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The end of Procurement


COVID-19 is prompting numerous changes in society, the economy and commercial relationships. Many are changes that would have occurred anyway, but the pandemic is generating a new sense of urgency. Examples range from the massive debates over racism and equality, to a rethink of economic management, the discussions over working from home and the need for increased collaboration in trading relationships.

Back in April, an article in the Financial Times highlighted one of the critical issues facing businesses. “Too late, many executives and owners have realised that by pursuing the holy grail of ever greater efficiency, they sacrificed robustness, resilience and effectiveness. In many cases, they will turn out to have sacrificed the business itself.” Already, in spite of government support programs, this is turning out to be true – for example, in June, business bankruptcies were up 43% on the previous year.

Much of the fragility in supply chains is a direct consequence of the procurement practices of the last 20 years. Investors, corporate boards and politicians are grasping the urgency of change, the need for a fundamental re-think of supply strategies and relationships. Clearly, Procurement as a function must lie at the heart of this review.

Digitization plays a big role in this new thinking. It is not only that it offers streamlining, but it demands a re-think of business processes to ensure the right data flows and the delivery of value. This is one of the changes that represents a fundamental change for Procurement. A digital process creates the need for an integrated life-cycle view, from definition of requirements through to contract close-out or renewal. With this comes a fundamental change in accountability and measurement, with a focus on value over time rather than cost at a moment in time.

A second major force is the urgency of building resilient supply chains. This demands more collaborative supply relationships and increased transparency. Achieving these depends on increased levels of trust – and therefore a focus on the quality of the overall relationship, rather than on individual transactions.

‘Procurement’ remains an activity within this longer-term thinking, but must support the altered priorities. The roles of the future will focus on market management, economic assessment, funding and relationship quality. In fact, some procurement professionals have been steadily shifting into these more holistic roles – but this trickle is now set to become a flood as the old ways are abandoned.

For many, ‘Procurement’ has long been a tainted brand and they will not be sorry to see its demise. There have been many debates about potential name changes and re-positioning. Now, the nature of the change is much more fundamental than just a change of name. Among the big questions are how fast today’s practitioners will awaken to the need for reskilling and whether they will make the transition in time.

Supplier loyalty: now there’s a concept


Businesses are naturally worried about the resilience of their supply chains. COVID-19 was full of surprises, not only regarding the frailty of many suppliers, but also discovering just how extended their supply chains have become and how little transparency exists.

Early in the pandemic, businesses sought alternative sources of supply and started work reviewing their sourcing strategies. This led to a range of options being considered, including bringing activities back in-house, shifting supply to on-shore or near-shore alternatives, increasing stock levels and multi-sourcing. Many also started to reevaluate the economics of recent procurement wisdom – in particular, if supply chains have now become so extended, does that not mean they are innately inefficient and costly? Has the mantra of low-cost sourcing actually led to the opposite effect in terms of final cost?

Low cost sourcing has been pernicious in its effect, in particular in its destruction of investment and loyalty. Given the constant threat of re-bidding, suppliers have been forced to focus on short term cost reductions as the primary source of customer value. This sense of ‘disposable relationships’ has permeated many areas of global trade.

How did we get risk so wrong?

This week, the Sourcing Industry Group is promoting a webinar posing the question ‘How did we get risk so wrong?’ It acknowledged that the “COVID-19 crisis just exposed how weak the collective Supply Chain and Procurement industry was at doing risk planning. For years, cost savings has been the primary strategic objective at the expense of risk, innovation, and corporate social responsibility. The crisis isn’t even over and this lesson has become abundantly clear. Therefore the value equation has to fundamentally shift. But, how far do we go? How do we prevent over-indexing the other way? What other factors do we need to consider?”

The thing that amazes me is that organizations that represent the sourcing profession can still be asking this question. Why did so many get it wrong? Maybe not listening to the market. Paying too much attention to consultants and analysts. Believing that success comes from following the CFOs orders, without regard to the wider stakeholder community. Grasping at straws like ‘we are going to be at the top table’. Procurement had a strong run for 20 years, driven by the opportunities created by globalization and automation. Its actions had massive impact on our world, good and bad. Change is now long overdue.

How do we fix it?

One part of the answer lies in the comments above – by listening more, by acting as team members truly focused on output and outcome value, rather than input cost, by supplementing or replacing its inwardly focused transactional technology with tools and systems that facilitate ‘relationship resource planning’, operating across enterprise boundaries.

