Interests vs Position in Negotiations — Scenario 4 — Supplier Selection between Procurement and IT
Practical example on how to separate position and interest in a conflict between Procurement and IT over supplier selection, to align technical and financial criteria.
When Procurement evaluates only price and IT does not participate in scoring, the decision can be technically unfeasible. Separating position and interest allows redesigning the RFP with weighted criteria that align both areas.
Below: context, objectives, blocker, extraction of positions/interests, and practical options to move forward.
Scenario 4 — Supplier Selection between Procurement and IT
Conflict: Procurement has two offers — a cheap one with limited support and an expensive one with deep integration. IT prefers the latter; Procurement wants to save.
Context
Procurement has two offers: a cheap one with limited support and an expensive one with deep integration. IT prefers the latter; Procurement wants to save.
Objectives
Procurement: reduce total cost of ownership. IT: minimize risk of downtime and integration issues.
Blocker
Lack of technical input in the formal evaluation (poorly designed RFP). Procurement evaluates only price; IT is excluded from scoring.
Scenario detail and practical reminder
Practical note: In supplier selection, choosing only by price often generates hidden costs (support, integration, downtime). Including technical criteria and TCO in the RFP avoids technically unfeasible decisions.
- Summary context: Two offers: one economical with limited support, one expensive with deep integration.
- Risk for Procurement: choosing a technically unfeasible solution can generate operational and reputational costs.
- Risk for IT: supporting a solution with little integration or support can cause downtime and operational overcost.
Interests and positions
Procurement
Position: Select the cheapest offer.
Interests: Reduce spending and meet savings/contract goals.
IT
Position: Select the more expensive supplier with better integration and support.
Interests: Reduce risk of failures, ensure effective integration, and minimize long-term operational costs.
Difference between position and interest in this case
The position is to choose option A or B. The interest is to minimize total cost and operational risk.
By distinguishing them, the RFP can be redesigned to include technical criteria, total cost of ownership (TCO), and weightings that align both interests.
- Examples of interest-based solutions (not just position-based):
- Review and redesign the RFP: include technical criteria (uptime, SLA, integration, support) and weight them alongside price.
- Calculate TCO (Total Cost of Ownership): include implementation, support, maintenance costs, and downtime risk.
- Create a mixed evaluation committee: Procurement + IT + Legal to ensure technical and financial criteria.
- Define weighted scoring: e.g., 40% price, 30% integration, 20% SLA, 10% support.
- Propose a hybrid model: evaluate if the cheap solution can be contracted with additional external support.
- Immediate practical action: Gather within 48–72h an RFC with:
- Review of the current RFP and proposal of new technical criteria and weightings.
- Estimation of TCO for both offers (price + operational cost + risk).
- Proposal of a mixed evaluation committee (Procurement + IT + Legal).
- Proposed weighted scoring (e.g., 40% price, 30% integration, 20% SLA, 10% support).
- Final recommendation based on scoring and TCO, not just price.
Quick recommendations
- Always separate position and interest: ask each party to summarize their interest in a clear sentence.
- Avoid decisions based only on price: include technical criteria and TCO in the RFP.
- Create a mixed evaluation committee: ensure IT participates in scoring.
- Define weighted scoring: balance price and technical risk.
- Calculate TCO: include operational costs and downtime risks.
If you want, I can turn this into a revised RFP draft or minutes with points to be signed by Procurement and IT before moving forward.