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Re-thinking the contract management role

November 11, 2015

” All large IT organizations now need to consume services from an increasing array of Service Providers to remain competitive and keep up with the rate of change in the industry.  This means that IT organizations are now required to integrate and orchestrate services provided by others, as much as deliver the services themselves. This requires organizations to change; change their processes, their skills and their culture.”

This extract describes a new book that outlines the changes needed in today’s delivery of IT. It is targeted at project managers, service delivery managers, IT professionals – and it covers critical aspects of contract development, contract management and relationship management. The authors have identified the point that this new world of service provider interdependence requires “collaborative working relationship between organizations and their Service Providers to maximize the benefit of multi-sourcing” and addresses the mechanisms that “govern and manage the linkage of services, the technology of which they are comprised and the delivery organizations and processes used to operate them, into an operating model.”

Oh, you might say “That clearly reflects the role that Procurement and Contract Management will fulfill”. But you would be wrong, because the authors clearly see no particular role for these functions. Indeed, they reflect more the findings of a recent survey that discovered 78% of CIOs see Procurement as ‘a hindrance’.

I know that some contracts, legal and procurement professionals are rising to the needs and challenges of a fast-changing world in which traditional thinking about the role of contracts and the management of risks must alter quite dramatically. But studies such as IACCM’s ‘Top Negotiated Terms’ show that old habits are hard to eliminate and far too many contracts remain focused on battles over transactional risk allocation. More importantly, staff in contracts, legal and procurement are not acting as champions of change – and that is what ultimately makes them of limited relevance to CIOs and other business executives who depend on contracts to achieve their business goals.

As this new book on Service Integration and Management clearly shows, if we do not step up to providing the changed ‘processes, skills and culture’ that our interconnected world demands, others will simply step into the gap … and we will be victims of the change.

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