New technologies must be deployed to provide heightened levels of transparency and increased flows of data between organizations and throughout supply networks. The European Commission is already looking at how to do this on an EU-wide basis, so surely we can get to grips with implementing new approaches at an enterprise level. New platforms offer far more efficient and dynamic ways to monitor markets than the traditional approach of regular re-bidding. And with those new methods comes the opportunity to build increased loyalty between buyers and suppliers, for both to establish the levels of trust and collaboration that are fundamental to stability and growth.

 

Recruitment & Jobs: Where Next?


“The success of remote working has opened up previously unavailable talent pools, with 64% of hiring managers now more willing to consider remote workers.”

This finding, from a survey conducted by Cielo, represents both good and bad news for job candidates. Good, because it suggests greater opportunities to find work outside traditional limits of geography or personal circumstances. Bad, because it also indicates greater competition for whatever jobs are available. And in the post-COVID era, as business struggles to recover, the level of unemployment is set to rise and the volume of opening to fall.

The Market for CCM

Right now, the situation for the Commercial and Contract Management community appears mixed – but there are definitely opportunities. Those at the top of their game, who can demonstrate a creative, can-do attitude and approach, are definitely in demand. Business and government need highly talented experts who offer inspiration and innovation, who move fast and get things done. For those whose record is rather more mundane, perhaps focused on control and compliance, or on performing important but repetitive activities, the situation may be rather more bleak. So if you are serious about making yourself ready for a tough and demanding market, what should you do?

The next program in the IACCM TASK series, starting on July 13th, is on Job Opportunities and Online Interviewing. It features a range of experts and invaluable hints and tips to help candidates prepare. In anticipation, here are some thoughts.

Build Your Network

Finding a job has always been helped by who you know – and in a virtual world, that is likely to be even more true. If an employer cannot physically meet with you (or you with them), recommendations and information from people you or they respect will offer a tremendous advantage. Today, as indicated by the opening quote in this article, the virtual world has expanded the size and diversity of the network you can build. Many people are surprisingly willing to help, especially if they have had a chance to connect beyond a purely superficial level. While social media should certainly be an element of your outreach, professional bodies and associations are likely to be even more helpful in offering opportunities to participate in working groups, roundtable discussions, message boards with the sort of people who could be fundamental to your career. Make sure to take advantage of IACCM’s networking opportunities from July 27- August 27, as part of our next TASK topic “Keeping Your Network Alive”.

What do you know?

Recent articles in Chief Learning Office magazine have highlighted the surge in individuals building their qualifications and their resume, especially through short courses which offer certificates. It goes without saying that employers typically expect a professional qualification relevant to your discipline (and many in Commercial and Contract Management still don’t have that). The supplementary options are then numerous – and you need to be able to answer the question: “What did you do during lockdown?” Throughout that period, thousands of IACCM members have been undertaking programs such as Managing Contracts Virtually, as well as many embarking on CCM or SRM certification, at either Practitioner or Advanced level. The numbers undertaking CPD (Continuing Professional Development) have also rocketed.

Others may be focusing on adjacent areas or complementary skills – for example, in digital technology, or project management or analytics, or leadership. The key point is that now is the time for any serious candidate to polish their credentials and demonstrate that they are committed to their career and serious about self-improvement.

What Sets You Apart?  

Last week, I spoke with a friend who had just completed an interview on Zoom. It was a group interview – and included team breakout sessions where the interviewers were observing the effectiveness of the candidates in a virtual setting.

The need to demonstrate ‘Why me?’ is not new, but it is now different. Serious candidates will be busy using their network and social media to do their homework – for example, discovering as much as they can about their interviewers, about organizational culture, about the state of the employer’s market and key commercial challenges. This information will guide how they dress, the nature of the questions they plan, the background setting they create in their home or office. More than anything, they will have practised their video techniques and persona. Virtual interviews offer a massive opportunity when compared to the face-to-face version – you can perfect your technique by recording and watching yourself in advance. Have a friend ask you questions. Teach yourself about eye contact, variations in tone, elimination of the ‘disfluencies’ (you know, ‘like, well, um ….’) that diminish our credibility and distract from our message (see HBR, August 2018 ‘How to stop saying “Um”, “Ah” and “You Know”).  Better yet, benefit from “communication coaching” offered by IACCM.

So if you are serious about furthering your career, a great place to start is to check in on all the resources offered within TASK!

 

Working from home – will we ever go back?


