Dear Carrie, I have experience from pricing changes both during the negotiation process and during the contract lifecycle. Our clients have especially found this as an effective tool during negotiations to demonstrate risk/work-impact if the other party is requesting terms transferring an extensive part of the risk/work to them. By showing the cost-impact, the incentive for price increase becomes rather obvious which strengthens your negotiation position. Kind regards, Madeleine Willyams - Advokatfirmaet Negota AS, Norway.
Personally, I would say the 10 are still applicable today (Jan 2020). I also think the point about how fast the world is moving - particularly technology wise - is true and it has only sped up even more in the past 5 years.
• Contract Manager Canada Inc.
If the project is delayed by the Employer... first make sure that there were no delay causes by the Contractor on the previous agreed milestones, for you to be fully eligible for a compensation. Now the tricky part to kick in, is the delay resulting to only warranty extension, which means that all construction, installation and pre-commissioning done? Just ensure that you've all signed-off documents that it's pre-commissioned. if so, your service team will provide an additional cost for extra-warranty coverage and you can lever it as a scope-creep. This is not an issue, if all of your works are completed and no more to come back to do additional works, then you need to add remob to commissioning cost plus the extended warranty cost and get a CO prior to agreement of extension. Don't forget to have your insurance company informed on this extension, as they were notified of previous warranty commitment, not the new one. Hope this serves.
• Seiersen Enterprises
It strikes me that the actual costs of extending the warrantee might be considered.
These may be nil if the delay in the project delays the in service date, and thus the risk of fault.
The onus might be put on the supplier to prove the materiality of additional warrantee costs whatever they might be.
• Capgemini India
As warranty effort is provisioned to fix bugs of contractor's defects, since the delay is caused by the Employer, the Contractor is entitiled to claim additional cost. Not only is this instance 'due to failure of the employer (customer)', which is not due to cause by the contractor, there could also be a delay in the service start date, which means the plans for service could be impacted. Therefore, I believe the additional cost is justified.
Our service department has actually been able to provide a number for us by unit of what an additional year of warranty costs us. Do you know how much the first year costs you? You could always just submit that as an estimate for year two.
New International Technology Co.
Mediocrity may apply at two levels - individual or process. In my experience, mediocre negotiators can still achieve good results if there is an excellent process, but the opposite may not be true. What do you think?
• New International Technology Co.
it is an interesting point ; in other words, how an individual can 'survive' a mediocre organization and tot only specifically on negotiations...or viceversa ; I have experienced both the cases: most probably an excellent process prevails, it has to, also because it would be difficult for an excellent individual alone to substantially modify a mediocre process ; but, again, that's very interesting from the point of view of dynamics
Bombardier Transportation Austria GmbH
The original ROI report led to further work captured in the Ten Pitfalls report.The 9.2% was an average bottom line loss made up of procurement and sales leakages; analysis shows significant variations by industry . Members who have used the data to support internal analysis have validated the study findings and showed many had even higher losses. You can use the Ten Pitfalls as a checklist of a sample of your contracts to see the extent to which such issues are occurring and the scale of impact.
Using the IACCM Maturity Model will also reveal which process weaknesses are adding to the losses.
Picking up on Jennie's reply, we used the ten pitfalls in the way indicated and have been able to generate substantial revenue improvements as a result. Our work looked at just sales contracts and is for capital projects and support services in the oil and gas sector. The approach we took was to explore how many of our agreements delivered below forecast revenues and / or margins And focus initial analysis on those
Hi Peter - I think this is a useful survey to capture the views of people. From across the other side of the world, the two that resonate significantly with me are very similar to this list, with I think defining value right near the top.
I think the easiest thing for people to measure their success used to be cost reduction. But I think that mindset is a long way from the current movement of being strategic, and running perhaps even against the push towards social or environmental outcomes.
Without an easy measure, from my perspective, the best way to measure success is the feedback from your end users which includes suppliers. Did they understand the process, did it work for them, and post contracting, are they happy ? Sure, it gives people less ability to compare across organisations, but I think it's that competition, rather than co-operation, that sometimes stops us from achieving better outcomes.
• Simoons & Company
From a customer-supplier perspective I agree with your observation that cost reduction has most often been the measure of success. However cost reduction on that side often leads to rising hidden costs elsewhere in the organization. In strategic partnerships we not only look at value, but also at the full relationship to measure success. To do so we interview, and/or survey, stakeholders at both sides.
Most important element of measuring success however, is not the measurement itself, but the action plan connected to it to improve the elements that lag behind.