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Why Buyers & Suppliers Must Work Together


Earlier this week, I presented to a large – and highly regarded – supply management team. One of the questions that was posed related to the question of whether there can ever really be trust between buyer and supplier.

“In your presentation there was a slide relating to the focus of relationships, with “cost” on one side of the spectrum and “innovation” on the other.  One of the points discussed was that we need to carefully consider what type of relationship is appropriate for each area. We have often over-commoditized our thinking by focusing too narrowly on cost, at the expense of commitment and innovation. 

In my experience, I have seen a tendency to swing back and forth between the extremes.  For a time the focus is on cost, but we end up with suppliers that are so lean that they cannot keep up with new trends.  Then we shift to building long-term relationships based on trust, but after a while we discover that the partnerships have become too comfortable, and we find ourselves at a competitive disadvantage.

How can we utilize our contract management tools to foster commitment and encourage innovation, yet maintain a competitive edge?  Can we nurture long term partnerships that do not become complacent?”

My reply is a work in progress, but here are some initial thoughts.

This is a great question and it is of course one that goes to the heart of any ‘collaborative’ relationship – essentially “Can I trust the other party to consider my interests and not take me for granted?”
 
For now, here are a few broad comments (and I hope readers will add theirs): 
  • Why the swings back and forth? Often we find that these are driven by leadership changes, rather than any real shift in strategic needs of the business. If we are to build and sustain trust, it is critical that supply management leadership understands the impact of inconsistent behavior and is ready to deal with its consequences. Trust, once corroded, is awfully hard to rebuild.
  • How are you choosing the partners for long-term relationships? When I talk with organizations – buy-side and sell-side – they often highlight their desire for closer relationships with the other side. When I explore what they mean, they are in fact often expressing a desire for collaboration based upon relative power. In other words, where they feel relatively less powerful, they want collaboration, but in those relationships where they feel powerful, they don’t care. The point here is that collaboration has to be a mutual desire, driven by mutual self-interest – it cannot be manufactured.
  • Building from this point, the onus is on the party proposing collaboration to identify the reasons why it will be mutually beneficial. In the end, this is a question of the economic benefits that can accrue – but the driver for these could be reputation, innovation, cost benefits, reduced risks etc. The key is to discover the formula and to have both sides convinced that a long-term, stable relationship has benefits that outweigh the traditional ‘stop-go’ approach of power-based negotiation and supplier management..
  • Once the formula is understood, there is something specific to be regularly discussed and monitored. And if the benefits are truly there, it will be in the interests of both parties to demonstrate to the other that they are still ‘playing the game’. With today’s technology, you should unearth ample means to enable free information flows between the parties. After all, if it is truly a relationship of trust, there will be nothing to hide.
  • It is also essential that the parties are mature and honest enough to understand that relationships do not stay the same for ever. The original drivers may change – new products, new markets, new technologies, new competition could erode the original basis for the collaborative arrangement. The key here is to have a fair and equitable basis for its dissolution and this should be embedded into the agreement (essentially, a pre-nuptial).
  • So bottom line, a key shift here is to stop thinking about your need to gather evidence of wrong-doing and instead focus on the way you will each provide on-going reassurance to the other.

From these observations, I am sure you will readily see the point I made about the negotiation and contracting process creating a governance framework for high-performance relationships. But of course, it is not every relationship – and while collaborative instincts should permeate all long term relationships, there will be matters of degree, driven by the scale of the economic gains.

 

 

Mixed Fortunes For Government Contracting


The press yesterday carried three stories that revealed mixed fortunes in Government and Federal contracting. A major project success in the UK was counter-balanced by two examples of where things can go wrong if governance fails.

Public sector projects are rarely highlighted for their success, so it is good to see that a major contract to transform the UK’s employment and social security offices has been commpleted on time and under budget.

The $3.5bn project ran for 5 years and merged 1,500 separate offices into a streamlined 800 Jobcentres. It has been hailed by the UK parliament’s public spending watchdog.

The elements that generated success are not complex, but are frequently missing or compromised. They were: 

  • Leadership was consistent throughout the project. Changes in leadership are frequently associated with failure.
  • Project teams were appointed and sustained throughout the progam. They brought extensive experience to the task.
  • The project took guidance and drew heavily on materials and advice on past big projects from the National Audit office and Office of Government Commerce.

Moving across the Atlantic, the long-running saga of a $35 billion contract for flight refuelling aircraft shows no sign of ending. Despite the apparent threat to national security that on-going delay implies, the US Government decided to make no decision on progressing this award, leaving the in-coming administration wth the problem.