No one wants to go back! Well, that is a slight exaggeration. A recent IACCM poll reveals that 1% of respondents hope for a future where they work exclusively from an office and 12% would prefer ‘mainly office’. But that compares with 63% who want to work mainly or entirely from home and 24% who would like a 50/50 balance …..

So what changed?

When the pandemic first struck, the chat on social media was overwhelmingly a tale of woe. People missed the office. They missed the informal conversations with colleagues. They struggled with intrusions by pets and children. They battled over finding a quiet space.

Steadily, the complaints diminished. A ‘new normal’ emerged, proving the point that it just takes time to adjust. But did the silence reflect a grudging acceptance, a belief that this was just a temporary situation and it would soon be over. Or was it indicative of a much deeper change – perhaps even an enthusiasm for this change to ‘working from home’?

What the data tells us

IACCM surveyed its members throughout the pandemic. Our first surveys in March revealed the speed with which a majority of the worldwide contracts and commercial community shifted from office to home. They also showed the speed with which most organizations moved in equipping their staff to be productive – at least in terms of technology. But that did not mean they were actually ‘enjoying’ themselves. While some were already accustomed to some level of home working, many were not and overwhelmingly they looked forward to the re-opening of offices and restoration of routine and – in particular – interaction with colleagues.

It was clear in those early days that people were indeed struggling to develop a new routine. Many needed to establish a household rhythm which included adjusting traditional working hours and perhaps re-purposing sections of their home. But released from their daily commute and the distractions of the office, they actually discovered higher levels of productivity.

But are we having fun?

Working from home has not pleased everyone. For some, it was doubtless a lonely and isolated experience. For others, it may have created domestic tensions from which they wish they could escape. But in fact, just 12% say that working from home has had a ‘somewhat negative’ impact on their enjoyment of their job (and none say that it was ‘very negative’). This contrasts with 78% who report that the impact has been ‘somewhat’ or ‘very positive’.

So do we want to go back to the office? For a majority, the answer is clearly no, at least not full-time. At this point, just 40% have been asked their future preference by their employer, bit it is clear that many offices will not re-open, at least in their previous form. And for those who are forced to return? Well, I guess the good news is that the pandemic has shown how quickly we adapt.

The IACCM ‘working from home’ survey was undertaken in June 2020 as part of the TASK learning and support program 

Will Force Majeure be #1?


It is time for IACCM’s extensively cited survey, the Most Negotiated Terms – the only worldwide study that tells us what business negotiators actually spend their time negotiating!

Those familiar with this annual study, now in its 20th year, will know that the pace of change has been relatively slow and only occasionally dramatic. The year of its launch, 2001, was one such dramatic year, when the events of 9/11 caused Force Majeure provisions to surge to prominence.

Certainly, over the years, there have been shifts in the table of top terms and also new entrants, often due to regulation or as a result of some major event. But the top spot has almost always been claimed by our old friend, Limitation of Liability. There has been occasional excitement when its close rival, Indemnities, has narrowed the gap …..

Will this year be different?

COVID-19 has had a massive impact on so many aspects of our lives – and contracts are no exception. There is extensive discussion over what terms will change, which provisions become more important, whether the tone and tenor of negotiations themselves will alter, perhaps becoming more collaborative. Scanning the legal press it would be easy to conclude that Force Majeure may once again be a candidate for top spot – but is that really the case?

Force Majeure clauses certainly made headlines when the pandemic started to hit in earnest. There were dozens of articles and webinars discussing its applicability and what constituted a well-written provision. Many law firms appear to remain focused on those questions, yet for business people, it may be rather less relevant. Force Majeure is in many ways symbolic of the more adversarial school of contracts and negotiations. For business executives, the issues are much more about how customers and suppliers work together to minimize risk and disruption.

So where will Force Majeure feature this year? What other terms may have risen up the list and to what extent are attitudes to negotiation itself undergoing material change? How do the answers vary across industries, or geographies? The IACCM Most Negotiated Terms survey will provide answers to these questions and more.

This year, we are especially excited to be partnering with leading contract management software provider, Icertis. The insights provided by their Artificial Intelligence tool will enable us to not only understand the relative positioning of the negotiated terms, but also a sense of what elements of a term are receiving the greatest focus. Equipped with this information, negotiators will be in a much better position to set their own priorities for contract review and negotiation planning and training.

Initial results will be issued to participants by the end of July. If you want to be among the first to know, visit TopNegotiatedTerms to complete the survey!

