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Commercial Round-Up: Highlights of the Week

April 6, 2018

Are you confused about the differences between ‘outcome-based’ and ‘performance-based’ contracts? Or perhaps simply want greater clarity on how to form or manage them? Andrew Jacopino, an expert in their use, recently updated his blog articles on these topics, plus some outstanding guidance on defining KPIs.

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“Business contracts need to balance the rights of each party to ensure they aren’t unfair, as smaller firms may not always be in a strong negotiating position.” That statement came from the Australian ACCC in a finding against financial services firm, Cardtronics. It reflects growing pressure from governments around the world on abuse of power by large corporations – an abuse that often operates against both the public and business interest by limiting competition and pushing up costs. Perhaps it’s time to question the fairness (and effectiveness) of your business terms?

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A recent IACCM survey on organization structure for supply chain found that most companies wish they had a different model. The study, which focused on the oil and gas sector, revealed that few people believe that centralization or decentralisation work well; they overwhelmingly prefer center-led or matrixed models, no matter which aspect of supply chain management they are considering. Some 30% of organizations have changed their structure in the last 12 months.

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An initiative by legaltechinnovation.com is measuring law firms on their uptake of technology and the extent of legal innovation. The findings to date are generally not impressive, showing very limited adoption and use – though focus has been on large firms, rather than emerging ‘disruptors’. Analysis has supported the hypothesis that UK law firms are ahead of many others, especially in their use of artificial intelligence and project management technologies. But no sign yet of the major fee reductions that technology should be delivering.

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Are contract and commercial skills adapting to changes in the business environment? An analysis by IACCM confirms that pressures for greater speed, agility and the introduction of new technologies are placing real strains on commercial staff. These are reflected in the skills assessments and benchmarks undertaken by IACCM, which reveal significant shifts in management expectations – but many practitioners are struggling to keep pace. Areas such as problem solving, change advocacy, technology use and financial awareness are among those where the largest gaps are emerging.

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