Newsletter - July 2017 Print

Welcome New Members

Welcome New MembersVillage of Rothschild

The VALUE Planning Committee would like to welcome the Village of Rothschild to the VALUE in Local Government organization!

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The 7 Habits of Highly Ordinary Negotiators

The 7 Habits of Highly Ordinary Negotiators
Part 2 of 7
Negotiations

by Omid Ghamami
https://www.purchasingadvantage.com/blog

This 7 part series is based a quarter century of me going to hundreds of companies in 21 countries and 5 continents across all industries and sectors.  I’ve witnessed great practices and mediocre practices.  From this experience, and from the biggest gaps between where we are and where I envision we can be, I’ve derived the following blog series, focusing on the The 7 Habits of Highly ORDINARY Negotiators.

Habit #2  is “Focusing on Transferring Value instead of Creating Value in Negotiations”.

Do you want to know the best business deal I ever brokered?  You can’t imagine how much money I made in this spectacular negotiation.

Did you guess?  Here’s the answer:  I made exactly NO money at all – zip, nada, and it was the best deal of my business career.  How could that be?  Read on.

An association in Brazil contacted me and wanted me to keynote their purchasing conference.  Problem was, all they could pay for was my costs – they couldn’t pay me any fee whatsoever.  Discussion over, right?  Not so fast.

The best negotiators don’t negotiate what’s on the table, they negotiate what’s not on the table too.  So we kept discussing.  Then I found out they were going to have a professional videographer film the event, along with professional editing.

I asked them if I could have intellectual property rights to the video.  They said “sure, why not”.  I said “when do you want me there?”  It cost them absolutely nothing to give me that video – they just sent me a link – and they got a world class speaker for pennies on the dollar in return.

So why did I do it?  What did it buy me?  That same video is THE MOST WATCHED purchasing training video on the internet for 4 years running now.  If you don’t believe me, just type “purchasing” in YouTube and it will always rank first, based on views and popularity.

So why was this my best deal ever?  Because this video has generated tons of easy new business for me.  Decision makers watch it from various parts of the world, and these people that I’ve never met contact me with the decision already made that they want to hire me.  No RFP responses, no reference checks, no messing around.  That  video has easily made me over a million dollars.

So why am I telling you this story?

Our entire profession has been trained for decades to use aggressive strategies and tactics in order to ensure achieving aggressive cost savings objectives, always at the expense of supplier profitability (where else is the money going to come from?).  Unfortunately, most of the negotiation training out there continues to proliferate this 1960’s approach.

All of this stems from the Fixed Pie Bias – the belief that there’s a fixed amount of value in negotiations, mostly found in price, and your ability to use aggressive techniques in negotiations will get you most of that pie.   One party wins, one party loses, but we will call it win-win at the end because that’s what both sides are taught to do.

This is what rookie negotiators do.  If you’re doing this, you need to stop now.   If you are using various negotiation “techniques” and “tactics and counter-tactics” to get your suppliers to make less profit  so you can report more cost savings, then all you are doing is TRANSFERRING VALUE.   You’re taking value away from the supplier and giving it to yourself.  And you are an ordinary negotiator, even if you do it better than others.

The supplier has what you want, and you’re going to get it, on your terms, and that’s how you define success. That’s the entire focus of highly ORDINARY negotiators, strategizing on how to transfer value from the other party to themselves.   That’s really not different than kids fighting over a toy in the playground.  Neither kid cares about anything other than getting that toy from the other kid.

Do you think a supply chain can be predicated on each demand-side  link trying to transfer value to themselves, to the detriment of the supply side link?  Don’t all these costs being pushed around roll down hill in the supply chain anyways?

What the world’s best negotiators do is they are absolute experts at CREATING VALUE.  They don’t just negotiate what’s on the table, they instead they focus on investigative strategies to determine not just what the positions and issues are, but also what the INTERESTS are of the other side – things that aren’t on the table, and never will be, unless you do intense pre-negotiation investigations.

If you don’t take time to research the other party’s interests, then you can only make assumptions about what the other party values in negotiations, and the ONLY assumption you can correctly make is that they want your money.  Well, guess what you’ll end up negotiating over then?

