Solution

Table of Contents

Executive Summary   3

1.0                  Introduction   6

1.1.   ROSHN Organisation Background   6

1.2.   Rationale of this Integrative Assessment  6

1.3.   Identifying Spend Category  7

2.0 Rationale of Negotiation   8

2.1 Reason for the Negotiation Plan   8

3.0 Stakeholders Analysis in Negotiation   12

4.0 Implementation of Negotiation Plan   15

4.1 Strategy  15

4.1.1 ROSHN and Vendor/Suppliers in Negotiation Analysis. 15

4.1.2 Market Analysis for Negotiation Plan. 17

4.2 Planning   20

4.3 Execution   22

4.3.1 Negotiation Process Environment. 22

4.3.2 Contract/Category Importance to Organisation. 23

4.4 Evaluation   24

4.5 Delivery   25

5.0 Conclusion   25

6.0 Recommendations  26

References  27

Figure 1:Summary of Procurement Life Cycle, Negotiations Importance. 7

Figure 2:Products and Services ROSHN Negotiate. 9

Figure 3:Summary of ROSHN Objectives. 10

Figure 4:Kraljic Matrix Illustration. 11

Figure 5:ROSHN Stakeholders Categories. 12

Figure 6:A Summary of Stakeholders Analysis using Mendelow Matrix. 13

Figure 7:RACI Framework Summary. 14

Figure 8:CIPS Preferencing Model 17

Figure 9:Summary of Porter’s 5 Forces Analysis. 20

Figure 10:A summary of Persuasion Tool Model 21

Figure 11:5 Rights as Business Priorities. 22

Figure 12:4R’s Model of Negotiation. 24

Table 1:Categories of ROSHN Design Services. 8

Table 2:Design Services Potential Suppliers for ROSHN.. 16

Table 3:ROSHN SWOT Analysis 18

Table 4:STEEPLED Analysis Summary. 18

1.0  Introduction

ROSHN Organisation Background

ROSHN is the most famous real estate developer not only in the Kingdom of Saudi Arabia but also in the whole gulf cooperation council (GCC) countries. It is powered by the Saudi Public Investment Fund (PIF) whose Chairman is His Royal Highness Crown Prince Mohammed bin Salman. ROSHN is definitely considered as a one of the mega projects in the Kingdom of Saudi Arabia that supports the country’s vision for year 2030. The aim of ROSHN is to increase the rate of home ownership for Saudi citizens to become 70% by 2030 by delivering high quality communities for its owners, according to ROSHN’s website (ROSHN Website, 2020). The organisation procurement function is made up of a hierarchical structure. This is made up of corporate procurement, core procurement, cost control and vendor relationship management (VRM). By the organisation leveraging on the effective Procurement and Supply Management (PS&M) department, the organisation is able to capitalise on global networks and empower populations in accessing quality real estate projects in the MENA region. The organisation supply chain is detailed since they have been in a position of advancing quality with technology and connectivity attained. In the PS&M hierarchical structure, this integrated assessment author is responsible with management of different procurement initiatives while at the same time coordinating the entire supply chain. This is at the same time operating in a team-based practice to manage the design services sourcing with modernisation and value for money outcomes. To achieve their roles, active negotiation plan process, e-Catalogue is noted to align fully with the supply contracts with design services sourcing. This imply ROSHN has managed to be successfully modernise their PS&M teams.

Rationale of this Integrative Assessment

In modern organisation area of operation, developing a negotiation plan relevant for commercial negotiations is essential for leveraging on competitive advantage and dominating their sector of operations. As part of the plan, CIPS (2022) note the need to consider different stakeholders interest, costs management, quality evaluation and value for money outcomes. Also, by having in place the commercial negotiation, there is a possibility of attaining successful communication with entire stakeholders relationship attained. Therefore, for this integrative assessment, negotiation plan which form a basis of commercial negotiation is developed, different stakeholders interests prioritised, concerns and expectations identified. Hence, Mwagike et al. (2022) has recommended importance of implementation of an in-depth communication through an active inclusion of all parties with mutual agreement attained. As illustrated in figure 1, negotiations are noted to be in alignment with Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) in negotiation plan (Antal & Mitrik, 2020).

