Yes, procurement is very interesting and challenging. Now Tim Cummins posits the end of procurement. 'Procurement' roles of the future will focus on market management, economic assessment, funding and relationship quality. In fact, some procurement professionals have been steadily shifting into these more holistic roles - but this trickle is now set to become a flood as the old ways are abandoned. See www.iaccm.com/resources/; and also www.iaccm.com/resources/;

Hi Diego, this is a great story to share. Our research suggests that organizations should undertake a comprehensive 'uncertainty analysis' for any significant contract, especially if it extends over a considerable period of time. The checklist would help identify that, in a situation like yours that involves fast-changing technology, there is a need for flexibility - perhaps provisioning as you did, or otherwise building in periodic reviews to check estimates and potentially revise funding.

Hi Diego - Intel co-founder Gordon Moore in 1965 predicted a steady, two-year cadence of chip improvements that would double a processor's performance every couple of years. Moore's Law became more than a guideline for computer processor manufacturing. It's instead evolved into a shorthand definition for innovation at regular intervals, and has become a self-fulfilling prophecy driving the tech industry. Those regular improvements in iPhones, Samsung Galaxy smartphones and various other devices are thanks to Moore's Law. HOWEVER, it is slowing and the dramatic fall in hardware pricing will not continue. HOWEVER, hopefully scale and technology economies will cause telecommunications costs to fall so that the Total Cost of Ownership will continue to reduce as you say.

PS IACCM's Contracting for as-a-service Research also suggests that visibility of component costs (hardware, software, comms) is less visible 'in the cloud' and able to be turned on and off on demand. So perhaps the future IT contracts you will sign will have as-a-service as a larger component, so the focus will be on TCO plus the price of flexibility

Hi Judit, thanks for your message.

There is no doubt that the measurement focus is wrong. It drives Procurement to operate within narrow boundaries and tends to drive a strong functional perspective, rather than a broader business focus. In order to deliver value, the role of the future must be far more integrationist in its nature - evaluating and reconciling across stakeholder interests.

As you say, commercial leaders need to be prompting this change and that leads us to a critical area for development - influencing skills. These are built around empathy and coming at problems from the other side's perspective. To some extent, this is a 'soft skill', but actually in my experience can best be learnt through studying elements of marketing. This is also fundamental to becoming a better negotiator - internally and externally.

Some areas I would be focused on right now are:
Agile methods - what are they, how do they apply to my work?
Design-thinking - communicating with the user / receiver in mind, simplifying
Analytics - understanding what data we need and then how to use it (e.g. sources of value versus sources of efficiency)
Negotiation and influencing - as above
Knowledge transfer - enabling others by creating 'self-service'

There are plenty of short courses available - obviously we have a growing library of those and in the next few weeks will make more available - ethics, social value, diversity and inclusion are examples.

I think the most likely answer is that it will be based on timing - so subsequent agreements may amend the original. However, that also depends on what the core agreement - eg MSA - says regarding the amendment process - for example, does any amendment require formal acceptance? If so, are subsequent documents signed or unsigned? Is acceptance deemed as a result of supply or acceptance?

Agree with the first post. Depends on timing. Does your PO contain language that the PO supersedes any other agreements? If so, the PO just superseded your MSA.

We have specific language in our MSAs that state that no POs or other forms of agreement can apply. You could also add that language to your sales order or quote documents so the MSA does not get trumped if there is no order of precedence language in your master.

"No terms and conditions contained in any purchase order or other electronic notification or contract shall be of any force or effect."

on top of what my colleagues said in the previous posts. if the term of the PO differs from the term of the MSA and the other party agrees to it then it will be binding.

Sarah,

The Brexit scenario, coupled with COVID-19 are indeed leading to extended negotiating periods.

Given that Brexit will not be finalised for some time, the only practical way to deal with this would be to include provisions for a process to agree changes to customs duties / tariffs / excises etc. in your contracts.

Hope this helps.

Phyllis we are delighted to know that you enjoyed Rod and Melissa's webinar. I hope that you are also enjoying the first of IACCM's TASK Topics which is all about Remote Work Environment and Balance. There are lots of resources available, podcasts and talks with people sharing their stories and expertise as well as training programs and coaching opportunities to help our members navigate their way through the coming months as we emerge from the immediate crisis.www.iaccm.com/task/remote-work-environment-balance/

Hi Steve, thank you for your question. Pricing trends for major equipment are not something we specialize in unfortunately and in the current circumstances, the answer would, I believe, vary enormously depending on the nature, type, and location of the acquisition.

Believe there is no ready made global data base as of now. Each countries Govt. publishes data on whole sale price index/producer price index/purchasers price index( nomenclature varies) on each and every category of product including machinery, equipment etc. year on year and month on month. These data is generally publicly available and can be accessed and down loaded.

For example - there is Bureau of Labour Statistics in USA which pubishes all such data for the products manufactured in USA. In India its published in a bulletin every month by the central bank i.e Reserve Bank of India

Hi Mohammed,

Great question. You have certainly come to the right place for some expert advice. I hope others jump in as well. You can find an array of resources at your fingertips (including case studies).. if you go into the resource library (Resources > Resource Library) and search by category = Negotiation. I would particularly recommend:

IACCM Dubai Member Meeting April 2019 Presentations
Ask The Expert: Negotiating and Contracting in the Middle East
The Power of Intent Workshop - IACCM APAC Conference 2019
Do Procurement practices cause dishonesty?
Negotiating in a time of coronavirus
In Negotiations, Givers Are Smarter Than Takers

In addition, you may wish to consider our new Managing Contracts Virtually training program (which is currently included as a member benefit) .. Training > Managing Contracts Virtually.

If you need help accessing any of these materials, please contact me at info@iaccm.com.

Regards, Paul