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Part 2 – Contract & Commercial Management 2016: the year in prospect

January 7, 2016

The speed of change, the volume of change, the nature of change ….. These lie at the heart of risk and opportunity and today we are experiencing a far more volatile and unpredictable environment than in the past. An environment of change typically has two impacts. One, it generates added complexity and a need for simplification; second, it offers opportunities for creativity.

These were the two features that I highlighted in my initial blog on ‘the year in prospect’. I tackled the topic of simplification, so will focus now on creativity.

To achieve contracting excellence, I suggest that the commercial community must consider change – and offer creative ideas – in three contexts:

  • within our commercial policies and process
  • within our contract templates and agreements
  • within our organization and its capabilities

So here are some questions to which I believe we should be seeking answers and which can spur creative ideas:

  • Are we advocates for change, using the insights we gain from the contracting process and market experience, or do we wait to be told what to do?
  • Can we break the syndrome in which contract change requests turn into a battle over fee versus free? How do we build collaborative change mechanisms into our contracts, for example based on improved economic value analysis or through the use of ‘agile’ frameworks?
  • Where do we gain the information and support we need to define and execute on organizational and capability change? How do we make the business case to gain an executive mandate?
  • Which of our terms and conditions are generating measurable business value and which are a source of cost or expense?
  • How might we gather and analyze performance data from across contract and relationship portfolios, in order to identify opportunities for change? How might we improve our awareness of competitive performance in these same areas?
  • Should we be amalgamating methods or resources in areas such as contract management and relationship management; or consolidating buy-side and sell-side contracting and commercial expertise?

There are of course many other possible questions or hypotheses, but I have observed that the groups which are flourishing are those which welcome change and embrace their role in its management through asking tough questions. That is the route to delivering functional value, so if you don’t have questions of your own, start with those above.

IACCM’s latest benchmarking report (available in published form to Corporate Members) provides a wealth of insights to comparative performance and explains how organizational models, measurements and technology impact business performance and the levels of creativity generated by the contracts and commercial staff. 

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