(Solution) CIPS ROSHN Negotiation Process
In this integrated assessment, a focus on a formal negotiation plan has been pursued. This is through the focus of Roshn organisation which is a Saudi Arabia’s largest real estate development company owned by the Public Investment Fund for KSA, has Vision 2030 supplier sourcing management strategies. The firm’s procurement department relies on a model outlined by Bailey et al that provides a rigorous approach to preparation and analysis in order to get better bargains. Hence, the Roshn internal supplier data collection and external market research to create accurate supplier risk and sourcing plans.
A variety of tools is applied, such as the Kraljic Matrix that is used to sort suppliers. The key findings note that different training activities include negotiation simulations and skills to prepare and help procurement officers for the journey. Another key finding ius that detailed planning and analytical structures accompany objectives and concession tracking. Another key finding note that supply relations are strategically classified on issues of risk and consequences as far as supply management is concerned. On a continuous basis, repetition and necessarily sequenced post negotiation reviews improve processes gradually for a successful negotiation plan.
From the findings and conclusions obtained, to maximise efficiency and optimise outcomes, it is recommended:
- Roshn standardise the Bailey et al procurement framework.
- Regular training will develop negotiation mastery, and the Kraljic Matrix will tailor strategies per supplier importance.
- Sourcing strategies should evolve through market reviews. Building long-term, trusting partnerships will foster competitiveness beyond transactions.
- Clear metrics measuring initiatives’ success will empower data-driven process adjustments.
- Adopting these practices will enhance Roshn’s sustainable sourcing in support of Vision 2030 goals.
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Description
Solution
Negotiation
Negotiation is a mutual business interaction between or among people and organizations in an attempt to reach desired goals, resolve conflicts or avoid controversy. It encompasses collaboration, negotiation, and part of agreeing to reach agreeable terms that will benefit all persons of interest. In procurement and supply context, negotiation aims at acquiring resources at the best rate, at the same time maintaining and developing supplier relations.
The negotiation model developed by Bailey et al is a strategic model particularly in procurement and supply. The model outlines three key stages: Pre-negotiation Preparation, Negotiation/Interaction, and Post-negotiation Follow-up.
- Pre-negotiation Preparation: This stage is very important since it creates a platform that facilitates negotiations. It covers the collection and evaluation of inside and outside context data including things like suppliers’ capacities, estimate of future demand, historical price information, regulative requirements and the likes (OPR, 2021). There are also the analyses of stakeholders as well as the bargaining power which is done by applying some tools like Mendelow Matrix, Porter’s five forces model and Kraljic Matrix as far as the supplier market power is concerned. Key issues and/ or risks are as follows while strategies are planned as follows. Moreover, the roles in the team are assigned and the schedule for the meeting and its organization is developed.
- Negotiation/Interaction: This is phase involves bargaining such that different parties talk in order to come to the agreement. It entails getting the most out of a situation by controlling confrontation, finding solutions, and cobbling rapport (OPR,2021). The most important requirements are the possibility of continuous, open, and trustful communication in the inter-organizational relationship, market knowledge, and the systematic assessment of the counterparty.
- Post-negotiation Follow-up: This stage keeps the customers on the right track and look at how to resolve any issue that may be remaining after the contract has been signed. The follow-up phase is critical since it preserves the supplier relations, and at the same time deal with contractual issues.
The implementation of the Bailey et al. model in ROSHN itself highlights strong prospects for achieving advanced procurement sourcing strategies by mapping a significant investment in technology and infrastructure into Vision 2030 in Saudi Arabia. This structured approach is helpful to ROSHN of accomplishing its mission of delivering sustainable communities through the strategic positioning of suppliers and management of contracts.
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- In this integrative assessment for Corporate Award Program establishes it has provided a formal commercial negotiation for Occidental of Oman operating in oil and gas industry.
- Commercial negotiation plan has been developed by reference to data, factual information and CIPS tools. HSE and chemicals portfolio spend category has been identified and evaluated in-depth to come up with an appropriate negotiation plan.
- The importance of identifying the HSE and Chemicals are informed by the previous COVID-19 pandemic which has informed on the need for adopting healthy business environment which is free from any infections.
- Further, coming from the pandemic where the level of business operations had significantly reduced and the organisation need to restart their operations by cleansing their systems and machines. In this case, the need for HSE and the chemicals portfolio in Occidental of Oman has been in an upward trajectory.
- For negotiation successful implementation, Occidental of Oman involves professionals, terms and conditions initiated, holistic readiness and streamlined procurement and supply chain approaches. This is with good forecast and plans being core for guaranteeing customers services delivery on time.
- From the analysis, different tools including SWOT, PESTLE and 4R’s have evidenced that Occidental of Oman is always on the advantage of ensuring they achieve the Best Alternative for Negotiated Agreement (BATNA).
- Also, this report highlight the need for holistic planning by prioritising on all expectation from the initial opening to the closure and agreement phases of negotiation.