Figure 1:Summary of Procurement Life Cycle, Negotiations Importance

Source: CIPS Materials Notes

Considering this assessment integrative report, the priority is to develop a plan as a basis for formal negotiation in ROSHN organisation. This plan is informed by existing data, statistics, facts and CIPS Models and tools. Further, with the terms and conditions used by the buyer (ROSHN) and the vendor (suppliers), need to manage the Battle of the Forms has been identified. Also, the priority areas in negotiation plan include time factor, quality, quantity and the value for money outcomes.

Identifying Spend Category

One of the most important services we repetitively purchase in the Core Procurement department is design services. It’s very crucial to have a perfect errorless design prior appointing a contractor to go and reflect the design to an actual building. Errorless designs mean a design that follows the used protocols for buildings in Saudi Arabia. This protocol has been announced by (The Saudi Standard, Metrology, and Quality Organization) and it’s a must to follow by anyone wants to build a building in the country. Regardless if it’s a house, shop, or any other type of building, there are a list of standard specifications have to be met to insure covering the health and safety requirements. Failure to comply with such protocol would result to having a non-licensed building, non-end-less fines from the regional municipality, and as a result, having no ability to benefit from the building or offer it into the market for sale. Therefore, considering the design services spend area, further sub-categories can be as summarised in table 1;

Table 1:Categories of ROSHN Design Services

Source: ROSHN Internal data

2.0 Rationale of Negotiation

2.1 Reason for the Negotiation Plan

For the CIPS notes available, negotiation plan entail a set of practices pursued for achieving mutual-based agreement. Therefore, through a successful negotiation plan, ROSHN attain mutual agreement amongst the engaged stakeholders. The rationale for implementing negotiations is to get quality suppliers, access to quality materials and services, right quantity within the appropriate time and good terms to engage the vendor/supplier. Post-COVID-19 pandemic, ROSHN negotiation plan has evolved and transitioned from being guided by costs to prioritising on People, Environment Sustainability, and reputation. In regard to ROSHN, products and services under negotiations are represented in the following;

Figure 2:Products and Services ROSHN Negotiate

Source: ROSHN Internal data

As a leader in real estate development in Saudi Arabia, success in negotiations promote attainment of their main purpose which include to develop real estate sector in KSA and achieving Vision 2030 (ROSHN Website, 2020). In regard to the Design Services category of spend, negotiations is intended to develop new designs. According to Borio (2020), with the demand for real estate projects reducing in Post COVID-19 economic recession, a major disruption of their supply chain has been evident. Further, the KSA government has lowered their spend in their real estate sector and overall construction projects owing to the decreased revenues. These issues have a cumulative negative  impact on ROSHN procuring design services and other categories of spend. Hence, by negotiation plan, there is a possibility of ROSHN maintaining a continuous supply of design services and the rest of their categories. This is to achieve their set goals in regard to revenue increase and business strategy.
2.2 Business Needs in Negotiation Plan

As noted earlier, negotiation plan contribute to achievement of mutual agreement. Hence, CIPS (2023) note on the fact that despite of negotiation strategy used, the most appropriate strategy include appreciating and mitigating contract risks, championing sustainable options, exploring contract terms, pay strategy and continuously improving costs incurred in the process and performance.  For ROSHN case, their objectives are summarised in figure 3;

Figure 3:Summary of ROSHN Objectives

Source: ROSHN Internal data

For ROSHN objectives summarised, negotiation plan would lead to achievement of value for money results and also the identified objectives achievement. Further, for ROSHN negotiation plan, the most appropriate strategy would lead to buyers and suppliers expectations achieved. This is by enhancing buyer-seller relations, suppliers and buyers and contracts negotiations (Chen et al., 2020). Through an attainment of their set specifications, best design services would be procured. This is with their quality being high and safety levels assured hence improved quality of their operations. This is to achieve entire demands for various designs in the construction.

Additionally, to note the rationale of negotiations plan for ROSHN and organisation objectives, Kraljic Matrix tool can be used (CIPS, 2023a). This is important to classify the negotiation importance for the design services sources, weak areas of their supply chain, support system and  minimise disruption in the supply chain.

Figure 4:Kraljic Matrix Illustration

Source: CIPS Module Notes

High-Profit; High Supply (Strategic Items)-  As part of construction, design services are cost-intensive as they are done repeatedly to their desired quality/specifications. In this regard, they directly impact the profits and risks accrued in an organisation hence the need for pursuing in-depth negotiations to have an aligned bottom-line.