You are setting your negotiation up for a battle over Value Transference of the money.  Why?  Because you presupposed that the only thing the supplier was interested in was your money… it’s a self-fulfilling prophecy.

Here are just a few real and very recent examples I’ve either seen or actively participated in as a negotiation expert:

  • Healthcare company getting critical new technology at COST at high volumes no less, because it was determined that the supplier was a startup and their focus wasn’t money, it was getting a proof point in the healthcare industry established.
  • High volume residential and commercial builder getting all lumber at well below 50% of commercial market rates because they allowed the supplier to co-use one of their customer facilities for product demonstrations in an area that the supplier had no marketing presence.
  • A clothing company created the idea to negotiate to visibly place the supplier’s logo (the fabric supplier was very famous) on their athletic clothing product lines in return for a 5% discount – not much right?   Guess what, sales jumped 55% after adding the supplier’s logo to their athletic lines! The supplier helped make this happen by adding product benefits under the logo such as “UV A resistant, UV B resistant”, etc.

 

I don’t have enough space to keep going.   I have many more that I use in my training and consulting engagements.  You get the picture though.

The bottom line is, even the most rookie negotiator can determine what a supplier’s Issues and Positions are.  It’s right there on their quote!  It takes a world class negotiator to dig deep and ask questions and do research to find out what the supplier’s underlying INTERESTS are – and those are never found in the supplier quotation.

Once you find out their interests, then you can engage in pre-negotiation strategies to Create Value – value that doesn’t cost you much, but buys you a LOT.  Then you can negotiate to exchange that value for the money you are trying so desperately to keep in your company’s bank account, but with this time, with the supplier happy to comply.   Problem solved.  Ditch those 1960’s tactics and move onto 21st Century procurement models.

Now go off and do something wonderful.

Be your best!

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American City & County

American City & County

Working together

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Meeting Minutes

Meeting Minutes

Minutes of the VALUE Meeting
June 21, 2017

Present   
  Name Organization
 x Barwick, Robert City of West Allis
  Fleming, Matt Kenosha County
  Hartmann, Roy Washington County
  Jacobson, JoAnne Port Washington/Saukville School District
  Jeffries, Karen City of Milwaukee
  Kurer, Bill Washington County
 x Martin, Catherine Waukesha County
McKinney, Duane Racine County
Matz, Cindy Walworth County
Nash, Vicky Waukesha County Technical College
White, Jen Milwaukee Metropolitan Sewerage District
Schaack, Beth City of Waukesha
Schleimer, Laurel City of Wauwatosa

 

 

 

 

 

 

Common Solutions / Open Forum Discussion

Cindy Matz asked about the methods others use to collect and recycle electronics from the general public.  Walworth County recently received an offer from a company in Illinois who is willing to collect electronic items because they want to expand their business into Wisconsin.  The only charge would be $10 for disposal of a television.  Robert Barwick indicated that West Allis charges $20 for disposal of televisions.  The concern was raised by the group that people may not want to pay the $10 fee and that Walworth County should consider paying the fee, so that people do not dispose of the televisions on the side of the road, rather than pay the fee.

Laurie Schleimer asked if anyone has and interview questions they can share for evaluating responses to an RFP for financial enterprise systems for a purchasing module.  Duane McKinney and Robert Barwick indicated they may have some questions from the RFPs they conducted recently.

Catherine Martin indicated that Waukesha County is looking for a Senior Buyer and requested that you refer anyone you know who may be looking.

Business Meeting 

  • Treasurer’s Report as of 4/30/2017:

Checking:  $15,030.08
Savings:  $10,011.14

  • New Members:  The Town of Herman is considering membership.

 

  • Audit Procedures – We discussed asking JoAnne Jacobson what tasks are currently being performed for our audits.  Robert Barwick indicated VALUE cannot obtain a p-card because we don’t have all the right documents filed with the State of Wisconsin, as we are technically part of the Wisconsin Association for Public Procurement (WAPP).