Communication and Collaboration: Some Key Lessons Learned


The speed and intensity of COVID-19 rapidly exposed weaknesses in communication and the consequences of poor collaboration.

Suddenly, traditional ways of working were thrown into turmoil as travel and physical meetings ground to a halt. Information flows were not only disrupted, but organizations quickly discovered how little information they actually had. Trying to predict supply shortages, or demand impact, or the availability of transport were among the many blind spots that emerged. With vast numbers working from home, not only was it difficult to access information, it was also challenging to find out who might have critical knowledge or insight.

Collaboration – where it existed – rapidly proved its value, whereas relationships that were already strained tended to deteriorate further. There was a major contrast between those customers and suppliers who reached out to their trading partners in a spirit of cooperation, versus those who simply flooded the market with notices of Force Majeure.

So what have we learnt?

In times of uncertainty, communication is everything. It needs to be rapid, timely and empathetic. Even if key information is lacking, it is important to advise others of that fact and to indicate what is being done to address it. Traditional communication channels and methods may need to change. For example, the regular meeting by the account manager at the customer’s site won’t happen, so maybe there needs to be almost daily contact from the contract manager to provide updates or alerts, or to work on resolving issues. As part of good relationship management, organizations are establishing ‘communication protocols’, which may even be a formal contract supplement. Customers and suppliers need to improve definition of the way they communicate and also with whom to communicate.

In times of stress, it is easy to lose sight of others and the need for collaboration. Yet it is essential, not only in the context of sustaining existing relationships, but also in forming the new relationships that may be critical to avoiding or solving problems. Some great examples of collaboration have emerged – for example, in working through supply shortages, reductions or diversions in an effort to minimize their impact; or in better understanding counter-party cash flow or funding impacts and working together to overcome them. It was also through collaboration that innovation started to occur – for example, customers and suppliers working together to design methods for ‘virtual acceptance procedures’ for new plant and equipment.

Examples of collaboration extended beyond traditional trading partners. Corporations started to exchange knowledge and information both across and within industries. Practical issues, such as understanding the different definitions of essential workers or of social distancing regulations in different states or jurisdictions; exchanging experiences in dealing with different government agencies or programs; sharing ideas for a crisis management playbook. But collaboration went further than this and even competition authorities relaxed many of their rules to enable information flows and practical cooperation between erstwhile competitors. Examples included sharing facilities and even in some cases temporarily stocking replacement parts or components to support a shared customer.

And as we emerge ….

A new normal or a return to the past? Certainly, the pandemic has provided learning and discoveries which will continue to be applied. Methods of communication will not revert to the old model. Working from home will continue at higher levels than in the past. The quality and integrity of communication methods and models will continue to receive focus as we increase dependence on technology. The technology itself will also undergo major improvements to meet those needs, drawing from the experiences and challenges created by the pandemic.

Among those changes in technology will be an increased focus on the integrity and quality of data flows (so critical in contract management) and also to further support collaborative working. But will the existence of better tools actually result in a behavioral shift towards true collaboration? The tendency to think only of our own interests, to use power to assert our own point of view, is so well established in business practices (and measurements) that it will be hard to break free. Will contracts actually become more balanced? Will risk actually be more fairly allocated? Will value and outcomes actually become the determinants of success? The pandemic has clearly illustrated that we can work this way, that it is a much more satisfying way to work and that it brings positive results. But will it survive? Only time – and our own determination – can provide the answer.

The IACCM TASK program on Communication and Collaboration starts on June 29th and can be accessed at https://www.iaccm.com/task/

 

 

CFO Priorities: A Commercial & Contracting ‘Call To Action’


As business starts its long road to recovery, Commercial and Contracts teams should expect a busy time. CFOs have a list of post-COVID priorities[1] which will place heavy demands on those teams – and it is no wonder we are already seeing examples of new hiring for talented commercial and contracts practitioners.

Revenue is the focus

Re-building revenue streams tops the list of CFO priorities. This is not surprising, since more than 80% expect severe degradation of revenue and profits this year. Far from being a cost-cutting agenda, the list represents a focus on customers and growth. Hence the greatest pressure is likely to fall on those in sales contracting and commercial roles, although focus on resilience and efficiency in supplier relationships and supplier-led innovation will certainly feature.

The PwC Post-COVID-19 Pulse Survey report indicates varying priorities across industries: “Technology, media and telecommunications CFOs (75%) are more likely than average to favour changes in products and services. Changes in pricing strategies are more likely to be cited by CFOs in energy, utilities and resources, who are also more likely to consider changes in geographic markets (37%). Health industry CFOs are more likely than average to consider changes to customer segments (48%)”.