This story began in 2002, when a contract awarded to Boeing unravelled followign exposure of improper practices during the award phase (actions which resulted in imprisonment for both Boeing and Government pesonnel). Subsequent competition resulted in a major win for EADS and their US partner, Northrop. But now it was the turn of Boeing to cry foul – and to whip up nationalistic fervor among politicians with claims of job losses and decisions contrary to the national interest. 

Will the EADS contract be re-affirmed? Will the bidding process be re-opened? Despite promises to reach resolution before November’s election, yesterday’s announcement revealed there will be even more delay – and meantime, the US Airforce continues to operate with a seriously outdated fleet of re-fuelling aicraft.

Another sad example of the extent to which politics can so often get in the way of good governance.

Back in the UK, the stream of Government embarrassments over data loss claimed a victim when PA Consulting had a three year contract terminated because of its falure “to live up to contractual obligations”. An employee had ignored security rules by downloading data to a memory stick which was then lost.

The Government is reviewing other, more lucrative contracts with PA and some other private sector providers. However, a series of incidents have revealed the challenges of maintaining control over sensitive data. And as an Opposition spokesman observed: “It is not good enough to claim that the clauses in the contract were robust, and pass the buck to a consultancy that (the Minister’s) department hired and was responsible for supervising.”

In other words, many of these hard-fought contract clauses offer no more than a worst-case scenario fall-back. They do nothing significant to recover a bad situation. As with so many instances of failure, the real issue is increasingly the inadequacy of governance procedures to encourage and oversee performance related to complex risk issues. Perhaps if we were all less focused on imposing rigid terms, inflexible rules and compliance, we might spend more time discussing and designing robust and shared responses to risk and creating innovative approaches to performance monitoring and management. Just as this problem has in large measure been created by modern technology, it seems likely that technology will play a major part in its resolution.

For PA Consulting, the blemish on reputation will prove far more damaging than the withdrawal of a specific contract. Certainly, future business for PA and other service providers is likely to depend on their ability to demonstrate far more robust capabilities in data protection and security. All contract negotiators can expect increased emphasis on these aspects of contracting. Will we respond by more entrenched battles in the negotiation, or by developing reliable solutions and associated commitments?

Contract Management Software: Boom Or Bust?


Today’s economic conditions have certainly got many politicians and business leaders worried. So as he heads towards his annual user conference, it seemed timely to ask Upside Software CEO Ashif Mawji how he is feeling about the prospects for contract management applications.

Overall, he is feeling buoyant. The economic downturn it accelerating efforts to reduce costs, and also to add value, The right CLM solutions offer both, so demand is high.  But Ashif made some more interesting observations, which accord with our experience at IACCM. He commented that Legal is more and more the drive behind CLM acquisition. In addition, the ‘richness’of the solution they are seeking is growing – to incluce performance management, sophiticated reporting and advanced complaince management. And finally, the realization of this need for CLM to be an enterprise application (not just a legal process tool) has led to a high level of migrations from some of the early implementations that simply cannot address today’s needs.

Finally, what about the user conference itself? it is open to Upside customers, prospects and others who want to learn and it runs September 10 – 12.  The agenda includes:

  • Case study from Alcon Labs discussing their implementation, lessons learned and value received.
  • Case study from United Healthcare discussing their implementation, lessons learned and value received.
  • Andrew Bartels of Forrester will go through the four stages of CLM deployment and what to expect in each stage in terms of resource commitment and value received
  • We will showcase our v6.1 (due Sep 2008) which amongst other things has the following key enhancements
  • enhanced collaboration with Microsoft Word and also the world’s leading redlining engine
  • enhanced document management functionalities now included in our software
  • enhanced email collaboration, including enabling automated email processing (e.g. external emails can be sent to the system and they will be automatically attached to the relevant contract record, etc.)
  • We will discuss the roadmap and have an interactive dialogue with the users to decide what we should focus on (in essence, our customers shape our roadmap)

The only thing that is missing is me – no invitation this year. I guess I am a victim of the market moving on!

The Role Of Communities In Learning


I was interested to read an article in the GeoLearning newsletter regarding the growing role of ‘Communities of Practice’ in the overall learning process. They observe: “Communities of Practice (a.k.a. CoPs) exist all around us whether we realize it or not. Whether a group of parents sharing ideas on bedtime rituals for toddlers, or more formal knowledge sharing in the workplace, CoPs are a way to share what you know and to learn from others.”

