Solution

Table of Contents

Executive Summary. 2

1.0 Introduction. 6

1.1 ROSHN Organisation Background. 6

1.2 ROSHN Procurement and Supply. 6

1.3 Spend Category Identified. 6

2.0 Commercial Negotiation. 7

2.1 Bailey et al Negotiation Model 8

2.1.1 Preparation Phase. 10

2.1.2 Opening Stage. 22

2.1.3 Testing Phase. 23

2.1.4 Proposal Phase. 23

2.1.5 Bargain Phase. 24

2.1.6 Agreement Phase. 26

3.0 Post Negotiation Review.. 26

3.1 Conclusion. 27

3.2 Recommendations. 28

References. 29

List of Figures

Figure 1: Spending on IT Consultancy subcategories 6

Figure 2: Negotiation Process. 9

Figure 3: Mendelow’s Matrix. 11

Figure 4: Porter’s 5 Forces Analysis 14

Figure 5: Kraljic Matrix. 18

Figure 6: Thomas-Kilmann Conflict Model 25

Figure 7: Kolbe Cycle. 27

List of Tables

Table 1: Pestled Analysis. 17

Table 2: Team Members and their roles 19

Table 3: Negotiation Agenda. 21

1.0 Introduction

1.1 ROSHN Organisation Background

Owned by the Public Institute Fund (PIF), ROSHN Group is the real estate industry leader in Saudi Arabia. The organisation has reportedly been running for three years and provides new opportunities for residents of the Saudi Arabian (KSA) kingdom government (WebAdmin, 2024). With this, we are also making great strides toward realizing the economic and social development goals set out in Vision 2030.  It is now known that the organisation has signed contracts to support their active projects to the tune of about SAR37 billion and sold about 7,000 residential units. Over the whole Kingdom, the group intends to build 395 thousand dwelling units on 100 million square meters of land. In addition, according to Zawya Projects (2023), the ROSHN organisation brings in almost SAR312 billion for the Saudi economy and creates 388,000 jobs, both directly and indirectly. With an expected increase to almost 9% by 2030, this accounts for 5.1% of the Kingdom’s GDP and 12.8% of the non-oil GDP. One of their primary goals is to have 70% of Saudi nationals own their own home by the year 2030.

1.2 ROSHN Procurement and Supply

Recognised as a separate PS&M department, ROSHN is vital to the institution’s development. The division is responsible for overseeing the operations of more than 1,200 suppliers across several expenditure categories. The operations of ROSHN are supported by the Saudi Arabian government, which has invested up to SAR20 billion in the company (ROSHN, 2022a). Prioritising infrastructure sourcing through public-private partnerships has also been allocated SAR3.5 billion. The 25,000 square kilometers managed by ROSHN, which includes the Oasis valleys, the Sandstone Mountains, and traditional cultural heritage sites, are the primary focus of all their procurement procedures.

1.3 Spend Category Identified

The IT consultancy category of spend in ROSHN organisation is employed in this report. This is based on the fact that IT consultancy demand has been increasing since the COVID-19 epidemic and subsequent economic downturn. IT consultancy include IT strategy, IT Architecture, IT implementation, ERP services, Data analytics, IT security and software management. The different sub-categories budget allocation is illustrated in the following;

Figure 1: Spending on IT Consultancy Subcategories as a Whole

Approximately SAR102 Million is allocated by ROSHN for sourcing across the various IT consultancy subcategories per budget cycle, as illustrated in the above. According to Bourgeault et al. (2020), this has the effect of enhancing efficiency of the employees and hence increased productivity.  For example, in ROSHN, it helps reduce the risk of accidents and health hazards while also making the campus safer from the COVID-19 pandemic along with additional infections by working away from the organisation by leveraging on provided technologies.

2.0 Commercial Negotiation

Commercial negotiation in IT consultancy is the process of establishing terms and agreements between a consultancy provider and a client for IT services or projects. This involves setting the project’s scope, timeline, and deliverables, which is crucial in avoiding scope creep a common challenge in IT projects due to changing requirements. Other elements of price include terms of payment: fixed price as well as time and material or retainers depending on the project’s predictability and the client’s preferences (UpperEdge, 2023). They also comprise aspects of security, which is crucial in matters concerning data within IT services bearing in mind the modern world’s highly sensitive data. Employment Intellectual property (IP) rights are sometimes another issue, which covers who owns the rights to any created programs, codes or other proprietary work. Lastly, the conditions under which a project can be brought to a close as well as the exit strategy which allows either of the parties to terminate the project has to be well articulated (Liberman, 2023).

2.1 Bailey et al Negotiation Model

The stages and principles proposed in the Bailey et al. Negotiation Model focus on the appropriate stages and the principles of negotiation which will help apply them in the IT consultancy to improve the negotiations clarity of the process as well as the collaboration between the parties involved. Here’s how the Bailey et al. model’s stages as shown in Figure 3 below can be applied to IT consultancy:

1. Preparation Phase: This is a process which aims at defining need, clients and scope and potential problems. In IT consultancy, preparation for a consultancy assignment also involves gaining a real conception and appreciation of your client needs, their IT needs, the planned scope and objective of the project, and the statutory compliance concerns that relate to the project.
2. Opening Phase: From this stage, the emphasis is made to forming a proper relationship and ensuring the expectations are set straight from the get go. To do this in IT consulting, it is essential for the consultancy to explain to the client what the consultancy does to add value to the project. Effective and unemotional introductions create the condition for constructive conversation and, at the same time, can remove any possible worries (Generis, 2023).
3. Testing Phase: This includes the identification of each party’s needs, goals and limitation.. In IT consultancy, this stage often focuses on validating the feasibility of proposed solutions, examining the client’s budget, and discussing timelines. Here, consultants might use questions to clarify expectations on service levels and long-term scalability (UpperEdge, 2023).
4. Proposal and Bargaining Phase: At this point, IT consultants present solutions tailored to the client’s needs and negotiate terms, such as payment structures and intellectual property rights. Common bargaining points include the scope of work, customization levels, and contract length, with consultants striving to balance client requests and project viability.
5. Agreement: This final stage formalizes the terms of collaboration. IT consultancies benefit from including exit clauses, data protection measures, and periodic reviews to adapt the partnership to evolving needs (Generis, 2023). The final agreement should align both parties on expected outcomes, responsibilities, and key performance metrics.

Adapting the Bailey et al. model for IT consultancy allows consultants to systematically address project complexity, align stakeholder goals, and create a foundation for long-term partnerships.

Figure 2: Negotiation Process

2.1.1 Preparation Phase

Step 1: Internal and external Data

In the procurement of consultancy IT services at ROSHN, internal data analysis is essential to optimize resource allocation, manage costs, and ensure service quality across projects. This analysis is done through;

Please click herein to access this assessment in full