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

Mike Inman
Mike Inman

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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In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 All too o&en buyers trap THEMSELVES into PRICE FOCUSED nego2a2ons, which actually end up being a FOOLS ERRAND in maximizing value. Total cost nego2a2ons that produce a healthy short and long term win-足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! 息 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! 息 TableForce 2012 Before anything, please turn o鍖 the voice inside your head counter intuiEve
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 45 minutes = 2 opportuni0es Clients Cost vs. Price
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Clients Their sheet of paper
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Communicate Communicate Communicate 1. Seek to understand their vision and goals -足 and learn THEIR language -足 Lean 6-足Sigma operator vs. entrepreneurs 2. Translate YOUR vision and goals into THEIR language -足 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 -足 Di鍖erent approaches: -足 Finance = reduce COST -足 Marke2ng = get as much VALUE as possible from the FULL budget
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 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! 息 TableForce 2012
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 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 o鍖 of your internal customer -足 be INTENTIONAL 3. How and when we communicate is a cri2cal SIGNAL to suppliers -足 The suppliers voice says: why are they talking to me
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Group hugs all around Give ALL the credit to your client Men2on strategic wins and value FIRST Cost savings LAST -足 IF AT ALL From: Inman, Mike To: C-足Team Subject: Re: Agency of Record results To respond to your ini2al request, before looking at the fees (and I assume youre also looking for the associated reduc2on) I think we were able to: 1) get a fantas2c agency (supported by more objec2ve criteria than just theyre very crea2ve aaached is the 鍖nal evalua2on) 2) improve the service o鍖ering (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 di鍖culty with the incumbent agencies) and lastly, reduce costs
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Cost vs. Price Tradi0onal thinking Price = Cost + Pro鍖t
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Pro鍖t Waste Material Overhead Price SG&A Labor
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Think about how LITTLE most sellers are truly allowed to nego2ate
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Price Cost -足 Pro鍖t Price = Cost + Pro鍖t Change the equa0on!
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Pro鍖t Waste Material Overhead Price Cost SG&A Labor
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Start by understanding that you as the buyer drive cost: speci鍖ca2ons requirements demands designs
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Priced based example: Spend = 贈1M / year Pro鍖t = 5% (贈50,000) Maximum nego2ated value?
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 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 = 贈25/hour, truck cost = 贈10/hour Total delivery cost = 贈875 / day or 贈319,375 / year
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 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 = 贈70 / day or 贈10,920 / year!
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Price based scenario: 贈50,000 max = 5% an UNHAPPY supplier and client, EVENTUALLY Cost based scenario: 贈319,375 -足 贈10,920 = 贈308,455 = 30+% a happy supplier, client, and FINANCE and BOSS
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Where do these ideas come from? Trusted suppliers Teammates looking beyond price
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 In closing TAKE RISKS Be willing to TRY
In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Thank you! Ques0ons? Mike@TableForce.com

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

  • 1. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 All too o&en buyers trap THEMSELVES into PRICE FOCUSED nego2a2ons, which actually end up being a FOOLS ERRAND in maximizing value. Total cost nego2a2ons that produce a healthy short and long term win-足win, both INTERNALLY and with the SUPPLY CHAIN require a more sophis2cated mindset not necessarily more DIFFICULT, just more THOUGHTFUL
  • 2. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Mike Inman Partner with TableForce Formerly a head of global procurement for MGM Resorts Interna2onal and IAC/InterAc2veCorp Transforming Your Nego0a0ng Success!
  • 3. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Before anything, please turn o鍖 the voice inside your head counter intuiEve
  • 4. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 45 minutes = 2 opportuni0es Clients Cost vs. Price
  • 5. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Clients Their sheet of paper
  • 6. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Communicate Communicate Communicate 1. Seek to understand their vision and goals -足 and learn THEIR language -足 Lean 6-足Sigma operator vs. entrepreneurs 2. Translate YOUR vision and goals into THEIR language -足 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 -足 Di鍖erent approaches: -足 Finance = reduce COST -足 Marke2ng = get as much VALUE as possible from the FULL budget
  • 7. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 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
  • 8. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012
  • 9. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 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 o鍖 of your internal customer -足 be INTENTIONAL 3. How and when we communicate is a cri2cal SIGNAL to suppliers -足 The suppliers voice says: why are they talking to me
  • 10. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Group hugs all around Give ALL the credit to your client Men2on strategic wins and value FIRST Cost savings LAST -足 IF AT ALL From: Inman, Mike To: C-足Team Subject: Re: Agency of Record results To respond to your ini2al request, before looking at the fees (and I assume youre also looking for the associated reduc2on) I think we were able to: 1) get a fantas2c agency (supported by more objec2ve criteria than just theyre very crea2ve aaached is the 鍖nal evalua2on) 2) improve the service o鍖ering (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 di鍖culty with the incumbent agencies) and lastly, reduce costs
  • 11. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Cost vs. Price Tradi0onal thinking Price = Cost + Pro鍖t
  • 12. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Pro鍖t Waste Material Overhead Price SG&A Labor
  • 13. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Think about how LITTLE most sellers are truly allowed to nego2ate
  • 14. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Price Cost -足 Pro鍖t Price = Cost + Pro鍖t Change the equa0on!
  • 15. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Pro鍖t Waste Material Overhead Price Cost SG&A Labor
  • 16. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Start by understanding that you as the buyer drive cost: speci鍖ca2ons requirements demands designs
  • 17. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Priced based example: Spend = 贈1M / year Pro鍖t = 5% (贈50,000) Maximum nego2ated value?
  • 18. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 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 = 贈25/hour, truck cost = 贈10/hour Total delivery cost = 贈875 / day or 贈319,375 / year
  • 19. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 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 = 贈70 / day or 贈10,920 / year!
  • 20. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Price based scenario: 贈50,000 max = 5% an UNHAPPY supplier and client, EVENTUALLY Cost based scenario: 贈319,375 -足 贈10,920 = 贈308,455 = 30+% a happy supplier, client, and FINANCE and BOSS
  • 21. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Where do these ideas come from? Trusted suppliers Teammates looking beyond price
  • 22. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 In closing TAKE RISKS Be willing to TRY
  • 23. In associa0on with: Transforming Your By: Nego0a0ng Success! 息 TableForce 2012 Thank you! Ques0ons? Mike@TableForce.com