This is of course an area that has been recognized at IACCM for several years and has generated some remarkable results fdor those who participate in our assessment and training programs. The ‘on-line communities’ that feature as part of our managed learning solution have proven effective in raising the value and contribution of staff groups not only as a result of  the training, but during the learning experience.

IACCM’s networked groups operate at two levels. One is within the company team or function undertaking the web-based training. This is enabled through both message boards (mentored and overseen by IACCM experts, as well as internal experts) and live webcasts. But the IACCM use of communities goes further. Our 10,000+ members are also divided into ‘communities of practice’ and act as an instant research base. So when we are not sure about the right answers, we have instant recourse to an amazing body of knowledge – supplementd where necessary by our experienced research staff.

I have to agree with GeoLearning when they say “Communities of practice that are technology-enabled take the idea of managed learning to a whole new level. A Web-based collaboration tool … can power CoPs with a rich set of discussion tools that enable users to wrap conversations around content.” But in our experience, the potential benefits go much further. Those conversations can become the driver for visible and immediate change and improvement. IACCM member companies have recorded rapid savings and cost improvements as a direct result of the ideas and research generated from the interactions during a learning program.

So why isn’t everyone leaping at the opportunity? Once again, the limiting factor is primarily the reluctance that many have to see technology as a key tool in personal and organizational development. This is especially true of the older generation that primarily make up senior management and senior professionals – the types of people who need to support such programs with both the decision to implement and a readiness to act within them as mentors and experts.

Communities have an energising and potentially transformational role in the learning process. Unfortunately, for many companies, it seems they will have to wait for the Facebook generation to rise to the top before they will understand the benefits and move to effective deployment.

Managing Global Supply Chains


A recent study by McKinsey confirms that senior executives are increasingly concerned about the risks facing their supply chains. They also feel that supply chain management is failing to deliver adequtely against top strategic goals.

The fact that risks are perceived to be increasing is scarcely a surprise. However, the extent of regional variations in the  areas considered to be influencing supply chains is interesting. For example, in North America the top three concerns are rising energy prices (39%), financial volatility (38%) and increasing complexity of products and services (35%); in Europe, product and service complexity is cited by 60%, followed by rising energy prices (33%) and increasingly global labor markets / rising wage costs (25%). Developing markets select the same three issues as North America, though in different sequence.

Other factors influencing  supply chains show wide disparities. For example, 25% in North America see the adoption of increasingly scientific, data-driven management techniques as significant, against just 4% in Europe (and 16% in developing markets). Similarly, 20% of North American and Developing Market participants are concerend about exposure to differing regulatory environments in overseas markets, versus 9% in Europe.

The strategic goals for supply chains reflect the findings of a recent IACCM survey. Reducing costs is the number one priority, followed by improving customer service and getting products to market faster. For suppliers, assisting with these goals woudl represent a source of competiive advantage, since executives are far from satisfied with current progress.

To improve performance, they are focused on increasing the efficiency of supply chain processes (71%), actively managing supply chain risks (56%) and increasing inputs from low cost countries (47%).

The survey also reveals a continuing trend towards centralizing the management of supply chains. In part, this is to address talent and knowledge issues – indeed, ensuring that different locations share knowledge emerges as the number one challenge in global talent management (again a finding in common with the wider IACCM membership).   Other major challenges are managing communications and cultural differences and attracting and retaining entry level talent. The issues of communications and knowledge sharing are to some extent attributed to the (lack of) integration of IT sytems and vendors on a global level (these pre-requisites were highlighted in a recent story about P&G’s success in developing global shared services).

Executives do not identify any one’big issue’ in globalizing the supply chain. However, the importance of increased cross-functional collaboration is highlighted as a dependency in meeting strategic goals. This suggests that organizations adopting the IACCM ‘best practice’ service delivery model will gain a competitive edge on their more traditional rivals.

Unlocking Talent


Writing in the Opinion column in The Times this week, Libby Purves exhorts us ‘to break the rules’.

Her article cites a number of recent instances where ‘bureaucracy’ has either caused or threatened to cause disaster and loss of life.  These include disciplinary action against a lifeboat crew for launching their boat and the sad stories of call centers that failed to despatch medical help because the caller could not give the postcode.

Her point, of course, is not that rules are unnecessary, but that petty bureaucrats often misunderstand or misapply them. Her words almost echo those we have been using at IACCM: she talks about people who “get the traning, tick the right multiple-choice boxes and refuse to think there might be another choice, not listed”.

