E-Mail SIMULATION EXERCISE: September 26, 2014, !4"-11!

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CONTRACT NE,OTIATIONS-REAC-IN, OUT TO T-E MI**LE EAST
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C(p)ri31t *r! Cer(me C(.ep1, @r(0e..(r, IIM, A1me6aba6, I%6ia!

REAC-IN, OUT TO T-E MI**LE EAST
8ASIC SCENARIO
A modern hospital in Ahmedi, Kuwait sponsored by the Kuwaiti Government set up in 2001 and run
by NRIs was headed by a medical professional whose dream was to mae the hospital the most
modern multispeciality hospital in relation to its competition in the re!ion" #here were si$ other
hospitals run by Americans%1&, Germans%1&, Kuwait 'il (ompany %2& and other Kuwaiti
or!ani)ations%2&" *everal initiatives were bein! taen by the mana!ement team + recruitment of top
!rade medical professionals from the best Indian medical institutions and hospitals, up!radation of
technolo!y, improvement of houseeepin!, ,uality initiative on all fronts" A ey in!redient in the
overall tonin! up was the decision to computeri)e the information flow in the or!ani)ation with a
view to inte!ratin! all the departments with the front office in order to improve the ,uality of patient
care systems"
#he (-' had a brainstormin! session with a #as .orce consistin! of the heads of departments in
order to !enerate a framewor for definin! the information re,uirements of the or!ani)ation and
also to be able to structure the computeri)ation pro/ect into various components" #he (-' had
heard about a software company which had been set up in India about which he had first heard
durin! a !et to!ether or!ani)ed by the Indian Ambassador to Kuwait" #he Ambassador had been
very helpful in providin! information related to this company" And a couple of fa$es and a series of
telene!otiations and 0mails later, a system study was commissioned and conducted by
*'.#1AR0 *'23#I'N* '. IN4IA based on which it was decided that the computeri)ation wor
could be split into si$ modules" 1hile **I had recommended that the entire pro/ect should be
commissioned ri!ht away in the interests of inte!ration, the (-' was a little hesitant" #his was
because the (-' was not sure about the 5oard6s view on computeri)ation at this sta!e of the
7ospital6s development" 7e was also aware about the 5oard6s concern re!ardin! employee
sensitivities to the computeri)ation issue and so the (omputeri)ation #as .orce felt that they could
tae the pro/ect in sta!es be!innin! with a 8pilot pro/ect8 by commissionin! -odule I only"
*ubse,uently, **I was also awarded the wor for the development of -odule I a!ainst close
competition from *INGA9'R0 *'.#0(7 GR'39 %**G& based in *in!apore for 3* : ;0000<+"
**G had already carried out similar pro/ects in the re!ion with the bacin! of a =apanese+
American /oint venture computer manufacturin! company based in #aiwan and, therefore was
better nown" #he #as .orce had considered both proposals carefully and had finally
recommended **I mainly because of cost and time considerations"
**I had been aware of the dominant presence of **G in the software maret in the -iddle 0ast as
they scanned the -iddle 0ast environment" And yet , they new they had it in them" All they
needed was a brea + and a foothold" **I had established itself well for software development
wor in certain se!ments in India in the services sector" #he Kuwaiti pro/ect was the first software
development contract outside India for **I and they were an$ious to do a !ood /ob"
'n the other hand **G is a very lar!e or!ani)ation with an established reputation" **G had earlier
lost the contract to **I on the system study and -odule I development on the basis of price, **G
havin! hi!h overhead costs" 7owever, **G has now indicated a desire to !et the rest of the pro/ect
%-odules II + >I& as well as the inte!ration /ob from the 7ospital at any cost if not for any other
reason but to eep **I away + whom they perceive as a ma/or upcomin! threat"
**I6s proposal for the complete pro/ect development %module I+>I and inte!ration&, offshore in India
includin! implementation in Kuwait was for 3*: ?@0,000<+ plus travel and stay for their (onsultants
on actuals in Kuwait" #hey had ept their offer very competitive so as to eep the 7ospital from
looin! at any other competitor and also because they very much wanted to establish their
reputation in their first pro/ect assi!nment in an overseas maret"
After the initial !o ahead from the (-', the pro/ect details were ne!otiated with the *ystems
-ana!er who happened to be an 0!yptian national to whom the (-' had dele!ated the authority
to ne!otiate the modalities of the deal" 'nce the deal was struc, there was certainly a sense of
achievement and a heady feelin! of e$citement in **I mainly on account of the prospect of !ainin!
