I think one of the most disappointing outcomes from contract negotiation is that between corporations and TMCs. You can practically guarantee that one side or the other, or in time both, are not enamoured with the end results. The corporation wants total priority and service delivery at the lowest unit price whilst the TMC spends its time trying to figure out how to comply whilst clawing back profitability elsewhere in the deal or through caveats.
Another disappointment is that many of these negotiations are so combative. It is almost like trying to play a game of poker where the TMC has to play with his cards face up and the corporation with theirs to their chest. How can you get a good result when the beginning is riddled with various levels of speculation and possibly deceit? There really must be a better way.
I would really like to see such methodology turned 180 degrees. The RFP should be changed to an IFB (information for bidders). This IFB would say, "Look, this is what we think we really want," and "Here is a list of the important things in priority. Can you think of anything you could add to improve our service and savings? Here are the problems we currently have, and how can you help resolve them?" The corporation would then receive an inflow of pertinent and creative ideas rather than getting a load of bland "comply/not comply" answers to a bunch of sometimes irrelevant questions.
Having narrowed the field down to those TMC that have shown the right level of flair and innovation, one could then move on to what they are hoping to achieve from winning the contract in both money terms and ongoing partnership. This would be much better than dragging in a TMC that has been cut to the bone, and is frankly going to favour the client that brings more revenue and longevity.
Having now discovered what both parties want, it is time to sit down together and thrash out how both can be achieved with as little need for compromise as possible. I can think of lots of ways to doing this in a way that protects commits and rewards.
Otherwise I guess people can continue what they are doing now. Issuing an RFP the size of a small book to TMCs who will be initially judged on how they answer a bunch of questions that really do not address the real issues. After all, the large TMCs can answer the questions any way they think you want to hear them and are probably already handing numerous Fortune
500 companies who asked the same.
So there we have it. Naive? Workable? Or both?
Your guess is as good as mine!This post was republished with permission from the blog of former managing director of HRG UK Mike Platt