CIPS presentation: Transforming Your Negotiating Success by Mike Inman, TableForce
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CIPS presentation: Transforming Your Negotiating Success by Mike Inman, TableForce

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From the CIPS (Chartered Institute for Purchasing & Supply) Annual Conference 2012. Kings Place, London. Learn to negotiate better deals and have better relationships with your internal customers and ...

From the CIPS (Chartered Institute for Purchasing & Supply) Annual Conference 2012. Kings Place, London. Learn to negotiate better deals and have better relationships with your internal customers and suppliers alike.

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CIPS presentation: Transforming Your Negotiating Success by Mike Inman, TableForce CIPS presentation: Transforming Your Negotiating Success by Mike Inman, TableForce Presentation Transcript

  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   All  too  o&en  buyers  trap  THEMSELVES  into  PRICE  FOCUSED   nego2a2ons,  which  actually  end  up  being  a  FOOL’S  ERRAND  in  maximizing  value.    Total  cost  nego2a2ons  that  produce  a  healthy   short  and  long  term  win-­‐win,  both  INTERNALLY  and  with  the   SUPPLY  CHAIN  require  a  more  sophis2cated  mindset       –  not  necessarily  more  DIFFICULT,  just  more  THOUGHTFUL…  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Mike  Inman   Partner  with  TableForce   Formerly  a  head  of  global  procurement  for     MGM  Resorts  Interna2onal  and  IAC/InterAc2veCorp  Transforming  Your  Nego0a0ng  Success!  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Before  anything,  please…  turn  off  the  voice  inside  your  head   counter  intuiEve    
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012  45  minutes  =  2  opportuni0es   Clients   Cost  vs.  Price  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Clients  Their  “sheet  of  paper”  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Communicate  Communicate  Communicate  1.     Seek  to  understand  their  vision  and  goals  -­‐  and  learn  THEIR  language   -­‐    Lean  6-­‐Sigma  operator  vs.  “entrepreneurs”  2.     Translate  YOUR  vision  and  goals  into  THEIR  language   -­‐    Mimic  3.     Speak  WITH  them  in  their  language  regarding  how  the  relevant  points  of  your    vision  and  goals  relate  to  suppor2ng  them  in  achieving  theirs…    -­‐    Different  approaches:        -­‐    Finance  =  reduce  COST  …      -­‐    Marke2ng  =  get  as  much  VALUE  as  possible  from  the  FULL  budget    
  • In  associa0on  with:   Transforming  Your   By:  Nego0a0ng  Success!   ©  TableForce  2012   # of large hospitality customers in Las Vegas 1.0 1.0 1.0 5.0 5.0 3.0 3.0 # of technicians certified on product in Las Vegas 2.0 2.0 4.0 4.0 8.0 4.0 8.0 Local field service management team 3.0 3.0 9.0 3.0 9.0 2.0 6.0 Local service inventory quality and availability 4.0 4.0 16.0 2.0 8.0 3.0 12.0 After hours support structure 5.0 5.0 25.0 1.0 5.0 4.0 20.0 Customer service support structure 1.0 1.0 1.0 5.0 5.0 2.0 2.0 Price per port 2.0 2.0 4.0 4.0 8.0 3.0 6.0 Price per technician 3.0 3.0 9.0 3.0 9.0 4.0 12.0 Vendor training 4.0 4.0 16.0 2.0 8.0 2.0 8.0 Vendor manufacturer support 5.0 5.0 25.0 1.0 5.0 3.0 15.0 System alarming (NOC) services 1.0 1.0 1.0 5.0 5.0 4.0 4.0 Core business hours 2.0 2.0 4.0 4.0 8.0 2.0 4.0 Discount on product (hardware and software) 3.0 3.0 9.0 3.0 9.0 3.0 9.0 Time and Material 3.0 3.0 9.0 4.0 12.0 4.0 12.0 PBX Maintenance Options 1. # of large hospitality customers in Las Vegas 25 14. Time and Material 2. # of technicians certified on product in Las Vegas 20 13. Discount on product (hardware and software) 3. Local field service management team 15 10 12. Core business hours 4. Local service inventory quality and availability 5 0 11. System alarming (NOC) services 5. After hours support structure 10. Vendor manufacturer support 6. Customer service support structure A B
