Pitfall 4 – Protracted Negotiations

In 2014 IACCM identified the ten most common pitfalls in contracting, since then we have been validating their economic cost.

We are now undertaking more in-depth research on each pitfall.

Pitfall 4 – Protracted Negotiations

Inefficient stakeholder engagement and review processes extend the cycle time to reach agreement. Top quartile organizations close deals in one quarter the time it takes the bottom quartile. Delays result in competitive exposure, extended time to revenue and often hasty decisions imposed out of frustration or the need for urgency.

The results of this survey will help you to compare your performance with others and discover more about the approaches to effective management of the negotiation process.

This survey should take no more than 5 – 10 minutes to complete; thank you in advance for your participation.

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* 1. Your function:

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* 2. Which industry do you belong to?

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* 3. What geographic region are you based in?

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* 4. What is the size of your company based on annual revenue (US $)?

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* 5. In answering this survey, do your replies represent:

Buy side

Sell side

Both buy side and sell side

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* 6. To what extent is the duration of contract negotiations seen as a problem in your business?

	Never	Sometimes	Often	Always
High Strategic Value Agreements	High Strategic Value Agreements Never	High Strategic Value Agreements Sometimes	High Strategic Value Agreements Often	High Strategic Value Agreements Always
Medium Strategic Value Agreements	Medium Strategic Value Agreements Never	Medium Strategic Value Agreements Sometimes	Medium Strategic Value Agreements Often	Medium Strategic Value Agreements Always
Low Strategic Value Agreements	Low Strategic Value Agreements Never	Low Strategic Value Agreements Sometimes	Low Strategic Value Agreements Often	Low Strategic Value Agreements Always

If you wish to expand on your response above, please do so here:

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* 7. Is your contracting process supported by any of the following (please select all that apply)

Negotiation playbooks

Contract Management Software that supports bid / negotiation phase

Defined empowerment and authorities

Use of IACCM approved simplified contract

Use of collaborative terms

Other (please specify)

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* 8. Does your organization have a formal and mandated negotiation planning methodology that is undertaken before beginning negotiations for any significant deal?

Yes

If there is a formal methodology, please explain what form this takes

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* 9. Do you actively involve those in the sales, operations, finance and delivery parts of the business in negotiation planning?

Never

Sometimes

Often

Always

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* 10. If your negotiations are less well planned than you would like, what stops you from planning more comprehensively?

insufficient time in your day

lack of availability of colleagues from other parts of the business

unsure how to plan/what to plan

business does not appreciate the value of negotiation planning

Other (please specify)

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* 11. Which of the following factors has most impact on the length of your negotiations? (Rank highest to lowest impact)

the pre-existing relationship between the parties

the quality of your planning

the value of the deal

the complexity of the deal

the communications channels/methods you have used

the qualities and abilities of the individual negotiators involved

the nationality/legal system of your counter-party

whether you have negotiated similar deals previously

whether your counter-party has negotiated similar deals previously

the degree of stakeholder buy-in, for both parties

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* 12. Are there specific terms that tend to cause more delay?

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* 13. As you consider the impact of different communication techniques, which method of communication leads to the greatest efficiency:

Face to face

Telephone

Webinar

Combination

No difference between them

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* 14. What are the negative impacts of protracted negotiations? (Rank highest to lowest?)

Negative impact on internal reputation of the contracts / legal function

Poor or risky decisions for example because executive demand closure

Missed deadlines elsewhere in the business

Competitive exposure / risk of losing business

Reputation with customer or supplier – ease of doing business

Increases the likelihood of non-compliance

Negative impact on long term relationship with customer or supplier

Negative impact on internal reputation and collaboration with key stakeholders

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* 15. What steps do you feel should be taken (or in your experience) have been taken to reduce the problems associated with protracted negotiations?

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* 16. Finally, thinking about your organization and the extent to which loss occurs today as a result of protracted negotiations, what is your estimate of the value that is eroded (this may be through missed savings, added costs or lost or delayed revenue, please express as a % of contract value:

	Less than 1% of contract value	Less than 2.5% of contract value	Less than 4% of contract value	More than 4% of contract value	More than 6% of contract value	N/A
Value is eroded in less than 10% of our contracts	Value is eroded in less than 10% of our contracts Less than 1% of contract value	Value is eroded in less than 10% of our contracts Less than 2.5% of contract value	Value is eroded in less than 10% of our contracts Less than 4% of contract value	Value is eroded in less than 10% of our contracts More than 4% of contract value	Value is eroded in less than 10% of our contracts More than 6% of contract value	Value is eroded in less than 10% of our contracts N/A
Value is eroded in less than 30% of our contracts	Value is eroded in less than 30% of our contracts Less than 1% of contract value	Value is eroded in less than 30% of our contracts Less than 2.5% of contract value	Value is eroded in less than 30% of our contracts Less than 4% of contract value	Value is eroded in less than 30% of our contracts More than 4% of contract value	Value is eroded in less than 30% of our contracts More than 6% of contract value	Value is eroded in less than 30% of our contracts N/A
Value is eroded in less than 50% of our contracts	Value is eroded in less than 50% of our contracts Less than 1% of contract value	Value is eroded in less than 50% of our contracts Less than 2.5% of contract value	Value is eroded in less than 50% of our contracts Less than 4% of contract value	Value is eroded in less than 50% of our contracts More than 4% of contract value	Value is eroded in less than 50% of our contracts More than 6% of contract value	Value is eroded in less than 50% of our contracts N/A
Value is eroded in more than 50% of our contracts	Value is eroded in more than 50% of our contracts Less than 1% of contract value	Value is eroded in more than 50% of our contracts Less than 2.5% of contract value	Value is eroded in more than 50% of our contracts Less than 4% of contract value	Value is eroded in more than 50% of our contracts More than 4% of contract value	Value is eroded in more than 50% of our contracts More than 6% of contract value	Value is eroded in more than 50% of our contracts N/A

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* 17. If you would like to receive a copy of the results of this survey, please enter your e-mail address here (you will not be quoted and your input will not be shared with any third party)