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Learning about Contract Management

March 21, 2012

I am currently working with members of the IACCM team undertaking one of our regular reviews of the learning materials for the contracts and commercial community.

Our core material already consists of almost 50 separate modules. The recently published Operational Guide that accompanies this material is over 600 pages long. Yet with each review, I realize how much more we could be adding! The scope of knowledge and work required to be truly expert as a contract or commercial manager is remarkable. It goes far beyond a simple understanding of contract structures and terms and conditions; of how these may vary between industries and geographies. It requires understanding of the impacts that these terms and structures will have on business outcomes; an ability to assess and balance the financial and risk consequences of the contract or commercial approach.  Today, it also involves an appreciation of the different methods through which business will be conducted Рfor example, virtual negotiations, the use of technology such as e-auctions, the role of contract management software and its integration with relationship or project management tools and systems.

Today’s contracting expert must have not only a coherent grasp of laws and regulations, contract interpretation and drafting, but also of operational and procedural capabilities, of financial analysis and modeling, of psychology and relationship building, of relevant tools and systems, of logistics and supply, of change management and negotiation … the list is enormous. And ironically, until very recent times, almost no-one in this field received much formal training. With a few exceptions, know-how was picked up on the job, by people who came to the role with several years experience from another function and who then received ‘ad-hoc’ training on specific elements of the tasks to be performed.

Increasingly, there is understanding that good contract and commercial management demands more than this ad-hoc approach and that it needs a disciplined approach by trained professionals who use similar terminology, methods, techniques and ideas in pursuing their activities. Not only does that discipline benefit the individual, but it makes the process itself more efficient, effective and predictable.

But looking at the array of materials and comments on which we are working, I realize the scale of the task before us as we seek to continue the development and update of this enormous field of professional knowledge. Daunting, yes, but above all exciting as we discuss the many ways in which this community can and will develop in the years ahead.

One Comment
  1. Contract management works not only on a coherent grasp of laws and regulations, but also on operational and procedural capabilities.

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