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Review & Approval: It gets no easier

February 13, 2013

With all the focus these days on compliance, it is probably no great surprise that there is growing interest in review and approval processes. Certainly it is a topic about which an increasing number of IACCM members are asking.

With today’s automation, you would think that it’s become easier to route bids or contracts for review. And on one level, you would be right. But of course, effective review depends on effective analysis of who must be involved. Before that can happen, there needs to be a thorough understanding of the possible risks to be considered and questions to be answered.

Executives are often frustrated by the lack of ‘commercialism’ within their organizations. On one level, this is about creativity and new ideas; on another it is about general business awareness and the ability to think laterally. It is in this latter context especially that many review processes are lacking. They fail to consider the wider array of possible interests and issues – and in consequence do not ask the right questions.

At IACCM, we advocate an approach that is based on stakeholder analysis. It certainly helps if you have a list of possible stakeholders because there really are potentially many of them – internal and external. For example, many contracts staff tend to think only in terms of the ‘core’ reviewers from groups such as legal or finance. They may recognize others – sales, product management, operations. But often they will overlook the many groups that could have an interest in the contract or relationship they are forming – shareholders, regulators, other customers, competitors, suppliers, distributors etc.

Other groups or professions that have coordinating responsibilities face a similar challenge. Project Management is one of these and we found this useful summary of their thoughts on stakeholder identification in a blog on Prince2.com. Here is an extract that offers some useful examples of the questions needed to support review and approval.

What are the top tips for identifying stakeholders?

Questions can help direct and prompt ideas in the brainstorming process. Here are a few: who is affected positively or negatively by the project; who gains and who loses from it; who wants it to succeed and who wants it to fail; who has the power to make the project succeed or fail; who makes the money decisions; who are the positive and negative opinion leaders; who exercises influence over other stakeholders; who could solve particular problems; who controls or provides or procures resources or facilities; who has the special skills needed by the project?

How should you classify your collection?

You can categorize stakeholders in different groups, such as users and beneficiaries or governance and regulators. A stakeholder map can be an invaluable way to record who they are and their interest in the project. It’s also worth working out which are the key and which the minor stakeholders remembering that, as always, things can change – and that they usually will!

The reason that automation has not completely answered the need for review and approval is that an effective process demands active thought and intelligence. While rules and principles can be automated and routing can certainly be made far more efficient, there is also a need for analysis to ensure the specific opportunity has resulted in proper consideration of the potential commercial implications. It is a talent that any proficient contracts or commercial professional must have.

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