What is the Value of Negotiation Skills in Public Sector Procurement?

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Negotiation Skills1.jpgDuring the recent Advanced Negotiations Skills Workshop, hosted on the 23rd & 24th of July 2008 in Centurion by SmartProcurement, several interesting issues around the whole 'skills-set' were raised and debated. The workshop was facilitated by Tom Beasor who hails from the UK and has consulted to companies and organisations in over 30 different countries across the globe during a career that spans the past 20 years.

Tom Beasor.jpgPrior to consulting, he trained and practised as a teacher and then spent many years in the business trenches of the world, concluding multi-million dollar deals (the experience which lead to his expertise). Beasor (pictured left) is so intrigued by the 'practise of persuasion' that he has authored two books on the subject, namely Business Negotiation and Great Negotiators.  Workshop delegates were accordingly given the benefit of several 'war stories', as from the books, whilst being taught in a 10% tutorial and 90% application style
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In answer to the question, what is the value of negotiation skills in public sector procurement, Beasor told SmartProcurement that, "in my experience the key challenges facing all negotiators are the three core aspects of the business communications process, namely, 'Value', 'Relationship' and 'Ethics'. Our job (as negotiators) is to create value.  We are, and that's all of us, a 'cost to company', thus the question is, what value do we actually add to our company or organisations in the process of acquiring the necessary goods and services?  After all, a buyer's job is to procure resources that add value for the organisation."

Another point of view is to ask whether procurement is merely a lame 'shopping department' or, if it is actually involved with building sustainable relationships that are profitable to the company.  "I think that at the end of the day, your supplier relationships - whether in the private or public sectors, are the foundation for your department to meet its core business objectives", Beasor contends.

"The third aspect, namely ethical behaviour, is embedded in all our policy and procedure documents and thus forms the basis of our professional 'Code of Conduct'. We certainly are not moral nannies, yet, for instance, we can never lie as it is simply bad for business", Beasor points out with conviction.

Without doubt and in his view, all this applies equally to the Public Sector which is, fundamentally, 'contract-based procurement'. In the public service environment, the value-base is defined and agreed on by tender. So, what is negotiated or tendered? "My view is that the public sector procurement process still relies on negotiations to a great extent, especially post-contract". "All government departments are tasked with service delivery to all citizens in the quickest manner, with top notch service levels and, at the least cost to budget. This is, in essence, no different to what the private sector is about. Yet clearly, the role of negotiations in government, Section 21 companies and Non-Government Organisations (NGO's) is to a large degree paper-based and that is simply another layer of expertise to add to the skill of negotiating.  It is, for example, critical that the public sector negotiators are trained in the art of drawing up a detailed brief for suppliers, drafting the specification to the satisfaction of the end-user and affording the tenderers every opportunity to fulfil the organisations requirements".

All the elements of making a sound decision remain the same, whether you are behind a desk in the Union Buildings or at an Airline:
  • Do I know how to cut a deal?
  • Is it a once-off 'spot deal' or does it require a solid relationship with the supplier?
  • What does the market look like right now?  Can I afford to wait another month in the hope that the price of brent crude oil will come down?

"Simply put", Beasor concludes, "negotiating is a tactical tool in the hands of the procurement practitioner, whether he / she serves the public or not.  It is the means by which you achieve your strategic professional objectives and, by which you fulfil your purpose within the organisation. And, let's not forget that, according to a recent survey, the key differentiator between organisations is no longer the product or service you deliver, but rather the level of training of your personnel."

If you have any queries about how to use negotiation effectively in your organisation, or if you would like more information about Tom Beasor and / or his organisation, please contact admin@smartprocurement.co.za.  

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