High Profit; Low Supply (Leverage Items)- Considering ROSHN, having elaborate design services at the start of any project positive impact their operations. With the different design services available in different suppliers in KSA, MENA and internationally, negotiations should be detailed as opposed to other spend categories. For the other categories of spend, negotiation is pursued during implementation of a competitive bidding.

Low Profit; High Supply (Bottleneck Items)- ROSHN is also involved in sourcing for Health and Safety Equipment for their construction teams. There are various manufacturers of these equipment in Saudi Arabia hence low finance risks. Hence, as part of negotiations, priority need to be on alternatives. This is with negotiations having to nurture their suppliers relationships while exploring and developing alternative supply sources.

Low Profit; Low Supply (Non-Critical Items)- For the design services spend category, they are characterised with low financial and supply risks. Therefore, negotiations are defined by best practice and improving overall financial relations.

3.0 Stakeholders Analysis in Negotiation

In negotiation, managing stakeholders is appropriate to organise, monitor, and improve existing relations. As evidenced in Amadi et al. (2020) stakeholders management represent different stakeholders systematically identified, needs analysis and expectation, planning and implementing collaboration in implementing their roles. The stakeholders are identified in CIPS (2023b) as individuals/teams impacted by the results of a negotiation. In ROSHN, the stakeholders are classified to internal, external and connected (see figure below);

Figure 5:ROSHN Stakeholders Categories

Source: Internal data from ROSHN

For the various stakeholders classification (see figure 4), they directly impact the negotiation plan. According to Maqbool et al. (2022), the level of influence establish negotiation success and scope  of satisfaction of different stakeholders with final results of negotiation process. The potential complexities associated with negotiation success are managed based on power source either permanent or temporarily. Therefore, in negotiation, it is important for different engaged teams to initiate detailed prioritisation of interests for guaranteeing stakeholders involvement in an entity practices. This can be best achieved by using Mendelow Matrix Analysis (Farshid et al., 2022) for classification of stakeholders based on power and interest;

Figure 6:A Summary of Stakeholders Analysis using Mendelow Matrix

Source: CIPS Notes & Internal ROSHN Data

High Power/High Interest (Manage Closely)- Considering finance teams and the design services departments in ROSHN, they impact ability to source the designs. They have permanent-based power coming from the real estate managers, customers and regulators hence critical during the negotiation phase.

High Power/ Low Interest (Keep Satisfied)- The design services supply teams, community in KSA and regulators of the designs and overall architectural designs are engaged in the negotiation and must be satisfied. They have power obtained from the external environment including Post COVID-19 economic recession and overall economic landscape impacting on design services demands and resources for construction. Therefore, as part of negotiation, they introduce these factors to determine the required quality level of design services.

Low Power/High Interest (Keep Informed)- The construction teams of ROSHN real estate projects and also the board of directors play a significant role in influencing stakeholders relations. The source of power is anchored on functions of evaluating design services relevance at the start of negotiations.

Low Power/Less Interest (Monitoring)– This category include KSA government and PS&M teams with their functions being facilitative. During negotiation, their role would include making sure there are no barriers. Their power is from the different teams collaboratively engaged in the negotiation and ensuring full alignment with terms and conditions with battle of forms mitigated.

Additionally, during negotiation, considering the identified stakeholders (see figure 6), it is essential classifying their roles by use of RACI Framework (Suhanda & Pratami, 2021). This represent factors of Responsible, Accountable, Consulted and Informed;

Figure 7:RACI Framework Summary

Source: CIPS Module 2 and 4 Notes

Responsible- The negotiation strategy lead to PS&M taking the responsibility of the practice. This is with design services specifications, their measurements and other requirements captured in their terms and conditions.

Accountable- Negotiation role is ensuring design services procurement is broad than unitary-based decision making (Farshid et al., 2022). Besides, considering ROSHN organisation, in their various departments operations, they make sure most appropriate decision result. This is by pursuing inventory-based planning and PS&M negotiations by factoring terms and conditions. The PS&M in negotiation process would need to detail all important specifications of the designs.

Consulted- Stakeholders with a direct impact on successful negotiations are supposed to be under continuous consultations (Farshid et al., 2022). The importance of this is assuring success in data quality and access to information.

Informed–  With the design services being technical in their framing, the department and construction services need to be furnished with detailed data and information for establishing quality and specifications. This inform need to prioritise negotiations with quality and PS&M specifications.

4.0 Implementation of Negotiation Plan

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