Training, what training?
Contract and commercial management may be increasingly important to business success, but that is not translating to significant investment in training or raising skills. The bottom line seems to be, if you want to improve your knowledge, watch your colleagues and learn ‘on the job’.
Of course, there are exceptions – and some companies are making serious efforts to raise the capability and the status of their contracts and commercial staff. Research suggests that their investment yields dividends in terms of profitability, contributing through increased revenues (for sell-side personnel) and lower costs (from buy-side personnel). There is also an apparent – though harder to measure – connection to greater innovation and continuous improvement.
Last week, IACCM produced interim results from its current benchmarking study. It showed a growing divide between leading corporations and ‘the rest’. For example, top quartile performers stand out in terms of the way they develop capabilities; they also use a wider set of measurements to drive organizational performance; and they see major gains in productivity, cycle times, the quality of contracted outcomes.
As an example, in the ‘also-rans’, the primary purpose of contracts and commercial staff is still seen as risk mitigation through oversight of compliance. But about a quarter of respondents see the function’s role in a more positive context of creating competitive advantage, improving business productivity, managing change and facilitating external relationships. It is not hard to guess which group is winning in the market.
The top quartile use different performance metrics; they also invest in training to ensure consistent capability. Their commercial groups operate as business enablers, not in purely review and approval mode. They are also typically holistic in covering the entire contracting lifecycle, rather than providing fragmented support at different phases of the process.
These findings are important and interesting. They support the growing belief that contract and commercial management are key to 21st century business success.
The benchmark study remains open for input and those who participate will be first to receive results. It can be found at http://www.iaccm.com/services/research/