If you are good at what you do, and let’s assume for the sake of argument that you are, then this is what you have in your holster when you enter into contract negotiations with your firm’s vendors: detailed benchmarks of your current contracts to show how they stack up in today’s marketplace.
Ideally, this benchmarking would show what other firms of similar size and geographic presence were outsourcing and what their pricing and terms are. Ideally, it might also contain the current market strategies on near-site and hard cost pass through cost recovery solutions.
That’s not just the good, that’s the best case scenario for your firm for entering into contract negotiations.
Well, as quoth Tuco, there are two kinds of people in the world, my friend.
Hypothetically speaking, what if the situation weren’t best case scenario, if the firm’s management sat down at the negotiation table with empty holsters, without benchmarks or data analysis to compare what their peers are practicing?
Or, put it this way, which is the way the Director of Firmwide Vendor Relations at a national law firm for which we recently completed dual RFPs, “Vendors come back with numbers, but if I do not have access to the most current benchmarks, what good are those numbers?” (Read that full case study here).
I don’t know why a person would enter into negotiations without this relevant information; however, let’s assume for the sake of argument that this happens occasionally, that there is this ‘second kind’ of person in charge of their firms’ contract negotiations. This is not the best case scenario.
And this is where it gets ugly.
What happens here is that this hypothetical other kind of person ignores poor sales performance, lack of geographic coverage, restrictive terms and conditions, non-competitive pricing, and then bemoans the fact they didn’t not get the most competitive deal for their firm. And sometimes—hypothetically speaking, of course–this person on the heels of failure, may initiate the blame game: the clients, the vendors, the market, and acts of God.
Hypothetically, I would suggest to this other kind of person, had I ever come across one, shake the ugly and get back to good: look in the mirror and develop an honest assessment of weaknesses and strengths; know the right tools to bring to a negotiation, and bring them. And if you fail, resist the blame game.
Just do better—that’s what work is.
Enjoy the holiday weekend.