 

  • ByLaws – We discussed what our new focus should be, given that the current reason for entities to join VALUE is due to the VALUE bids.  Robert indicated the VALUE bids filled in the gaps that the State didn’t have contracts for.  However, the number of VALUE bids needed have recently decreased.  If there is insufficient income to maintain the group, we need to refocus our mission.  Ideas generated included:
    • Which cooperative bids provide the best value for your money, and why.
    • If our focus is to plan the March meeting, charge enough for meeting attendance to cover our costs
    • Create a mentorship program for using cooperative programs
    • We could survey our membership if we determine what “gaps” there are that members need filled.
    • Determine if a “shopping cart” feature could be implemented on the VALUE website that the membership can competitively shop for items on contract (similar to the State of Wisconsin’s).  Amazon will be on ESM soon.  Vicky Nash will follow-up with ESM to see if VALUE can join, then offer this to the VALUE membership.  Cindy will follow-up with SciQuest.
    • Capitalize on the experience at our VALUE meetings – the Common Solutions – and provide a reward for sharing your experience.  We could perhaps call it “Ask an Expert” or “Tell us what you did well”.  Perhaps we could add a “member connect” feature for VALUE members to ask questions of the group.  Approximately 2/3 of the VALUE membership are not members of WAPP.

 

  • Strategic Business Plan – We reviewed and discussed our current Strategic Business Plan.  It was decided this document would need updating after we determine what our new vision will be.

 

Cooperative Purchases Update

Robert Barwick indicated the crack sealant bid is on the street and includes mastic.  Mastic is a material that fills bigger cracks in the pavement.

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Piggyback Updates

Pig

Below are changes or additions to the various piggyback opportunities available to VALUE member agencies.  Visit the piggyback page on the VALUE website, and click on the Pig to see the full list.

Do you have a contract to add to the list? Contact cmatz@co.walworth.wi.us to add your contracts to the piggyback list!

New Contracts

Concrete & Asphalt Disposal
Harp Lamp Fixtures
Ready Mix Concrete
Slurry Mix

 

Contract Extensions

Information Technology Management Services

 

Contract Expirations

Vehicle Parts

 

 

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State of Wisconsin Contract Updates

Wisconsin

Updates to State of Wisconsin contracts are issued weekly by the State of Wisconsin.  VALUE is reprinting the weekly information received as a courtesy to our members. 

The following contracts have been updated for the week of 6/12/2017 - 6/16/2017:

505ENT-O14-BROADISP-00 Broadband Internet Service Provider (ISP) Services - CenturyLink is extended through end of October 2017.

505ENT-M15-PROPANESVC-00 Propane / LP Gas – Statewide - Updated vendor contact list.  Added updated price list.

505ENT-M13-ELCPLSUPLS-00 MRO-Electrical and Plumbing Supplies (including Lamps and Ballasts) - Added language to advise on upcoming contract 505ENT-M18-ELCPLSUPLS-00

505ENT-M14-FUEL OILSW-00 Fuel Oil – Statewide Locations (State-wide contract for fuel oil, dyed for off-road use only) - Extended contract renewal through July 17, 2018.

505ENT-O17-DOCUMENTMGT-01 DOCUMENT MANAGEMENT CONSULTING SERVICES - New contract

505ENT-O17-DOCUMENTMGT-02 DOCUMENT MANAGEMENT CONSULTING SERVICES - New contract

505ENT-O17-DOCUMENTMGT-03 DOCUMENT MANAGEMENT CONSULTING SERVICES - New contract

 

The following contracts have been updated for the week of 6/19/2017 - 6/23/2017:

505ENT-O15-FLOORING-00 Statewide Flooring Including Commercial Carpet, Resilient Coverings (Virgin and Recycled) and Related Services - Added Products for Halverson

505 ENT-M15 COALDELVRY-01 Bituminous Coal Supply & Management Services - Contract expires on June 30, 2020

505ENT-M15-TEMPHELPSV-00 Non-IT Temporary Help Services (for Assignments Twelve (12) Months or Less) - This contract will not be renewed. RFB has been awarded to establish a new contract. Contracts are being executed.

505ENT-O16-ELECRECYCLE-01 Recycling of Electronic Waste Services - Updated documentation to reflect that Cascade Asset Management is no longer a certified Minority Business Enterprise.

The following contracts have been updated for the week of 6/26/2017 - 6/30/2017:

505ENT-O16-NASPOCOMPUT-00 NASPO Computer Equipment, Peripherals, and Related Services - The "Quick Guide to use the Contract" (version 5) and the "Excel File with Bands, Contractors, Auth Resellers and STAR info" was updated with an updated link for Fujitsu.