Armed with this list, every commercial leader should engage with their CFO to discuss priorities and develop an action and resourcing plan in support of the growth and recovery agenda. Success matters not only to individual businesses, but to the world at large.

The CFO priorities for recovery

  1. Products or services (e.g., offer new, enhanced, repurposed or pared-down solutions) – 63%
  2. Pricing strategies (e.g., increase/decrease price, offer different payment terms) – 48%
  3. Distribution channels (e.g., change from in-person to virtual sales or delivery) – 36%
  4. Segments (e.g., sell direct-to-consumer, target new industries, move from B2C to B2B) – 34%
  5. Supply chain strategies (e.g., alternate sourcing options, change contract terms) – 30%
  6. Geographic markets (e.g., enter new markets, leave current markets) – 27%
  7. Talent (e.g., acquiring new talent, upskilling) – 27%
  8. Mergers, acquisitions, joint ventures or alliances – 25%

How IACCM is helping

The most obvious source of support from IACCM is in training and equipping commercial teams to respond rapidly and effectively. Already, more than 3,000 people have enrolled in the ‘Managing Contracts Virtually’ program that was released in May. Since March, more than 10,000 have joined our series of webinars dealing with high-focus issues such as renegotiation, collaboration and the shift in how risks are now allocated and managed. The IACCM Facilitated Certification programs in both Contract & Commercial Management and Supplier Relationship Management have allowed participants to engage with instructors and their fellow professionals in better understanding the impact and consequences of COVID-19 on their jobs and business contribution. Just this month, the launch of TASK (Tools, Analytics, Skills and Knowledge) provides an intensive upskilling agenda for both individuals and organizations and the podcasts in the Optimism Café series are inspiring with their stories of success.

Executive virtual roundtables bring together commercial leaders from within specific industries to share problems and ideas. IACCM facilitates discussion and leads resulting initiatives, such as developing new commercial models and terms and conditions. The IACCM Research Agenda continues to explore important topics such as achieving supply chain transparency, managing uncertainty through improved post-award management, evaluating post-COVID changes in negotiated terms, virtual negotiations and shifts in sourcing strategy. This is in addition to custom research for specific member companies and also contract design and simplification projects, to streamline contracting processes and increase user satisfaction.

The IACCM Skills Analysis & Benchmarking tool is in heavy demand as individuals and organizations seek rapid insight to the priorities for upskilling and the Capability Maturity Assessment is similarly providing corporate members with the insights needed to support rapid and targeted process improvement.

There is also an upsurge in requests for advice and in levels of use of the IACCM Software Selection Tool as organizations accelerate their plans to supplement or implement contract management technology.

And finally, bringing everything together, we will have the exciting IACCM VIBE Summit which for the first time unites the global Contract and Commercial community into a single event, delivered on a sophisticated, interactive platform that truly represents the diversity and inclusiveness of our times – and of the IACCM ethos.

It is a busy and demanding time for us all – but so rewarding to know that the work of the Contract and Commercial Management community is at the forefront in enabling business recovery.

[1] Source: PwC, COVID-19 CFO Pulse, 1-11 June 2020

Social Value Contracts: Do We Care?


COVID-19 has been the catalyst for many changes, not least the topics that have been appearing in the daily headlines. Global warming and the environment have rather taken a back seat in recent weeks, but diversity and inclusiveness have very much come to the fore.

However, will this focus continue and result in meaningful action, or will it just dwindle away, perhaps submerged by the urgent need to restore our economies? Will business start to operate in a spirit of increased collaboration and empathy, or will it revert to survival of the fittest?

The elements of change

While a shift in social attitudes is certainly a massive element in achieving change, it is business and government that can have the greatest and most immediate practical effect. Policies and practices that deliver social value are essential if we are to achieve greater fairness of opportunity and wealth distribution. New thinking about commercial models, supply relationships and contract structure and terms are fundamental to achieving success.

For almost six months, IACCM members have been participating in an international working group gathering and sharing success stories from around the world. These range from shifts in policy and legislation to practical examples of social value delivery. It is our belief that by promoting examples of success we can nurture and spread ideas and action much more broadly.

Join our movement – make change happen!

We need to grow this working group of dedicated and enthusiastic individuals. We need people who will continue to gather and contribute content and we need others who do no more than take an interest and spread the word. From small beginnings, the contracting and commercial community can make a real difference.

