Better Buyers Communicate

June 25th, 2007 at 06:07am David Bush - Iasta

In this month’s Negotiator Magazine, Charles B. Craver published an article on Conducting Electronic Negotiations which had some interesting insights.

The nature of bargaining is that it involves personal interactions. It is difficult to have good personal interactions conducted entirely in writing. Before you conduct a sealed-bid negotiation or auction on-line, be sure that you are comfortable with the supplier, and its personnel, and that they are comfortable with you. Before any new supplier is fully qualified and allowed to bid, you should have had interactions with them in person if at all possible, or at least over the phone, to get a feeling for who they are, what they bring to the table, and what they’ll be like to work with.

Besides, as Charles pointed out, several interesting studies have been performed regarding electronic negotiations and they all appear to indicate that electronic negotiations preceded by personal interaction lead to more efficient arrangements. If the parties know each other, this is much more likely to foster cooperation and mutually beneficial agreements.

Furthermore, the article notes that when individuals receive written proposals, they tend to read them carefully, and they often read too much or too little into specific terms. They assume that the sender’s proposals are self-serving and somewhat manipulative, even when this is not true. They may thus interpret fair proposals as unfair, and respond accordingly. They may quickly escalate the battle and generate a similar response from the offended original sender.

The article implies that this is less likely to happen if the participants have a relationship before the proposal is sent, particularly an on-going one, and that any unintended misinterpretations, and the negative emotions that can result, can be minimized if proposal senders call the recipients shortly after sending the proposal to get their feedback, ask questions, and agree to language substitutions that convey the same message but do not offend or worry the recipient.

Although one hopes that the recipient of a message never misinterprets the intent, especially when such intent is good, the reality is that the recipient is not an electronic tool, but a person, and it’s just human nature. When you get right down to it, e-Sourcing is not about replacing paper with technology, its about utilizing technology that enables people to be more productive and collaborative in their efforts. A good tool makes a buyer much more efficient and productive (especially in the savings department) - it does not replace the need for the buyer, or the critical relationships she can bring to the table.

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Entry Filed under: General, Supply Management Best Practices, Technology / SaaS