This brings to mind the whole balanced scorecard syndrome. It reminds me of procurement and contracts staff with checklists of standard terms and conditions. It reflects a conversation I had with a General Counsel this week: “Wouldn’t you think that the purpose of a risk register is to induce action?” he asked me. “For many people, they seem to think that they have done their job just by filling in the boxes.”

Let’s not pretend such stories are unknown in our organization. The image of lawyers, contracts and procurement staff as slow, risk averse and unimaginative is not a creation of fiction. It reflects real experiences. Even today, I see the battle raging in many companies between the champions of compliance and the champions of innovation and change – as if these were somehow alternative states, rather than mandatory conditions for business success which must therefore be reconciled.

Why does this happen? Why do some people just apply rules in this mindless way? Sometimes it is simply lack of time or lack of caring. Others it may be down to fear of making decisions or enjoyment of petty power. No matter what the cause, it is the duty of those who care about their image to ensure it does not happen. Any ‘profession’ is tarnished by those practitioners who fail to demonstrate empathy with their clients and lack the intelligence or ability to exercise judgment. They should be trained or they should be removed.

Once again, Libby Purves sums this up in terms that mirror the IACCM message: “Real training lays down a framework of expertise and safety not to prevent initiative, but to free it. If you really know the rules and their purpose, you can judge when to make an exception and break them.”

In today’s business world, where creativity and the ability to adjust to rapid change are such critical elements of corporate and personal competitiveness, this ability to make good judgment is at a premium. Yet all around us is a growing body of rules, both internal and external. These run the risk of creating growing inertia and conflict – but alternatively they offer the opportunity for talented managers to demonstrate their ability to apply judgment and imagination in their application.

And lest you read this and think “this does not apply to me”, let me pose one final challenge.

Bureaucracy is not just about the way we personally behave. For example, many lawyers are great at exercising judgment. But they often believe that they are the only ones with that ability, so they force their surrogates to become bureaucrats by demanding that situations be referred to them. They should instead be thinking about how they could empower others to make better decisions. Forcing people to gain permission for their actions is just another form of bureaucracy. Making yourself into a funnel slows things down and often forces people into the bad decisions that you claim you are trying to avoid.

Hence Purves’ point about training. Our task is to manage the complexity of a rules-based culture by empowering others to make good decisions. In a perfect world, we would in fact make ourselves unnecessary! (But don’t fear, perfection still looks a long way off.)

Raising Organizational Status


I have long been an admirer of the quiet, yet effective, way that Procter & Gamble have weathered the challenges of their markets. They seem to be one of those organizations that establishes good practices, but does not become boastful about their success. Perhaps they understand how temporary success can be.

Those charged with contracting and sourcing are among the groups I admire, so I was interested to discover an article in McKinsey Quarterly that recorded an interview with the worldwide head of Global Business Services, Filippo Passerini. Having read it, I believe there is much that members of our community can learn from the approach.

The article focused on the process that P&G had followed to develop the Global Services organization and then to move it from the role of ‘service provider’ to that of ‘strategic partner’. It is a status to which many in our community aspire, but relatively few reach.

So what can we learn from P&G? Passerini set out a number of areas that he believes fundamental to success. Perhaps unsurprisingly in a global organization in the networked age, number one on his list was to establish a common IT platform – to make sure the various groups can talk to each other, share data, ensure seamless process support. It was this that enabled ‘the eleimination of duplication’ – locally based services teams were replaced by global centers that offered 24/7 support.

He also attacked the traditional functional model -Passerini understood the need to destroy silos. So he was delighted to integrate functions and achieve economies of scale through improved integration. The move here was to create process-based operations – so for example, a single group handling procure-to-pay, rather than the original split between procurement, accounting and finance. Without handovers, conflicting measurements and incentives, complexity could be reduced and cycle times improved.

Passerini did not immediately start a process of outsourcing (though he did move quite rapidly to offshoring to captive centers). He is convinced that cost-based outsourcing will often fail – because the process won’t work. Therefore his philosophy is to get the process right before you outsource (and in the case of Procurement, they actually decided not to outsource at all). The result is that, when outsourcing occured, the provider was delighted to receive the P&G staff – and rapidly used them as a source of competitive advantage.