On July 7th, we are running two webinars, featuring examples of social value and sustainability in practice. If you are willing or interested to help, or would like to attend one of the webinars, please register here.

Forget balanced contracts. What about balanced me?


“It feels like there is no escape”.

This impassioned plea came from one of my regular contacts, struggling to balance the demands of managing global contracts with the duties of childcare, home schooling and a partner feeling irritated by lockdown. “He tries to help, but just makes all of us more stressed and annoyed”. Reminding her that at least she had no pets to manage failed to cheer her up (especially as her young daughter was harassing her for a dog to keep her company!).

While personal circumstances may be very different, most professionals have struggled with aspects of the virtual work environment. Even those who have continued with some office visits find themselves in isolation, depending on technology for most of their human contact and conversations.

Many organizations have issued guidelines about how employees should cope with their changed conditions, but these are inevitably generic. At a personal level, emotions range from those struggling with isolation and loneliness, to those feeling overwhelmed by the multiple conflicting demands of working from home. A few comments that I have heard:

“I can’t stand another video call.”

“It feels like the screen is taking over my life.”

“I’m on call 24/7 – there’s just no divide any more.”

“How can I do a serious negotiation with a toddler sitting on my lap?”

“Working from home just isn’t good for my mental health.”

What should we do?

As work patterns change, we need help adjusting and we also need to help others in our team to adjust. We must recognize that those adjustments are not the same for everyone, and that we should not feel guilty if we are having difficulty. There is no universal approach to ‘balance’, but there are some key principles and guidelines to consider, which can help us find our own personal point of equilibrium. Life is never stress-free, but stress levels can and must be managed. Providing that guidance is one of the key principles behind the introductory session in the IACCM TASK program – ‘Remote Work Environment and Balance’.

TASK (Tools, Analytics, Skills & Knowledge) is a thirteen part program that starts this week and covers a wide array of both personal and organizational learning and guidance about handling our new world and the emergence from COVID-19. Balance matters, whether it is personal balance, work/life balance or balance in how we form and manage our trading relationships. So while we understand how busy you are and how little you may want to engage on yet another virtual program, don’t miss the first in our series and the opportunity it brings to restore or improve your sense of balance.

Visit https://www.iaccm.com/task/ for more information and to register for this exciting and informative program.

Would you rather be a gearbox or a cog?


It often takes a crisis to better understand the value of things or people that were previously seen as minor or peripheral.

It has rather been that way with contracts and contract management – until now viewed by most people as necessary, but not central to the operations of the business. COVID-19 has demonstrated the folly of that view, showing the importance of:

a) having formal agreements and understandings in place; and

b) having people who are skilled in the analysis and re-negotiation of those agreements; and

c) treating ‘contracting’ and its data flows as an integrated business process.

Of course, it also highlighted for many the cost and consequence of failing to invest in the right technology to support the management of those contracts – but there is every sign that this will at last be remedied.

Contracting is the gearbox

Organizations live and die based on their ability to win and deliver contracts. In many ways, a business is an ecosystem of contracts. COVID-19 showed the consequences of fragmentation – unclear roles and responsibilities, broken data flows, the difficulty of finding and extracting information from within contracts, limited connectivity between supply management and customer management. The fact that ‘contracting’ spans so many different functional groups and systems means that it lacks integration and integrity.

The severity of these weaknesses instantly became evident as people started to work from home and traditional communication flows and ‘work-arounds’ were disrupted – and as the sheer volume of issues and demands for management information became overwhelming.

These experiences have elevated appreciation of the critical importance of the contracting process. They are also leading to greater thought about the suitability of today’s contracts as management instruments (their form, structure and content are all under review). Perhaps most important, there is a surge of appreciation for the need to have someone responsible for the overall quality and integrity of the contracting process – ensuring clear roles and responsibilities, defining data flows, developing the digital platform that sits across functional applications.

Stepping up

For too long, ‘contract management’ has been seen as simply another vertical in the ‘stack’ of business processes and hence (from a technology perspective) was viewed as an application in the ERP suite of programs. Now, it is dawning on executives that contract management technology and practitioners are actually ‘the meat in the sandwich’, crossing the multiple functional applications and providing the interface for data flows  or only with, but also between trading partners.

Hence, contracts and contract management represent the gearbox that allows smooth movement and alterations of speed. And with that realisation comes the opportunity for the practitioner to itself change gear and step up from being just another cog …… so are you ready?