Contract: a term widely used but generally misunderstood
On the Public Spend Forum, Jonathan Messinger produced a wordcloud to identify ‘the seven most over-used words in Procurement’.
I was interested to see that ‘contract’ came top of the list. Now Jonathan, to his credit, dismissed that as an over-used term because, he said, it is ‘what we are all about’.
Spot on, Jonathan, but interesting that while the word may be so much used, it is in my experience so little understood. I would be fascinated to see how a majority in Procurement would define the word or, more important, explain the purpose of a contract. I bet most see it simply as a legally-driven document generated by the procurement ‘process’ (another term that features high on the list).
If indeed ‘contract’ is core to what Procurement does, why are so few trained in contracting? Why is the management of those contracts still so rarely a valued discipline? Why do so few Procurement professionals appreciate the impact of terms and conditions on supplier motivation, behavior and the value that is achieved?