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Let’s turn back the clock …

September 27, 2016

There are few better ways to establish irrelevance than to be a barrier to change. Could this be the fate awaiting many business negotiators and contract managers, if they continue their reluctance to embrace technology?

IACCM’s most recent survey explored the challenges of ‘protracted negotiations’ – an issue which we know frustrates many senior executives. With technology driving and accelerating most business processes, the world of contracting is an increasingly visible stand-out and barrier to the digital world. Even in those organizations where change is occurring, it is rarely led by the practitioner community. Too often, change happens around and in spite of those who (from a role and function perspective) should be its leaders.

In the survey, practitioners acknowledged the need for faster turn-round times, but the results revealed that current steps are having minimal impact. There is a reluctance to embrace or promote the steps needed to achieve improvement. For example, in many cases they simply want to go back to the past, with over 70% believing that more ‘face to face’ negotiation is the answer. Perhaps they believe that if they just wait, the rest of the world will see the light and the digital world will go into reverse.

There have been plenty of people in the past who shared that belief. Some were even proactive in destroying the technology that they considered their enemy. They did not fare well.

The reality is that negotiation and contract management processes will be supported by automation and it will result in streamlining and improving business results. It is my hope that those who understand these fields best will grasp the opportunity to define their future.

For almost 20 years, i have observed a similar problem with contract management software. Rather than work in harmony with the application providers to develop practical systems that deliver superior results, the contracts and legal community has mostly preferred to stand on the sidelines and criticize. Now we are seeing similar reactions to negotiation software, even though IACCM tests have shown the potential that software has in driving vastly superior negotiated outcomes. In fact, we found that face-to-face negotiation is the problem, not the answer.

Dynamic systems are starting to emerge (for example, from Synergist), where organizations can establish value-based trade-offs, rather than the typical compromises or power-based settlements of today. They reach agreement faster and are far more likely to generate win-win results. But while some practitioners are interested by this direction, most find multiple reasons why it won’t work, or set unrealistic pre-conditions even for running tests or a pilot.

To flourish in the future, people must be ready to innovate, to experiment, to take risks; or they must at least have the courage to imitate those leaders. Because if we are not either innovators or imitators, we are consigned to Warren Buffet’s third category – the idiots. And that is not a good place to be.

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