Negotiation skills from the PM's perspective

Abstract

The procurement process of a project or program typically involves in its initial steps the performance of bidder conferences, in which potential sellers are gathered in order to understand the main proposal and future contract requirements. The outcome of such meetings for the contractor is a clearer overview of the most proficient sellers, which are therefore given priority during the contract bidding process. In this regard, not only understanding the procurement process from the buyer’s perspective, but also developing appropriate negotiation skills is essential for a Project Manager to optimise their chances of obtaining contracts as a seller or service provider. For instance, being able to ask relevant questions about the concerned project or program may indicate experience and professionalism. Likewise, building up traditional relationships with contractors shall be prospective operationally wise in the long term. Establishing a proper negotiation strategy is, therefore, perceived to be significant for a project manager to increase their opportunities of acquiring contracts as a service provider.

Introduction

It is fundamental for a Project Manager to hold fair negotiation skills, not only to adequately cope with issues during the project lifetime, being those related either to the internal or external stakeholders, but also to build trust in business’ relationships. The long term success of certain enterprises is understood to be based in well-established connections between groups and individuals that constantly will to support its development, following the favourable conditions which outcome from such bonds. This cooperative mindset has led most of the biggest ventures to set a new approach for making business, on which the competition was replaced by an idea of creating greater values together. This innovative strategy is justified by three main factors: *Future considerations: focusing excessively on short term results might compromise opportunities with higher potential of outcome in the long term. *Win-Win framework: by providing benefits to the counterpart in a negotiation, eventual rewards with greater value may come in return. *Trust: Developing trust-based relationships reduces the necessity of spending resources on monitoring the partner’s behaviour towards following the contract terms and conditions. Based in these concepts, a project manager at the seller’s position (or the one bidding for a contract) shall design their negotiation strategy to adequately approach a contract bidding process.

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This innovative strategy is justified by three main factors: Future considerations: focusing excessively on short term results might compromise opportunities with higher potential of outcome in the long term. Win-Win framework: by providing benefits to the counterpart in a negotiation, eventual rewards with greater value may come in return. Trust: Developing trust-based relationships reduces the necessity of spending resources on monitoring the partner’s behaviour towards following the contract terms and conditions.

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The way to visualise a negotiation process is also decisive on defining the characteristic of the accord. Whether one of the involved parts does not approach the deal from a visionary and long-term perspective, attributing little importance to the relation with the counterpart, it becomes prone to be limited to a single occasion already from the beginning. It is therefore essential for the Project Manager at the seller’s position to treat the process as a possible mean of creating a permanent bond with the potential client, or partner in that case.