The document discusses strategies for effective negotiations. It provides tips for preparing well, understanding all parties' needs and interests, managing personal negotiation style, and generating value through creativity. It emphasizes developing a framework based on sound theory and experience to ensure understanding total cost of ownership, avoiding leaving value on the table, managing conflict, and creating rather than just claiming value through a collaborative approach. Finally, it lists over 30 specific tips for planning and conducting a negotiation process, including identifying leverage, setting targets, deciding on tactics, documenting agreements, and adjusting strategies based on self-assessment.

1. Module 4
Ken Hogan

2. Which strategies and/or tool-sets will empower
you to go past cost savings target to also enhance
relationships and qualitative goals in your
negotiations with suppliers, internal departments,
colleagues and other stakeholders?

3.  When engaged in procurement contract
negotiations where your skill as a negotiator may
prevent losses and increase the gains for you and
your organization, significantly increase your
capability to:
 prepare effectively
 understand and consider the needs and interests of all
parties
 manage the impact of your personal negotiation style per
engagement
 generate greater value through creativity
 successfully address all key elements of the negotiation
cycle through optimal preparation, engagement and
review

4.  Developing a framework based on a combination of sound
academic theory and significant practical business
negotiation experience to provide you with a due diligence
framework that will ensure that you are able to:
 understand and improve each individual negotiation relationship
 ensure full understanding and application of total cost of
ownership
 avoid leaving value on the table
 identify and counter negotiation tactics
 recognize and successfully manage potential conflict
 move from claiming value to creating value
 apply a principle-centered, collaborative approach to purchasing
negotiation
 learn effective team management and development strategies
 successfully facilitate team composition

5.  Use an agreement provided by your organization not
the vendor
 Include a contract scope of services based on the
project SOW, which defines the criteria for approval of
and payment for deliverables
 Assemble your negotiating team, including project
manager and an attorney with system procurement
experience
 Identify, prioritize and share negotiation issues with
vendor
 Obtain and evaluate vendor response
 Prepare fallback response and share with vendor
 Narrow issues to short-list and conduct face-to-face
negotiations

6.  Identify the primary supplier to negotiate with.
 Identify your second-best option in case you cannot reach agreement with your primary supplier.
 Determine the format (i.e., face-to-face, phone, etc.) and location of your negotiation sessions.
 Invite the primary supplier to negotiate and learn who the supplier's principal negotiator is.
 Ensure/insist that the supplier assigns a negotiator with decision-making authority.
 Assess your leverage over the supplier.
 Determine your overall negotiation strategy (e.g., hardball, collaborative, etc.).
 Identify all the terms that you will negotiate.
 Set targets and least acceptable alternatives for each term.
 Determine your negotiation tactics (e.g., threatening to use another supplier, emphasizing the benefits
to the supplier of doing business with you, etc.).
 Decide what to concede if necessary to reach agreement.
 Develop a timeline for the negotiation process.
 Identify the risks to achieving your terms, timeline, and other goals and plan to mitigate those risks.
 Develop and share internally a communications plan stating who must be updated on negotiation
progress and what information they must keep confidential.
 Review notes from previous negotiations, courses, etc. for tips for success.
 Anticipate your supplier's reaction to each tactic.
 Create an agenda for the negotiation and practice.
 Start the negotiation confidently.
 Document agreements made and share with the supplier throughout the negotiation process to ensure
that no misunderstandings later derail a negotiation in which you have invested much time.
 Self-assess after each negotiation session and adjust strategy and tactics if necessary.
 At the end of the negotiation, help the supplier feel positive about the new relationship rather than
feeling like it lost the negotiation.

7. What could go wrong?