. Each of the people involved will have different priorities, even though all agree on what they want the end result to be. How do you present a united front at the negotiation table?

What would you do?

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Book Review: Mastering High Stakes Negotiations

I cannot guarantee whether you will be successful after a well-prepared negotiation, but I can 100 percent guarantee failure or finding yourself outsmarted and in a concessionary position if you choose not to do a thorough prep prior to a negotiation.” (p. 38)

 

Mastering High Stakes Negotiations: Both Sides of the Table by Mark M. Bilgin, Ph. D. (BookLocker.com, 2017) is true to its title in that it lays out all of the considerations associated with the most critical, highest dollar value negotiations conducted. In an odd way, however, even meeting that high bar is still selling the book short.

If you are a people watcher, or a student of human behavior, you will absolutely love this book. I was immediately drawn in by the author’s use of case studies, both his own and the ‘outside’ experiences of others to illustrate in colorful but honest fashion the incentives and pitfalls associated with negotiation prep. Negotiation is, at its simplest level, the use of leverage, exchange, and (somewhat) predictable human behavior to bring parties together for their perceived benefit. As a result, you can not be a master negotiator without being aware of and interested in what people say and do. That may come as a great relief to anyone that still thinks negotiation is about aggressively dominating ‘them’ to get what is best for yourself at any cost.

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No Leverage? No Problem: Tips for turning a lack of negotiating leverage into a winning strategy

 “We take a buck, we shoot it full of steroids and we call it leverage.” -Gordon Gecko (Wall Street 2)

 

Leverage - a word that has such meaning it could be used to define itself. When it comes to negotiating, leverage is king. Whether you’re trying to negotiate a multimillion dollar contract or figuring out how to get an extra quart of strawberries included with your purchase at the local farmer’s market, people are always searching for it, and without it you have nothing. Having no ground to stand on when attempting to ask for a compromise from another party is not an ideal position.

 

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The Legacy Telecom Disadvantage

How often can you find 80% savings in your telecom bills? When it comes to legacy services, more often than you’d think! In all industries there are mergers and acquisitions: Telecommunications and Te...
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Keeping Procurement Moving at the Speed of Modern Communications

Many thanks to the Market Dojo team for their cooperation and collaboration on this post - proof that they have attention spans longer than goldfish. 

 

Everywhere you look, there is evidence that the pace of the world is picking up. We share our status instantly in 140 characters or less. Meetings are routinely scheduled for 30 minutes rather than an hour. We check email, make phone calls, catch up on the news, etc. while walking from one place to another so we are fully informed when we arrive. Saying, “Oh, I hadn’t seen that yet...” is likely to be received with skeptical looks and rolled eyes.

 

As an active part of this constantly updating, clipped environment, procurement professionals need to be aware of the general pace of interaction between people and organizations. We have to be both purposeful and accurate if we are going to hold people’s attention long enough to get from them what we need.

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Telecom Contracts: Know What You’re Paying For

Over the past few years, the Federal Trade Commission (FTC) has been cracking down on unethical billing practices at major telecom carriers like Verizon and AT&T. This past October, Verizon paid as much as $64.2M in cash and phone credits to settle a class-action lawsuit for over-charging subscribers of their Family Plan[i].

The case against Verizon accused the telecommunications giant of charging Family Plan subscribers for “in-network” minutes that were supposed to be free, or charging customers with additional phones on the plan $0.45 per minute going over the allotted minute allowance (instead of the $0.25 that was charged to the primary phone on the plan).

The FTC also filed suit against AT&T for throttling data for unlimited data plan subscribers when they used over a specific amount of data during a billing cycle. They explained that AT&T failed to adequately inform customers who had signed up for the unlimited data plan that their speeds would be slowed if they used more than a certain amount of data. Even worse, “When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars,” the FTC said in a statement.[ii]

Telecom contracts aren’t designed to be easy to read and understand. As a result, customers frequently end up paying more than they should for their carrier’s services. While the cases of Verizon and AT&T are the result of dishonest billing practices, customers often fall victim to subpar contract terms and conditions, including overpaying or even paying for services they don’t actually need.

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What negotiation skills does procurement need TODAY?

Listen daaahlings, let me tell you a little something about negotiating. Talking about money is so… GAUCHE. No no no, that won’t do at all. Today, enlightened procurement professionals collaborate. We innovate. We partner. We strategize. I do for you… you do for me… we have a relationship. No ugliness, no shoving. After all, there is no need to stoop to talking about dollars and cents. We have people for that. Right? Yes, well, have your people call my people: we’ll do lunch.

Oh please!

We can’t say that procurement no longer needs strong negotiating skills just because many spend categories are now being managed in a more relational way. Making that assertion demonstrates a fundamental lack of understanding about what it means to negotiate. Negotiation is a phase, not an action. There are a myriad of skills required to be an effective negotiator, and they are different for each set of circumstances.

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Recent Comments
Guest — Phil in Boston
I would imagine underneath each commercial agreement is "math". Both buyer and seller seeking commercial opportunity of some sort ... Read More
Tuesday, 31 March 2015 14:26
Guest — Laurie
It is important to know how to negotiate properly. You provided a great list of skills that are needed. Thanks for sharing!
Tuesday, 16 February 2016 21:02
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Book Review: Strategic Procurement

“To succeed in business is more complex than it used to be - it is no longer economically desirable to control all the components of your customer value proposition.” (p. 6)

 

Strategic Procurement by Caroline Booth (Kogan Page, November 2014) is a second edition, updated from its original release in 2010. Before I even get into the book’s content, I think it is worth reflecting upon the pace at which the procurement profession is changing. In the four years since Booth first released this book, there have indeed been significant changes in economies and business dynamics, requiring equally significant adjustments in procurement. In the preface, Booth calls out her increased focus on risk and the improved position of procurement, as well as enough changes in M&A involvement to add a whole chapter on it.

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Webinar Notes: How to Become a Better Negotiator

This week’s webinar notes are from an August 21st webinar run by CPP Inc, the provider of the Meyers-Briggs Personality Type Indicator Assessment. The webinar was presented by Pamela Valencia, a CPP Solutions Consultant. The event is available on demand on CPPs site.

Being a better negotiator is a topic that you would think had been completely covered by now, but this event offered some new thoughts – even in a compressed 30-minute format. Because CPP is focused on personality, knowing yourself and your fellow negotiators was the core message to this event. Also key was understanding when two dynamics are at play at once so you can divide your reactions to them, and the attitudes they foster.

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