Creating Commercial Options

Contracting.blog

In today’s Commercial Management environment, as with the past, commercial options are essential to our success.

We need options and alternatives in case we cannot secure our optimal outcome.  The adage, “better to have 70% of something than 100% of nothing”, holds true in so many of our discussions and negotiations.  Resolving issues is not a binary model.  We look for options other than all or nothing.  This has held true throughout the ages.

However, there is now an additional reason for us to develop and define commercial options – the technology which we will utilize in the Fourth Industrial Revolution.  Artificial Intelligence and other technologies do require programming, which in turn will be based upon logic and a plan.  There will need to be clearly pre-defined rules, guidelines, heuristics and flow charts in place as we migrate to the IR 4.0 tools – all based upon discussions, reviews and approvals from across our commercial enterprise.

Unlike our prior commercial plans, the next generation of commercial planning will require just that – planning!  We will not be able to “make it up as we go” or “just wing it” when our automated processes require specific commands and deliberate programming.  Technology will rely on the humans to develop the strategy and weigh the options, deciding which option is most desirable, least desirable and rank all of the other options in between.

Our commercial success, and the yield from our contracts and commercial relationships, will depend on the extent of our options.  We will succeed if we have options, and if those options are thoughtful and logical.  The advent of technology will force many commercial management practitioners to create something which has usually held a long-standing place on our To-Do lists.  Technology will force us to create options, define those options and create a game plan related to those options.

Your thoughts?

Published by Contracting.blog

Jim Bergman is a commercial contract professional with global experience spanning the USA, Latin America, UK, Europe, China, South Korea, Japan, India, SE Asia, the Middle East, Africa and Australia. He has worked on a wide range of direct and indirect spend categories in numerous sectors, developing a deep knowledge of services, goods and technology procurement and sales. Across this wide array of commodity and services experience, Jim has found the keys to success in maximizing value for money through customer-supplier relationships founded on innovative category management and strategic sourcing practices, key performance metrics and measures, as well as Total Cost of Ownership principles and collaborative contracting tenets. He has shared his knowledge through advisory engagements, as well as in developing and delivering training programs both on-line and in classrooms, in both open-enrollment and internal environments. Jim has assisted his clients through all phases and steps of contracting, negotiation, strategic sourcing and bidding processes, demonstrating value generation in excess of $250 million. His audiences and clients have included over 7,000 attorneys and commercial professionals students from over 1,000 corporations and public-sector entities.

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