- A telecoms operator is awarded the license to operate its services in a country and is therefore in need of systems and solutions to deploy and roll-out its network as soon as possible to beat competition and gain market advantage.
- Standard prices are non-existent, relevant benchmarks are limited, there are very few suppliers to choose from and hardly any resources are available with up-to-date experience and know-how within the team. A golden opportunity for the supplier community.
- To make the challenge tougher, there are cash constraints and slim budgets and whatever price is finally agreed upon must match revenue streams from future customers.
- Suppliers quickly determine whether their client is a start-up, whether they operate on a single market, are part of an alliance or are operating globally as well as if the client’s sourcing team is experienced or not. Their opening offer is a clear reflection of their conclusion. Your hill to climb can be high as a mountain!
- Understand your suppliers’ situation; who is on the geographical market (and wants to defend their position) and who wants to break in, who is in most need of a “win” etc.
- Quickly create credibility and show that the scope is clear, volumes are known and future expansion plans are visible etc., as opportunistic situations like these lack standards for prices, pricing models and terms and conditions.
- As always, establish and increase your BATNA* and strive to eliminate or reduce your suppliers’ BATNAs*.
- Evaluate and negotiate technical, project, operational, legal and commercial aspects in parallel – avoid silos.
- Maintain competition until the end and note that the total cost of ownership is far more than just the unit price.
- Single-country operators reached and beat prices of global operators.
- Up to 50%+ savings were gained, which meant a lot – especially when the prices offered are in the hundreds of millions.
- Time-to-market was everything. When the finally reached price was high but the lead-time was shorter – it was considered going for it anyway.
- Proper handover of negotiation results to empowered contract management ensured that commitments were fulfilled and were not only words on a forgotten contract.
* Best Alternative To a Negotiated Agreement; a theory developed William Ury and Roger Fisher at Harward’s Program on Negotiation. See their book “Getting to YES” for further details.