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The big issues of contract management

January 27, 2015

What are the topics exercising the minds of contract and commercial professionals? What issues are enlivening their conversations?

Of course, to many non-practitioners, it is probably hard to associate the subject of contracts with any concept of ‘being enlivened’. But in reality, there are many active and important debates going on, reflecting the many tensions and the significant growth in importance of contract and commercial management.

Yesterday I started a series of blogs aiming to highlight and agree ‘what are the top issues we need to address?’ My initial list has already drawn some great comments and material for further options. Today, however, I want to offer another pre-prepared list of the ‘top ten issues for contract and commercial management. Please keep your ideas and comments coming – to make real progress, we first need a debate that establishes the greatest priorities. Our community must build consensus on the things that matter and solutions to them. That is what being a professional is all about!

10 TOP ISSUES FOR CONTRACT & COMMERCIAL MANAGEMENT

– should the law department ‘own’ contract management?

– does contract management software serve any useful purpose?

– what’s the difference between a contract manager and a commercial manager?

– can suppliers ever be trusted?

– can Procurement ever behave reasonably?

– is it possible to show an ROI from contract management?

– the only way to get compliance / better business decisions is to force ‘the business’ to get approvals / force them to involve us earlier

– the allocation of risk is the most important thing in contracting so we will always need to spend our time on that issue

– senior management doesn’t understand what we do (implicit in this: “and that is their fault”)

– “it’s impossible to define the role of contract / commercial management – we do so many different things”

2 Comments
  1. Martin Loenstrup permalink

    Hi Tim,

    Would like to say that it’s refreshing to see that IACCM now take a fresh look at the contract management state of mind, something which I believe is much needed taking into account the increased focus on CM. It require that professionals and industry matures and provide more strait answers compared to earlier years.

    A few added pointers;

    – will compliance play a role in justifying Contract Management in 2015?

    – is the collaborative approach just a highflying ideology or just still ahead of time?

    – is contract/commercial management yet another definition of similar roles depending on industry and geography?

    – should Contract Management be located as a separate department in the organization or is this actually a limiting factor?

    – is the new trend of Contract Management certifications worth the money or do we need a global standard to avoid individual and varying quality?

    Martin Loenstrup
    Senior Legal Advisor & Compliance

    • Martin, thanks for these comments! I want to reply to each of them:

      – will compliance play a role in justifying Contract Management in 2015? I think compliance is always a key part of the role and of any robust risk management regime. However, the real issue in my mind is the extent to which contracts / commercial professionals are simply monitoring compliance, versus evaluating the consequences of non-compliance and making or assisting in judgments over this. Some professionals absolutely see their role as being about the management of deviations; some even see that role at the strategic level, as the champions of the policies on which compliance standards are based. This is a very wide spectrum of difference, ranging from the high value strategic role to a low value administrative role.

      – is the collaborative approach just a highflying ideology or just still ahead of time? It is happening, whether or not contracts staff care to acknowledge it. Again, do we simply dismiss this trend and say we have heard it all before, or do we take the time to understand it and help the business appreciate how it can occur? We go back to my earlier comment – are we strategic enablers, or administrators?

      – is contract/commercial management yet another definition of similar roles depending on industry and geography? These terms are unfortunately confused because they do vary significantly in their role and meaning depending on geography and industry, even by company. But the scale of those differences tends to be exaggerated, because it often serves people’s interests to position themselves as ‘different’. However, from the perspective of professional status, greater consistency is critical and that has been – and remains – core to IACCM’s purpose and achievements. We perhaps confuse core methods and techniques and code of practice (which are core to any profession) with the issue of specialist knowledge (which varies by job role).

      – should Contract Management be located as a separate department in the organization or is this actually a limiting factor? The answer depends very much on purpose. Clearly, if the role is administrative, it can be anywhere. If the focus is on adding value, the extent of that value will be constrained by organizational reporting line. Our research points quite clearly to the impact of reporting line on the quality and value of output.

      – is the new trend of Contract Management certifications worth the money or do we need a global standard to avoid individual and varying quality? We have a global standard – that is what IACCM brought to the world. In this age of globalization, most professions are trying to move towards global standards. Contract and commercial management was possibly the first ‘profession’ to have such a standard. It is therefore ironic that we are seeing emergence of ‘local’ variants which threaten to undermine the status and standing of contracts and commercial practitioners by once again raising questions over what they do, what they know, whether they have meaningful qualifications. Many times, the providers of these certificates are opportunistic,, for-profit organizations, riding on the back of the work that has been done to raise the profile of this field of practice. However, others have a valuable contribution to make in bringing new ideas, new methods and local availability of training. IACCM’s approach is to collaborate with such organizations, to maintain a global certification standard but to support the availability of local delivery.

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