In the next 10 years the roles of many working in valued professional Corporate positions including Legal, Purchasing and Contracts may be eliminated as Next Generation Contract and Negotiation Solutions will be expected to incorporate intelligence to negotiate and create optimum contract terms with little H2H involvement.
Contract Development and Negotiation as an Algorithm
1. Contract Development and Negotiation is taught as an
Algorithm For Top B School Graduates
Taught and Endorsed @
Top B Schools
Berkeley Harvard
MIT Stanford
Contract Formation
and Negotiation are an
algorithm
Contract Formation and
Negotiation is an “Art” based on
• Will
• Experience
• Personal skill
Current Purchasing Thought
Supported by
• Negotiation Training Industry
• Perception of “born
negotiators”
• Experienced Professionals
Future Business
Leaders are being
taught that best
outcomes for
Contracts and
Negotiations are
predictable via
algorithms and
therefore subject to
full intelligent system
automation
TRADITIONAL Emerging View
Bill Kohnen Informal Purchasing Systems
Discussion Stanford 1/31/15
2. Contract Formation and Negotiation
Can and Will Become Automated
• Technology has already resulted in massive productivity and performance
improvements for complex tasks and eliminated entire professionals that
existed even just several years ago. New business leaders expect this and
consider as normal.
• While top business schools still generally have some experiential
negotiation experience it is generally viewed as a fun elective or only
applicable to the very highest level Strategic Decision
• Top schools endorse curriculum and may spend more time on looking at
the algorithmic approach to almost all negotiation and contract formation.
• In the next 10 years the roles of many working in valued professional
Corporate positions including Legal, Purchasing and Contracts may be
eliminated
Bill Kohnen Informal Purchasing Systems
Discussion Stanford 1/31/15
3. Technology Has Not Added Amazing Value
For Negotiation and Contracts
• Technology introduced into the corporate
contracts and negotiation space has merely
been to automate the manual process in place
with features such as:
– Electronic Document Routing
– Electronic Document Storage
– E Mail Notifications
– Contract creation and approval online vs
typewriter and mail
Bill Kohnen Informal Purchasing Systems
Discussion Stanford 1/31/15
4. Next Generation Contract and
Negotiation Solutions
• In addition to managing details will also
include intelligence to negotiate and create
optimum contract terms.
• Only a high level of human system
management will be required
• Enabled by the further development of
standards for the Internet of Things (IoT) an
Machine to Machine (M2M)
Bill Kohnen Informal Purchasing Systems
Discussion Stanford 1/31/15
5. Outcomes
• Most contracts and negotiations which are not
absolutely critical (80%) will be done with
minimal human touch
• Will result in reduction in need for positions
currently viewed as knowledge based
professionals (Legal, Contracts, Sales, Purchasing,
Finance, Admin)
• As cost and terms become more standardized
and predictable competition will be based
primarily on innovation, branding and logistics.
Bill Kohnen Informal Purchasing Systems
Discussion Stanford 1/31/15