Are Your Contracts Ready For The Future?

Do you have a contracting strategy – not just in the context of specific transactions, but in terms of planning for future offerings, contract terms, required skills? Does your contract management process anticipate change, or react to it?

Recent IACCM research revealed that 92% of organizations cannot answer ‘yes’ to these questions. While they may have developed a robust process and skilled practitioners, contracting and commercial practices remain tactical, responding to market conditions rather than helping to shape them.

To change this situation – and to raise the status of contract and commercial management – IACCM realized that the contracts and legal community must develop a vision, a clear sense of the changes that will be impacting this key business capability over the next few years. Equipped with this information, the association’s members will be far better positioned to influence and contribute to business strategy. Therefore, IACCM has been undertaking a worldwide study to explore the forces that will impact contracting practices, terms and skills in the coming years and to forecast the impacts they will have upon us.

• In addition to in-depth interviews, IACCM has conducted discussion forums and surveys (to submit your input, please visit https://www.surveymonkey.com/s/futurecontracts).
• It is also planning a series of events to share and build on these results. The first opportunity is a discussion of the early findings on an Ask The Expert call to be held on September 1^st(see  https://www.iaccm.com/events/register/?id=1181  for details and to register).
• Then IACCM will be holding an Executive Forum, as part of its Global Forum for Contract & Commercial Management – see http://www.iaccm.com/globalforum for details.

Early Findings From the Research

IACCM members expect fundamental changes to the way contracts are formed and managed in the next few years. Driven by the speed of change, the volatility of economic conditions and the re-balancing of global trade, there will be substantial shifts of focus in supplier selection, negotiation and contract management:

• 80% expect more focus on innovation
• 65% expect more focus on agility and flexibility
• 60% expect more collaborative planning and negotiation – internal and external
• 52% expect an increase in performance-based contracting

Perhaps these thoughts are predictable – though how well prepared are you to meet the demands they represent? And what about some of the other expectations:

• more than 50% expect the need for more flexibility over jurisdiction
• almost 30% see contracts becoming less relevant and being replaced by improved relationship management techniques
• 26% believe that emerging markets will have major impact on traditional contracts and terms, challenging the domination of ‘common law’ in international business
• Over 80% believe the ability to manage change will be the critical role of the contracts professional

This is just a small sample of the fascinating findings from IACCM’s study ‘The Future of Contracting’. In addition to member surveys, it has also been interviewing a wide array of executives and thought-leaders – business managers, academics and consultants from around the world.

Over the coming months, IACCM will offer members many opportunities to engage and share insights to the future of contracting. This will include local meetings, research reports and the chance of custom webinars for individual organizations.

So if you want to be confident that you have a strategy, if you want to influence your business, if you want to get ahead of the wave of change – get in touch and get involved in this unique project.