Oct 28, 2020 | Blog
During the course of a year, businesses negotiate countless contracts – securing new partnerships, renegotiating old terms, and acquiring new stock, facilities, technology, etc. All are essential to keeping business fresh and profitable, but they don’t just happen on their own. Successful negotiations require solid preparation. Without it, it’s all too easy to get stuck with unacceptable quality, terms you don’t want, or even for an agreement to fall through altogether. That being said, though, what does proper prep work look like? Here’s a quick rundown on how you should prepare for negotiations.
The Old-School Way
There are essentially two schools of thought when it comes to getting ready for negotiations. The first is the old way, which insists on doing significant amounts of work the way it has always been done. Rather than relying on helpful new technologies or resources to do the heavy lifting, this planning approach heavily pushes you to:
Identify your needs from new business agreements
Analyze the potential needs or motivations of the counterparty
Analyze your perspective
Prepare a BATNA (or best alternative to a negotiated agreement)
Recognize the true worth of your goods/services
Weigh the potential rewards and benefits of an offer against its risks.
Of course, these should all be on your to-do list regardless of how you use new tools to your benefit, but with this approach, these points are all achieved with good, old-fashioned skill and know-how. They simply require a little more finesse and technique than if you utilize new machine learning to your advantage. Knowledge of your product, stakeholders/negotiating parties, and company goals are an absolute must, which will seriously restrict who can sit at the negotiation table and still get things done. It makes this more of an elite club. There are benefits and advantages to that, to be sure, but this can also be a major disadvantage depending on circumstances.
Work Smarter, Not Harder
Once upon a time, this more hands-on preparation was the norm, but it tends to look a little different nowadays. Now one of the best ways to prepare is to utilize machine learning. Confused about how that tech fits into the contract negotiation sphere? Well, ML has actually proven to be a huge help. It can be utilized to do much of the same things as would be taken on by your business team, getting information about the other party’s history and negotiation style, predicting and evaluating possible outcomes, and even finding areas where negotiation process management can become automated.
This information is gotten from several different avenues, pulled from public data, social media, and the like before AI consolidates this into figures that can predict the value of proposed bargains. Live models can also be crafted to respond to new information as it is recorded, evaluating any potential strains on resources and guiding you to make smart, informed decisions before agreeing to any terms. The end result is better, faster, and more efficient negotiations. Turns out, working smarter rather than harder pays off in the end.
About Intellext™
Intellext is an AI startup that is revolutionizing the way contracts are negotiated, accelerating time to close, and improving deal terms. Intellext’s Intelligent Negotiation Platform™ eliminates the complexities of contract redlines and stakeholder collaboration and optimizes deal terms by applying machine learning during the negotiation process.