“‘By outsurcing the the more repetitive commodity work … we could in effect de-commoditiize our shared service business and allow it to focus on innovation and developing new business capabilities”, commented Passerini.  This approach has ensured that the relationship with outsourcing providers remains collaborative and strategic. And it has led to the shared services organization not only being highly valued as a source of competitive advantage, but also viewed as a positive career opportunity.

To protect this vaue-add, P&G have separated the resources focused on continuing cost reduction from those focused on innovation. Passerini recognized the danger that ‘a one-sided focus on costs could undermine the building of business capabilities’.

There is so much in this message that is relevant for our community. The approach and model aligns directly with the service delivery model promoted by IACCM. And the challenges that Passerini outlines are precisely those that we find inhibiting progress by many in our community. The benchmarking we offer through the Capability Maturity Model has demonstrated the constraints that many face as a result of inadequate technology solutions and the weaknesses of process, as opposed to transactional, perspectives. This traps many or our members in transactionally-focused groups that are limited in the value they can deliver or demonstrate to the business.

Compliance Stifling Value


Research by Infor suggests that Supply Chain managers in the UK “spend up to 52 days a year dealing with regulatory compliance”.

Even allowing for the fact that these results may be somewaht exaggerated (Infor provides technology solutions), there is little doubt that compliance monitoring has become a significantly greater task for many of those in supply chain, legal and contract managemet jobs.

Infor’s findings suggest that compliance monitoring comes at the expense of other activities – such as work that will “unlock cost savings, optimise productivity and add all-important value to the business”. And the fact that manySupply professionals feel there is no robust risk management strategy covering supply operations obviously suggests that relief is not at hand.

Since compliance is by nature a rules-based activity, it is manifestly suited to automation. But of course that depends on sufficient analysis and recording, rather than reliance on the awareness and competence of individual managers.

Among the other interesting findings in the Infor research were the following:

  • Other major concerns include the need for better supply chain visibility (96 per cent), shrinking margins (90 per cent), introduction of new products (89 per cent) and escalating consumer expectations (89 per cent).
  • 82 per cent of supply chain managers said they were concerned about reducing their carbon footprints. But 47 per cent stated cost as a barrier to implementing green initiatives and 32 per cent claimed that an inability to measure results hindered progress.
  • Three quarters of those polled said that their supply chain’s geographic reach had increased in the last two years. Almost half (43 per cent) claimed that their supply chain now incorporated the UK, Asia-Pacific, the Americas and both Eastern and Western Europe.
  • 67 per cent said that they were more likely to offshore parts of their supply chain compared with two years ago. While Asia-Pacific would be the offshore hub of choice for 47 per cent, 53 per cent leant towards Eastern Europe as their preferred destination.

 

Unfair Contract Terms Struck Down


Are the US courts on the offensive against big business and its contracting practices?

Recent judgments have struck down key clauses in click-through End User License agreements. And now the courts in California have ordered repayment of millions of dollars in early termination fees for mobile phones. There are moves afoot to impose similar limits across the US.

Are these cases indicative of wider movements to change the balance of power in contract terms?

Unfortunately, the answer seems likely to be no. In recent years, anecdotal evidence from IACCM members suggests that companies have been taking a tougher line with their contract terms. This certainly applies to buying practices. But it seems pervasive in any relationship where there is an imbalanceof power – and it is these situations as they relate to consumers that the courts have been addressing.

These findings all relate to consumer contracts in which the supplier clearly has far greater power than their customer. And in may cases, theterms being applied represent something close to industry practice, so customers are not even able to choose suppliers based on differentiated terms.

In those circumstances, thank goodness the courts are standing up for reasonable and fair behavior. However, it is sad that no suppliers seem to understand the competitive advantage that can be gained by differentiation through more imaginative – and friendly – terms and conditions. Burdensome terms simply alienate your trading partners and customers. And those sentiments do not only apply to consumers.

The Role Of A Contract Manager


(Author’s note: The basic responsibilities listed in this article remain valid today. However, the role has matured and in many organizations is focusing increasingly on areas of greater strategic importance, based on analytics and business enablement. For an update on this article, see also https://commitmentmatters.com/2014/01/28/the-role-of-a-contract-manager-2014-update/)

I note that many people still seem puzzled by the role of a contract manager. It is a frequently asked question and recently generated significant debate on the IACCM website (Contract Management Forum).

Among Contract Managers themselves, there is widespread belief that the title (and its variants, such as Commercial Manager) masks massive variations in job role, status and responsibilities. Hence it is often felt that external hiring (especially across industries or geographies) will be difficult, if not impossible.