entry into a potential overseas maret" #here was also disappointment amon! **I team members
because the !reen si!nal was only for the development of -odule I and not for the whole pro/ect"
In spite of sustained efforts by **I ne!otiators to !et the full contract released to them, the hospital
was not able to do so since the top mana!ement could not convince their board to !o ahead on full
implementation" #hey were also aware that the 5oard was hesitant even about even -odule I
because they felt priority should be !iven to improve the or!ani)ational core in terms of medical
and sur!ical systems before embarin! on what the 5oard felt was a peripheral issue lie
computeri)ation" #he 5oard was also sensitive to employee worries about possible worforce
cutbacs, an issue on which were even prepared to call off the pro/ect even if this meant a loss of
the 3* : ;0,000<+ plus 7ardware rental, travel and local hospitality costs incurred separately by the
7ospital on -odule I" In a nei!hbourin! hospital, computeri)ation had led to heartburn which
ultimately led to a substantial increase in the share of wa!es in the cost of operations leadin! to
increased cost of hospital services and decline in service utili)ation rates in spite of bein!
e,uipped with state+of+art medical technolo!y"
**I went into the -odule I /ob with a na!!in! feelin! that their competence would be under
constant 8review8 even as they went about their wor on the first module leadin! to unnecessary
pressure on their performance" #he only !limmer of hope they had of clinchin! the whole deal was
based on the understandin! the **I ne!otiator had reached with the *ystems -ana!er of the
7ospital on the **I su!!estion that they tae a top down approach to the whole pro/ect, that is,
wor on inte!ration and interconnection of the si$ modules should precede the development of
individual modules" #his su!!estion had been a!reed to in principle in a letter written by the
*ystems -ana!er in one of his fa$es sent to the **I ne!otiator"
As soon as the **I team had completed ABC of -odule 1 after carryin! out the initial inte!ration
framewor, the **I (hief Ne!otiator sent a fa$ to the *ystems -ana!er of the 7ospital informin!
him about the pro!ress of the pro/ect on both counts" 7e also su!!ested that they could now
consider release of the full balance amount for the 4evelopment of the remainin! -odules of 3* :
2AB,000 as per their earlier *ystems *tudy" #he 7ospital could also consider releasin! the
inte!ration instalment of 3* : AB,000 before they start wor on -odule II since they had already
incurred heavy e$penditure over and above the 3* : ;0,000 already paid" #he **I (hief
Ne!otiator su!!ested that they should hold a meetin! to commence ne!otiations"
#here was no reply from the (-' for a wee" #he **I (hief Ne!otiator sent a call to the (-'
only to be told by reception that the *ystems -ana!er had /ust left the company and /oined the
Kuwait 'il (ompany6s 4ata 9rocessin! (ell as (hief *ystems -ana!er" #he (-' was not
available" 7e was visitin! the 7arvard -edical *chool on a 7ead 7untin! -ission and also to
ne!otiate several strate!ic alliances with leadin! -edical *chools in the 3*A and 3K" 7e would be
bac in three days time" #he **I fa$ messa!e had been relayed to the (-' and he will be
respondin! when he returns" No one had been appointed in the *ystem -ana!er6s place as yet"
#he news spread ,uicly within **I and everyone seemed to have been affected by the mood of
uncertainty on the whole pro/ect"
-eanwhile, the (-' had been informed both about the departure of the 0!yptian *ystems
-ana!er as well as about the messa!e from **I" 7e decided to loo around the 5oston area for a
possible replacement for the vacant position because he new he needed a competent computer
professional to at least deal with the pro/ect as well as to try and build a !ood systems team in the
