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Contract Management & Simplification

May 7, 2012

Last week’ s edition of The Economist exhorts us to ‘simplify and repeat’ .  It suggests that the growth of complexity threatens to overwhelm many businesses and render them unable to fulfill market demands and their own customer commitments.

Anyone in the world of contracts and commercial management will be familiar with this challenge. We are frequently at the forefront of complexity, seeking to balance internal policies and practices with external needs and requirements. Indeed, so many of those issues come together when we are forming contracts or handling negotiations that we are oftten seen as a cause of this complexity. It almost seems like those mandates from Legal, or the rules imposed by regulators, or the pricing or charging principles established by Finance, are somehow seen as our fault.

And the truth is, in some respects, they are our fault. We have so many insights to the issues surrounding and causing complexity, yet rarely do enough to challenge them, update them, make them simpler. In fact, we often glory in the complexity because it has become confused with our sense of value. Sorting all the confusion and making sense of it has become our role.

That is wrong and it is very short-sighted. The Economist is right – survival depends on making complexity simple. So our goals should be to do precisely that. We must monitor the things that cause delay, the things that result in commitments not being met, the things that disappoint our customers and suppliers; we must then propose or lead work to achieve improvements. And because complexity will not go away, the task before us is not only extremely valuable, but also unending.

How much better to be seen as a person or a function that is making things better than to be seen as someone who is a representative of the complexity that everyone wishes would disappear.

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