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Commercial Update #4: skills for the future

April 30, 2018
This post offers a summary of last week’s happenings from the world of contract and commercial management.

Skills: “It is vital for you to have a system in place that can track and analyze the skills your people already have — and those they may need soon.” A PwC / Said Business School report highlights the fears of CEOs regarding skill shortages, especially as businesses need to adapt to new forms of automation. Commercial skills – especially related to aggregation of data, problem solving and business acumen – are high on the agenda. Traditional skills, such as contract drafting, obligation management and bid management, steadily decline in importance. IACCM members are increasingly testing their skills and future readiness by undertaking the on-line IACCM skills assessment, which also provides a benchmark against peers and guidance on how to address skill gaps.

Barrier or contributor?: this week’s conference of Corporate Legal Operations counsel featured a panel discussion on contract value. The debate highlighted the two faces of legal groups, with some appreciating that contracts are key business enablers and that Legal must contribute to ‘making their business the counter-party of choice’. Others still see the contract – and their role – simply as a legal instrument that operates as a barrier to claims and disputes. It is this latter group who too often limit the ability of others in the business to optimise value. When contracts act as a barrier, they stifle creativity – and for large corporates, that is still far too often the case.

Big Tech and contract terms: in yet another pushback on ‘unfair terms and practices’, the European Commission is drafting plans for small businesses to mount class action suits against big tech companies. Unfair practices include unilateral rights to change contract terms, unbalanced dispute resolution provisions and lack of ‘appropriate transparency’. Perhaps not surprisingly, the big tech companies are complaining, but IACCM predicts they will fail in their protests. Increasingly, unfair or unbalanced practices are being seen as an abuse of power that contributes to the erosion of social trust.

Does outsourcing work?: ultimately, organizations delude themselves when they think they can outsource risk. An excellent article http://www.publicfinance.co.uk/opinion/2018/01/lets-shed-some-light-public-sector-contracting challenges whether outsourcing really is the right solution. Too often, the short-term appeal of cost reduction outweighs the mid-term possibility of service disruption, reputational damage and added expense. Commercial staff in both customer and supplier organizations must become more proficient at checking capabilities and ensuring that contracts are economically viable.

Blockchain advance continues: Samsung is the latest to announce its plans to deploy blockchain technology to support its global supply chain. The implementation will reduce cycle time and cut costs by streamlining today’s largely paper-based processes – for example throughout the shipping process.
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