hospital" It was while he was checin! around on this matter that he was introduced to 4r"7ashim,
an established and well nown computer professional and scholar, who had come on an
international assi!nment to 5oston from India" 7e was now a freelance consultant on various !lobe
trottin! missions" #he (-' set up a meetin! with 4r" 7ashim durin! which he spoe about his
pro/ect and he made an offer to 4r" 7ashim to ne!otiate the deal with **I and also to help in
seein! the deal throu!h" 4r" 7ashim was not only aware of **I but he also new and had hi!h
re!ard for the **G top brass for whom he had carried out a few pro/ects" After the meetin!, on
further en,uiries, the (-' soon reali)ed that the meetin! with 4r" 7ashim was a heaven sent
encounter because 4r"7ashim seemed to be a hi!hly respected professional with a reputation as a
tou!h ne!otiator in the Asian+American software circuit" 7e also heard from some friends in 5oston
that 4r" 7ashim was a contender for the 9residency of the Asian (omputer *ociety for which
elections were to be held in two month6s time" #wo days later, the (-' briefed 4r" 7ashim about
the assi!nment and made an appropriate offer which included a bonus on savin!s" 4r" 7ashim
readily a!reed to ne!otiate the deal with **I and help in seein! it throu!h"
**I received an 0+mail from the (-' that henceforth 4r" 7ashim would be handlin! the
computeri)ation deal for #he 7ospital" 4r" 7ashim had several rounds of discussions with the (-'
and other functionaries" After satisfyin! himself that he had a handle on the nuances of the
computeri)ation ne!otiations, he then sent an 0+mail to **I invitin! their representative for
ne!otiations at the earliest"
**I sent an 0+mail bac sayin! that 4r"*hehar would be their representative in this ne!otiation"
4r" 7ashim had several rounds of discussions with the (-' and other functionaries" After
satisfyin! himself that he had a handle on the nuances of the computeri)ation ne!otiations, he then
sent an 0+mail to **I invitin! their representative for ne!otiations"
T-E SSI 8RIE' 'OR *R! S-E9AR
1" #he breaup of the price ,uoted for the whole /ob is as follows D
-odule I""""""""""""": ;0000"00
-odule II"""""""""""": ;B000"00
-odule III""""""""""": B0000"00
-odule I>"""""""""": BB000"00
-odule >""""""""""": E0000"00
-odule >I"""""""""": EB000"00
Inte!ration""""""""": AB000"00
2" #he 4elivery deadline as a!reed was as follows D

-odule I"""""""""""""Au!+*ept 201;
-odule II""""""""""""'ct+Nov 201;
-odule III""""""F"4ec 201;+=an 201B
-odule I>""""""""""".eb+-ar 201B
-odule >""""""""""""Apr+-ay 201B
-odule >I"""""""""""=une+=uly 201B
Inte!ration"""""""""""Au!ust+*eptember 201B %althou!h inte!ration had already
commenced as per **I6s understandin! with the *ystems -ana!er&
?" **I has already spent 3* : B0000 for -odule I which is still under development
%and it is now the third wee of *eptember 201; D in **I6s view there is a liely time
overrun because of tardiness in information flow on the part of the 7ospital due to
the inefficiencies of the earlier manual systems& as well as about 3* :BB000
towards wor on inte!ration which had already commenced !iven **I6s view on the
issue% that inte!ration should evolve with the development of modules&"
;" **I is willin! to consider accelerated delivery if the full order is released"
B" 2e!ally speain!, **I has a stron! case because of the written assurance from the
*ystems -ana!er althou!h this is not in the a!reement document"
E" **I -ana!ement feels the whole issue has reached the current impasse because
of the desperate attempts by **G to scuttle the pro/ect"
A" **I has ,uoted prices which would ultimately !ive only a 1BC mar!in"
G" #he **I (0' is e$tremely an$ious about the whole issue and he is worried about
practically everythin! and he is in a mood to concede anythin! to retain the pro/ect"