How great are those differences? In fact, our research suggests that the core responsibilities of Contract Managers (and by deduction, Contract Management Departments) are very similar. Drawing from the postings on the IACCM Forum, these might be summarized as follows:

(Please note, while in the interests of clarity these responsibilities are written from the perspective of a contract manager supporting sales (which is where there is a longer history for the role), they are easily converted to a description for Procurement, where the tasks are very similar, but more likely to be restricted to a post-award role.)

 

Responsibilities include:

 

o    Contracts (various: including formal, short form, and annual contracts)—Drafting, Evaluation, Negotiation and Execution: 

·         Non Disclosure Agreements, Sales / Purchasing Agreements, Sub-contracts, Consulting Agreements, Licensing Agreements, Master Agreements, review of customer proposed terms and conditions

·         Distribution Agreements (resellers, agents, joint marketing etc.)

·         Commercial and Public (Federal, State and Local Municipalities) Contracting

o    Serve as the point of contact for customers on contractual matters. Act as contractual “middleman” between company employees and customers, ensuring timely review and approval / reconciliation of variations.

o    On all standard and nonstandard contracts, provide redlined recommendations and often negotiate directly with customer attorneys or purchasing staff until consensus has been reached

o    Maintain contractual records and documentation such as receipt and control of all contract correspondence, customer contact information sheets, contractual changes, status reports and other documents for all projects.

o    As needed, provide guidance on contract matters to project managers or other operational staff, including training to new project managers and other employees in contracting practices and procedures.

o    Develop and implement procedures for contract management and administration in compliance with company policy. As appropriate, contribute to or influence company policies.

o    Monitor compliance by company employees with established procedures. Identify areas of recurrent pressure.

o    Work with Risk Management Department / Finance to coordinate contractual insurance requirements.

o    Work with Finance to ensure adherence to broader finance and risk requirements such as revenue recognition, pricing and discounting policies,, export controls etc. May include ‘financial engineering’ and understanding / evaluating economic impact of terms and term options.

o    Support Product Management / Marketing to ensure company products and services are offered with appropriate, competitive terms and conditions

o    Monitor competitive terms. Monitor customer satisfaction with our terms and conditions and contracting practices. Recommend changes.

o    Ensure that signed contracts are communicated to all relevant parties to provide contract visibility and awareness, interpretation to support implementation.

o    Handle on-going issue and change management

o    Monitor transaction compliance (milestones, deliverables, invoicing etc.)

o    Oversee Service Level Agreement Compliance

o    Ensure contract close-out, extension or renewal.

 

 

 

The emphasis within this list will vary. For example, some groups have little or no responsibility up to the point of contract signature; and others little or no role after signature (though there is a marked trend towards consolidation of pre- and post- responsibilities within the same group). Reporting line also makes a difference, with groups reporting to Legal tending to have a narrower set of tasks (potentially little responsibility for non-legal aspects of the contract or related policies and procedures, especially in terms of any financial accountability). Geography has certainly been a major factor in the past, with few Contract Managers visible in non-Common Law countries. However, this is also changing as business globalizes and contract forms and procedures grow more consistent.

 

One of the biggest differences between organizations lies in the extent of authority and accountability that Contract Managers have for making contract changes. Another big difference is the extent to which the Contracts organization has solely deal-based responsibility, versus a more strategic role in overall company policy and commercial / contractual strategy. For example, does the function simply implement and protect other people’s rules, or does it advocate change and participate in key policy discussions?

 

Today’s ‘best practice’ contracts groups are those with a holistic responsibility for the contracting process (pre- and post- award). They are increasingly involved in establishing contracting policies that support market and business strategy – and this is something that cannot readily be done if resources are fragmented. As a Professor of Economics at one of the major UK business schools recently commented: ‘The value of contracts is in the outcomes they produce’. He also observed that today’s contracts are becoming more complex and the risks of failure more severe.

 

Too often, companies have had no one providing the oversight for achieving those outcomes or managing that complexity and risk – and that is why the role of Contract Manager is emerging as a critical competency in today’s organizations. It is also why Contract Managers themselves need to start focusing less on what makes them different, and more on recognizing that there is a common and consistent core of activities that underlie their role and professionalism.

For more information and research on contract and commercial management, or to explore training and certification, visit www.iaccm.com – the home of the not-for-profit organization that represents the field of contract management globally.

(See also an April 2009 update to this article – The Role Of A Contract Manager – Revisited)