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Tackling waste through improved contract management

March 26, 2014

Businesses lose millions of dollars every year because of poor contract management. Few take steps to address the problem because they do not realize it exists. Since contracting is not handled as an integrated process, there are few measurements of its performance and (apart from the work undertaken by IACCM and a several of its members) there is no publicly available consolidated data showing the scale or cause of loss.

In the public sector, the situation is different. Government expenditure is subject to relentless audit and reporting. Few will have missed the fact that those audits frequently point at weaknesses in contact management and commercial skills as primary causes of waste and poor performance.

Stung by those criticisms – and the resultant media headlines – the UK Government has been among the first to act. A series of measures have now led to the creation of the Crown Commercial Service – probably the only such body in the world. It is charged with direct responsibility for overseeing central Government procurement through a mix of centralized purchasing and coordinated policy and practices.

The choice of name is significant. This new body is not simply a consolidated Procurement function, charged with driving down acquisition costs through consolidated spend. The UK Government has recognized that delivering successful projects, achieving value for money and establishing innovative contracting models depends upon commercial excellence. Therefore they are determined to hire top talent in contracting and commercial management.

Job postings in ten categories have been announced in the last few days and can be viewed on the IACCM website. These represent exciting opportunities for professionals to be at the forefront of change in the delivery and management of public services. Changing social expectations, digital technologies, constrained budgets – these are just some of the factors driving a fundamental shift in the way that Government operates. Commercial innovation will be fundamental to enabling that shift and IACCM is delighted to see Government at the forefront in promoting the development of the commercial and contract management profession.

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