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Beyond Contract Management

September 19, 2013

Most organizations are struggling to improve their contract and commercial processes at the speed they would like. There are many issues – for example, the timing of engagement, who to involve in review, authorities to negotiate and oversight of performance and change. Overall, those responsible for contracts fear that risks are ‘just waiting to happen’.

Yet despite those fears, for most of us, change and improvement are at best incremental. Until something goes badly wrong, it is hard to gain executive attention and even harder to generate the investment needed to make substantive progress.

However, this is not the case everywhere. A few organizations are achieving a new vision for their contracts and commercial process and teams. This is being achieved because they look beyond today’s process, rather than at it. They have grasped  the need to illustrate and describe the purpose of contracting excellence and the many benefits that improvements can deliver. This requires selling the vision to executive management in terms that appeal to them.

These conversations do not focus on how to better control or mitigate risks (not a subject that gains lasting attention from most C-level executives). Instead, it concentrates on achieving business value through improved bottom-line performance. A small but growing number of contracts and commercial groups are projecting beyond mere process improvement and calculating the scale of financial benefit that can be achieved. Examples are through accelerated decision-making, avoidance of repetitive errors, improved recovery from claims or change management, enhanced performance oversight and improved definition of scope or service levels. Together, initiatives such as these can generate many millions of dollars in savings or revenue improvements. Right now, there are IACCM member companies where investment in contract and commercial management is quite simply not an issue – because these groups are delivering measurable bottom-line contributions of several hundred million dollars a year.

Could you be one of those? Without doubt, the answer is yes. But the only route to success is to think ‘beyond contract management’ and to grasp the scale of added-value that could be achieved in your business. A number of those at the leading edge will be recognized at this year’s IACCM Innovation Awards. Others will be presenting their stories during plenary sessions at the IACCM Americas conference. Many more will be there to discover, learn and carry these ideas back to their business.

Since inception, IACCM’s mission has been to assist organizations in building better and more successful trading relationships. We do that by tackling not only the practical, day-to-day issues that our members face, but by providing strategic vision, a clear sense of how the future will look. The next step of the journey will be in Phoenix, Arizona, from October 8th – 10th, when our Innovation Award winners, our academic research partners and our change leaders will come together and share their wealth of insights and ideas that take us ‘beyond contract management’.

(If you cannot join us in Phoenix, we will be bringing the message and methods to Singapore in November, to Sydney and Mumbai in December, to Abu Dhabi in February and to locations in Europe early next year. See the IACCM Events calendar fro details and dates)

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