  • In  associa0on  with:   Transforming  Your   By:  Nego0a0ng  Success!   ©  TableForce  2012  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Did  I  men0on  communicate?   Own  the  communica2on  plan  with  suppliers  1.   CONTINUE  to  speak  your  internal  customers  language  2.  Take  80%  of  the  “burden”  off  of  your  internal  customer   -­‐    be  INTENTIONAL  3.  How  and  when  we  communicate  is  a  cri2cal  SIGNAL  to  suppliers   -­‐    The  suppliers  “voice”  says:  “why  are  they  talking  to  me”  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Group  hugs  all  around   Give  ALL  the  credit  to  your  client   Men2on  strategic  “wins”  and  value  FIRST   Cost  savings  LAST  -­‐  IF  AT  ALL  From:  Inman,  Mike    To:  C-­‐Team  Subject:  Re:  Agency  of  Record  results    To  respond  to  your  ini2al  request,  before  looking  at  the  fees  (and  I  assume  you’re  also  looking  for  the  associated  reduc2on)  I  think  we  were  able  to:  1)  get  a  fantas2c  agency  (supported  by  more  objec2ve  criteria  than  just  “they’re  very  crea2ve”  –  aaached  is  the  final  evalua2on)  2)  improve  the  service  offering  (adding  strategic  planning  and  web)  3)  increase  the  amount  of  work  we  expect  the  agency  to  perform  (both  strategic  and  tac2cal)  4)  reduce  the  risk  contractually  (as  they  are  new  and  hungry,  we  were  able  to  get  very  favorable  terms  to  reduce  our  risk  of  going  with  them,   something  that  would  have  been  more  difficulty  with  the  incumbent  agencies)      and  lastly,  reduce  costs…    
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Cost  vs.  Price  Tradi0onal  thinking  Price  =  Cost  +  Profit  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Profit   Waste   Material   Overhead  Price   SG&A   Labor  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012    Think  about  how  LITTLE  most  sellers   are  truly  allowed  to  nego2ate  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Price   Cost   -­‐ Profit Price  =    Cost   +  Profit  Change  the  equa0on!  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Profit   Waste   Material   Overhead  Price   Cost   SG&A   Labor  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Start  by  understanding  that  you  as  the  buyer  drive  cost:   specifica2ons   requirements   demands   designs    
  • In  associa0on  with:   Transforming  Your   By:  Nego0a0ng  Success!   ©  TableForce  2012  Priced  based  example:  Spend  =  £1M  /  year  Profit  =  5%  (£50,000)  Maximum  nego2ated  value?    
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012                                                              Cost  based  example:  10  delivery  loca2ons,  7  days  /  week,  52  weeks  /  year  Average  truck  wait  2me  =  2.5  hours  at  each  loca2on  Driver  cost  =  £25/hour,  truck  cost  =  £10/hour  Total  delivery  cost  =  £875  /  day  or  £319,375  /  year    
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   WHAT  IF…  We  moved  the  inspec2on  point  to  the  suppliers  dock?  Gave  a  “line  pass”  and  reduced  wait  2me  to  10  min  max?  Changed  delivery  to  3x  per  week  New  delivery  cost  =  £70  /  day  or  £10,920  /  year!    
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Price  based  scenario:     £50,000  max  =  5%  an  UNHAPPY  supplier  and  client,  EVENTUALLY    …     Cost  based  scenario:     £319,375  -­‐  £10,920  =  £308,455  =  30+%   a  happy  supplier,  client,  and  FINANCE  and  BOSS    
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012  Where  do  these  ideas  come  from?   Trusted  suppliers  Teammates  looking  beyond  price  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   In  closing   TAKE  RISKS  Be  willing  to  TRY  
  • In  associa0on  with:   Transforming  Your   By:   Nego0a0ng  Success!   ©  TableForce  2012   Thank  you!   Ques0ons?  Mike@TableForce.com