* ProActive Think Tank

« view all forum posts
2013-07-01 08:13:39

New to Contract Mgmt

Hello All,

I am relatively new to this domain of contract management with 9 months of exp. and now I'm working in Singapore for an Oil and Gas company. Previously I thought negotiation will be easy for me but after my first encounter with a client I knew this is not a piece of cake.So I want to know what are the important tips that we tend to overlook when negotiation takes place and what are the paramount factors one should be aware of before negotiating with the client . Any inputs will be appreciated. Thanks.

 •  Century 21 Vanguard  •   2013-07-01 09:42:42
In my opinion one of the most important parts of the negotiation (and often the most overlooked) is the pre-negotiation preparation and planning phase.  Understanding your priorities and the priorities of the other side, knowing what your constituents want, knowing your walkaways, identifying value creation opportunities, and having an overall strategy are keys to a successful negotiation.  With that said, IACCM research shows that many negotiators fail to plan properly or plan at all.  In 2009 we did a comprehensive negotiation benchmark study that showed 74% of the 124 companies benchmarked did not use any formal negotiation planning tools.  You can imagine how much more successful you will be if you’ve done your homework before the negotiation begins, particularly if the other side hasn’t done their planning.  The flipside would be that they’ve prepared and you haven’t.  I’m sure you don’t want to find yourself in that situation.

A couple of other suggestions for you:  If you aren’t already enrolled, you should consider signing up for the IACCM Managed Learning and Certification program.  There are several modules in the curriculum that specifically address negotiation topics.  IACCM also has a Negotiation Community of Interest you can join to seek help and advice from other IACCM members.  You can also search the IACCM Library for articles, presentations, Ask the Expert recordings, templates, etc. related to the topic of negotiations.

Good luck!


 •  TECHNIP INDIA LIMITED  •   2013-07-05 05:03:45
My experience shows what Katherine has told is one of the best approaches you have. Pl. get hold of IACCM expertise & for sure, you will succeed. 

Thanks & Regards,

N Balachandar

 •   2013-07-08 18:48:16
You need to anticipate the other sides's likely demands and to have a plan to deal with their demands. This includes consensus in your organization on what your desired position is and what your walk-away position is. Part of your plan will also be to decide who leads your team at what points and on what issues. You must appear united and knowledgable.

Another key issue is authority. You need to have the authority in your team to make decisions. But also make sure that the other side has authority, otherwise you are not really negotiating.

Look for trade-offs. You will have a negotiation agenda, but do not just operate point by point - that leads to compromise or impasse. Try to work on relative value items. For example, maybe you really want good payment terms; maybe the customer really wants extended warranty. Perhaps you can make a trade and both get what you want. But if you have not understood your own areas for their importance and have not gathered that data about the customer, you will miss opportunities.

There is so much more - but maybe these early tips will help you.



 •  Vodafone  •   2013-07-10 07:10:53
Firstly, leave your ego outside of the room. Do not be so attached to your own values. Focus on what the task in hand is, not what the agendas are (yours, or theirs). Do not be positional, for example do not get straight into a horsetrade based on what you think they want, as others suggest. Allow space for you, and for them. Try to ask open questions to explore and clarify what the task REALLY is about. Finally, keep an implementation mindset and ask "what if..." i.e. if we do X, then what happens (cause and effect).

If you can do all of these consistently you will be successful, and if you do then please let us all know!

 •  IACCM  •   2013-07-14 00:03:03
One of the keys to success in Oil and Gas contract negotiations is the utilization of internal (and to the extent that internal is lacking) expertise.  In some instances, one might become intimidated by all of the phrases and acronyms being said at the negotiation table.  Keep in mind that information is power, and if the other side feels that they can gain concessions through the use of industry specific words and phrases...they will.  Bring your experts to the table and this advantage will be neutralized, or even reversed.  This set of comments is usually more relevant in positional negotiations.

Hence, strive for principle based negotiations and you might find the negotiation to be more productive and effective.  The IACCM on-line learning modules, as well as many materials in the IACCM Library, cover these two negotiation approaches.

Good luck!

Jim Bergman


Replies: 5