Solution

(Solution) CIPS Saudi Syndicate Cohort 1 (Practitioner) PIN

Table of Contents

1.0 Introduction. 4

1.1 ROSHN Organisation Background. 4

1.2 Procurement at ROSHN. 5

1.3 Category of spend. 6

2.0 Main Body. 7

2.1 Definition of Negotiation. 7

2.2 Model of Negotiation: Bailey et al. Model 8

3.0: Preparation stage of Bailey et al Model 9

3.1 Step1 – Internal Data and Governance. 9

3.1.1 Mendelow’s Matrix Analysis. 9

3.2 Step 2- Market Analysis. 11

3.2.1 Pricing Strategy of the Supplier 11

3.2.2: Supply Market Analysis. 12

3.2.3 Porters 5 Forces. 13

3.2.4: PESTLED Analysis. 15

3.2.5 The Kraljic Matrix. 17

3.2.6: Supplier Preferencing. 18

3.2.7: SWOT Analysis. 19

3.2.8: Supplier Key Account Management (KAM) 20

3.3 Team Member’s Role in Negotiation. 21

4.0 Opening (Agenda) 22

4.1 Negotiation Type. 23

4.2 Negotiation Approach and Style. 23

4.3 Concessions and Tactics. 23

4.4 Location. 24

5.0 Testing. 24

6.0 Propose. 24

7.0 Bargain. 25

8.0 Agreement 26

9.0 Post-negotiation Review Stage. 27

10.0 Conclusion and Recommendations. 28

10.1 Conclusion. 28

10.2 Recommendations. 28

References. 30

Figure 1:Summary of ROSHN Annual Budget Allocation. 5

Figure 2: Bailey et al. model of negotiation. 8

Figure 3: Mendelow’s Matrix Analysis. 10

Figure 4: BATNA in Negotiations. 12

Figure 5: Supply Market analysis. 13

Figure 6:  Porter’s 5 Forces Model 14

Figure 7: The Kraljic Matrix. 17

Figure 8: Supplier Preferencing Model 19

Figure 9: SWOT Analysis for ROSHN.. 19

Figure 10: French and Raven’s Five Bases of power 21

Figure 11: Thomas Kilmann Conflict Mode Instrument 26

Figure 12: Kolb cycle in Post-negotiation Stage. 27

Table 1: ROSHN’s procurement operations. 6

Table 2: IT hardware and software in this category of spend. 7

Table 3: Supply Market analysis for ROSHN.. 13

Table 4: PESTLED Analysis for ROSHN.. 16

Table 5: Supplier KAM for ROSHN.. 21

Table 6: Draft agenda for the commercial negotiations between ROSHN and its supplier 23

1.0 Introduction

1.1 ROSHN Organisation Background

ROSHN, established in August 2020 by the Public Investment Fund (PIF), is a cornerstone of Saudi Arabia’s Vision 2030 initiative. The company is tasked with developing over 200 million square meters of integrated, sustainable communities across the Kingdom (ROSHN, n.d). These projects are strategically located in key urban areas such as Riyadh, Jeddah, Mecca, and Dhahran, ensuring accessibility and convenience for residents.

ROSHN’s operational focus spans residential, commercial, and mixed-use developments (see figure 1 below). The company has successfully delivered over 30,000 residential units across its projects, which are valued at approximately SAR 60 billion ($16 billion). This scale of investment reflects ROSHN’s significant impact on the real estate sector, positioning it as one of the top developers in the region.

Figure 1:Summary of ROSHN Annual Budget Allocation

Source: PIF (2023)

In terms of procurement, ROSHN’s strategy is driven by a commitment to efficiency and cost management. The procurement function is integral to the company’s operations, managing an annual procurement budget of approximately SAR 7 billion ($1.9 billion). This budget supports the acquisition of materials, services, and subcontracted work necessary for project execution.

1.2 Procurement at ROSHN

Central to ROSHN’s mission to develop integrated and sustainable communities across Saudi Arabia will be its procurement strategy. Complementing Vision 2030’s large scale residential, commercial and mixed-use developments, ROSHN requires a robust and efficient procurement function. ROSNH’s procurement operations are managed in order to deliver value for money and to support the company’s growth and development objectives, with an annual procurement budget of approximately SAR 7 billion ($1.9 billion). ROSNH’s procurement function focuses on strategic sourcing, collaboration with its suppliers and becoming more cost effective. This is brought about through deep market analyses, stiff supplier bidding processes and strong supplier relationship management. ROSNH’s projects are of large scale and complexity due to which its procurement team has a critical role to play in securing top quality materials and services while abiding by very tight delivery schedules and budget constraints (ROSHN, n.d). In addition to its commitment to sustainability and innovation, ROSHN also places value on its procurement practices, selecting suppliers based on ROSHN values and objectives and through exploration on long-term partnerships. ROSHN achieves seamless implementation of its projects by implementing cutting edge procurement strategies, which support the broader objectives of economic diversification and urban development within Saudi Arabia. As demonstrated in Table 1 below, ROSHN’s procurement operations are of large scale and strategic importance to the company as it strives to realize its development goals.

Table 1: ROSHN’s procurement operations

Source: (ROSHN, n.d)

1.3 Category of spend

ROSHN’s IT spend category is critical to its mission of building integrated and sustainable communities across Saudi Arabia. ROSNH sources IT hardware and software across different suppliers, and focuses on advanced technology solutions. These include computers, networking equipment, cloud services and enterprise software systems (see table 2). These technologies are critical to supporting its digital transformation, and to manage large scale urban development projects and maintaining operational efficiencies. For ROSHN’s projects, procurement of IT solutions is a complex and big task which needs to be planned carefully and strategically sourced. Sourcing strategies, such as dual and multiple sourcing, are one set of strategies adopted by the company’s procurement team to reduce the risks and ensure the availability of critical IT systems. This approach makes it possible for ROSHN to get its technology on desirable terms and pricing and to create a long-term partnership with trusted providers of technology (CIPS, 2020).

Besides supporting ROSHN’s internal operations, the strategic procurement of the IT systems enables ROSHN to be equipped with strategic solutions to deliver to its communities. Technology, which makes up a large proportion of the SAR 7 billion ($1.9 billion) annual procurement allocation, is a critical enabler to deliver on ROSHN’s goals. There are also limited local IT manufacturers in Saudi Arabia so ROSHN depends on international suppliers and distributors. Due to this reliance, IT projects increasingly require agile negotiations to obtain favourable contract terms, reduce supply chain risks, and guarantee the timely delivery of IT systems. ROSHN utilises robust negotiation strategies to acquire the greatest value in order to reliably uphold its pledge to sustainability, cost efficiency, and operation excellence.

Table 2: IT hardware and software in this category of spend

2.0 Main Body

2.1 Definition of Negotiation

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