MGMT4450-Diller-2020 3-ICE02-Secret Instructions-Role B Magic PDF

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Summary

In class exercise. Lesson on selling a new software....

Description

[Rahmani]

ICE-02 – Role B:

Magic Makers Consultant

Negotiation Detail Summary (The school's computer system is outdated / The school and I came to an agreement where I was willing to agree to the $50,000 risking net loss for the company. While at the same time, it would offer free advertising and marketing to the public. That brings the possibility of recovering any loss in the future. / The school could not afford anything more than $50,000 / I offered $67,000 with a financing option of monthly payments of $5,625 for 12 months.) The school did not want to lose partnership with our company so we came up with an agreement.

Confidential Information for the Magic Makers Consultant You are the head of the Magic Makers Consulting Group, a relatively new but highly respected computer consulting firm, comprised of former Disney Imagineers. Magic Makers was founded just a year ago, and all of your work to date has been for private sector clients. But you recently have decided to pursue state, county, and municipal agencies on the belief that there will be growing (highly lucrative) opportunities in this domain. As part of this initiative, you have been trying to negotiate a contract with Orange County's public school system, starting with the rural city of Bithlo. The schools have the exact same excellent hardware base as Greater Orlando has, but the pre-installed generic software does NOT meet their particular academic needs. Having researched the situation carefully, you are confident that your firm can develop all the new programs and special templates that will solve their problems. You'd like to get the contract to do this work, both for its own sake and to generate other public sector consulting in Orange County, but you presently are at a serious impasse over your proposed fee. Here's the background: Several years ago, the City of Bithlo installed a networked computer system intended to link all of Orange County's municipal departments, including the public schools. It was hoped that with one integrated system, important information could be shared efficiently and could be the basis for more effective municipal planning. Unfortunately, the system has proven almost impossible to implement. As it happens, most of the county's different departments and agencies have distinctive needs that require substantial customization and specialized software. The pre-installed generic programs really don't handle their needs very well. It has been hard, moreover, to administer the database jointly. County officials thus have reluctantly agreed to allow each department to adapt its programming to its

own needs and to manage its own information. There is some consolation in the fact that the common hardware and software platform is of high quality, but the reality is that the county's computer network will no longer be fully integrated. With this new authorization, the school superintendent is seeking a consultant who can make the school's computers do the class scheduling, registration, and record keeping that is so essential to good administration. The superintendent also wants to take full advantage of using the existing hardware as an educational resource. Rescuing the Bithlo schools would be a highly visible success that could well help your firm secure other government contracts – and help the county actually realize their original vision of a fully-integrated network! Three weeks ago, you were approached by an official from the Bithlo schools who described their problems and their needs. In turn, you presented some examples of successful solutions you have developed in similar situations. The school official apparently is speaking to some of your competitors as well, though it seems as if Bithlo thinks your firm is best qualified to do this work. The school seems impressed not only by your firm's programming skills but also the userfriendly manuals that you have developed and the staff training that you and your colleagues have designed.

Your conversations with the school official have been largely cordial and productive. That person is reasonably knowledgeable about computers and has been helpful in describing both the technical needs of the Bithlo schools and the bureaucratic constraints in which they operate. Together you have scoped out a plan that would accomplish the reprogramming, preparation of manuals, and user training over the next three or four months. A fundamental misunderstanding has arisen, however, that threatens the entire deal. Specifically, you submitted a bid of $85,000 to complete this work – a figure MUCH LOWER than your normal private sector rates but one that is justifiable in light of your firm's desire to get its foot into the public sector door. Anything less, however, would lose money and set a bad precedent for future municipal work in the County (since the figure would be publicly reported, by law). The Bithlo official's jaw dropped in genuine surprise when you stated that figure and claimed that in this era of government cut backs, the schools cannot afford anything like that. In fact, because this project was not specifically budgeted, the Bithlo schools will have to engage in some creative (though perfectly legal) accounting to cover costs. The official claims that the most that the schools can afford is $50,000 and that the hope is to get the job done for significantly less. You are frustrated that this misunderstanding arose so late in the negotiations. In part, you feel that people really should appreciate what professional time is worth – the $85,000 you quoted is really a good deal for the schools. In hindsight, perhaps you should have dealt with the financial issues earlier. You can't be sure whether the school's $50,000 offer really represents the most that they can pay. Maybe you can get them to sweeten the offer somewhat, though it doesn't seem likely that they would come all the way up to the $85,000 you need. (After all, Bithlo is the poorest region in the county!) This really doesn't seem to be a case for splitting the difference: $67,500 is MUCH less than you could possibly accept and may well be much more than they can pay. It may not be possible to overcome this impasse, but you have agreed to meet with the school official to make one last effort to see if you can save this deal.

If you can settle on specific terms, by all means do so. As you do not have detailed information, however, it is all right if you come to a contingent agreement – subject to confirming data or securing the approval of other parties. At a minimum, see if you can brainstorm a list of plausible ways of breaking the deadlock. Do not forget that you are trying to get the BEST POSSIBLE DEAL you can for your firm – one that your partners would endorse – so you should only consider options that will be workable for you. If you feel that the other side is being unreasonable in its demands or that a deal just isn't possible, you should break off negotiations and not waste further time....