SOURCING EXCELLENCE
AI & TECHNOLOGY
Machine-to-machine negotiation raises a deceptively simple question: what should the agent optimize for?
Price, savings, speed and agreement are all incomplete answers.
BATNA, the best alternative to a negotiated agreement, becomes critical because an agent rewarded for closing can still close a bad deal.
Reaching agreement is not the same as making a good decision.
A $10.00 offer is not necessarily better than a $10.20 offer if capacity is constrained, qualification work is required or the award creates excessive concentration.
Supplier economics also change with volume, timing, capacity, service requirements and combinations of business. If agents can evaluate those dimensions dynamically, sourcing can move beyond automated haggling toward richer exchanges of economic information.
The agent needs to understand the alternative and the tradeoffs around it.