Contracts as connectors
High-performing organizations often view contracts – and the contracting process – as a form of ‘connector’. They understand that the process draws together the views and interests of a wide variety of stakeholders. It acts as a method to reconcile disparate views, which are then reflected in the agreed terms of contract.
Connectivity does not end there, because the contract is then used as a management tool to support implementation and performance management, ensuring a series of connections throughout the lifecycle. Under this approach, contracting is a source of quality control and protects against value erosion.
While this may be true for a few leading organizations, it is not the norm. In a recent IACCM survey, members were asked to rate the capabilities of their organization against a range of key maturity indicators. More than 300 corporations are represented in the results, which show encouraging growth of executive interest – one might say awakening – in the role that contract management can play in today’s increasingly complex and volatile business environment. To some extent, that interest has been reflected in investment, though the results show this to be rather variable.
There are interesting differences between regions – for example, who would have thought that the region with the biggest growth in capability over recent years would be South and Central America, or that the region with the greatest increase in management awareness would be the Middle East. But of course, different regions have very different start points – and the findings suggest that most organizations have many opportunities for continued improvement.
A summary of the results from this survey will feature on a free webinar to be aired on October 21st and which will then be added to the IACCM library. To register, visit the event website.