505ENT-M15-MFDCOPIER-00 Copiers and Related Devices - Further updates to the Sharp Authorized Dealer information and applicable ordering instructions.

505ENT-O12-MAILEQUIP-00 WSCA/NASPO Mailing Equipment, Supplies and Maintenance - This contract has been extended until October 11, 2017.

505ENT-O16-SAFETYCOMM-00 NASPO Public Safety Communication Equipment - Updated Contract Scope section and Contractor Band Summary document. Added new vendor (Alcatel-Lucent).

505ENT-M15-SECGRDSVS-00 Security Guard Services - Contract has been renewed for the first term; July 1, 2017 thru June 30, 2018

505ENT-O17-EQUIPMAIN-00 EQUIPMENT MAINTENANCE COST REDUCTION PROGRAM - 1st contract renewal - 7-1-2017 to 6-30-18.

505ENT-M15-DATAENTRYS-00 Data Entry Services - This contract will not be renewed. RFB has been awarded to establish a new contract. Contracts are being executed with TriShulla and TDEC. New contract will be posted when contracts are fully executed. During the transition period, users should use best judgment authority to purchase these services.

505ENT-O15-FLOORING-00 Statewide Flooring Including Commercial Carpet, Resilient Coverings (Virgin and Recycled) and Related Services - Added Flooring Products for Coyle and Sergenian's

505ENT-M18-ELEVATORSV-00 Elevator Maintenance and Repair Services - New Contract

505ENT-O18-CONELCWPNS-01 Conducted Electrical Weapons (CEW) and Related Accessories - New Contract

505ENT-M18-ELCPLSUPLS-00 Electrical & Plumbing Maintenance, Repair & Operating Supplies (MRO) - New Contract

505ENT-O18-LABEQPMENT-00 Laboratory Equipment, Supplies, Chemicals & Educational Materials - New Contract

 

The following contracts have been updated for the week of 7/3/2017 - 7/7/2017:

505ENT-M17-RATECERT-00 Class 5 Legal/Public Notices: Rate Certification Program - Certification Rates Bulletin updated for July 2017

505ENT-O13-BADGERNET-00 Alternate Internet Access for BadgerNet Authorized Users - Updated contract administrator and contact information

505ENT-M18-ELCPLSUPLS-00 Electrical & Plumbing Maintenance, Repair & Operating Supplies (MRO) - A PeopleSoft transactional contract for Production Distribution Companies is now available. Gexpro is still pending.

505ENT-O13-POWERTOOLS-00 Hand and Power Tools - Contract has been extended to 12/31/2017

505ENT-M17-WICOMPUTER-00 Computer Equipment and Related Services - Updated the Quick Contract Guide (version 7)

505ENT-O16-NASPOCOMPUT-00 NASPO Computer Equipment, Peripherals, and Related Services - Updated the Excel file with Bands, Contractors, Auth Resellers and STAR info

505ENT-M16-NATURALGASWI-00 Natural Gas Supply & Management Non-Firm - Extended Contract term to 12/31/18

505ENT-C10-LABEQPMENT-00 Laboratory Equipment, Supplies, Chemicals & Educational Materials - Contract expired 

505ENT-M15-TEMPHELPSV-00 Non-IT Temporary Help Services (for Assignments Twelve (12) Months or Less) - Contract expired

505ENT-M18-TEMPHELPSV-00 Non-IT Temporary Help Services (for Assignments Twelve (12) Months or Less) - New Contract

 

 

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NIGP Webinars

NIGP

NIGP Webinars

Olive Branch of Data:  Building Departmental Relationships Through Strategic Outreach

Date:  July 25, 2017
Time:  1:00-2:30 CST

By providing spend visibility to the departments, Clemson University’s Procurement Team now has the ability to forge stronger relationships with campus departments. Aubrey Miller, the Business Data Analyst for Clemson’s Procurement and Business Services will share a Departmental Spend Review for the Clemson Athletics Department and how it was used to position Procurement as a strategic and advisory partner. Additionally, the Spend Review enhances campus knowledge of Procurement’s value-added services. We will also discuss the importance of collecting good quality and timely data sources. 

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