Too many procurement groups are on a path to nowhere. They are missing the golden opportunities being created by today's dynamic markets.
Traditional sources of business value are under sustained attack, with current models often protected only by a flimsy regulatory environment.
How much would your business be worth if it had no contracts? How confident would you be about your trading partners meeting their commitments if they were not documented? The purposes of a contract are largely to secure economic value and to operate as an instrument of business management and control. Research data shows that in many cases, the contracts we produce and the way they are managed are not 'fit for purpose'. The result is substantial value erosion.
When they respond to IACCM's talent surveys, 80% of contract and procurement professionals say they are confident that they understand the skills needed for the future. They also believe that they either have or can acquire those skills. Are they right?
Anyone handling contracts on a regular basis understands that managing stakeholders is one of the biggest challenges. Contracts touch and affect many people within and outside an organization, but in quite different ways. Some view themselves as owners, others as users and still more as reviewers or approvers. And then there are those who may simply be affected in some way by the aims or purpose of the contract.
The launch of the Journal of Strategic Contracting & Negotiation is a momentous event for anyone who cares about the field of contracting. For the first time, there is a dedicated academic journal that will promote and consolidate research in this area.
'We have a mix of customers, some on contract and some without contracts. I analyzed customer satisfaction results - and found those with contracts are almost twice as happy as those without. The contracting process results in clear expectations and more disciplined performance.'
51% of contract managers say that payment terms have become a more contentious issue in their negotiations, with many smaller companies under pressure to accept longer payment periods. Overall, 70% of companies say that they have adjusted their standard payment terms during the last 2 years.
Last week, one of my blogs included observations on the way that attitudes to contracts are changing. In response, drafting guru Ken Adams challenged my suggestion that these shifting attitudes will lead to fundamental changes in contract design. I think his implication is that change, to the extent it happens, will not significantly impact contract structure, but will simply move from undisciplined pedantry to an alternative and more rigid style of authoring, based on his style guides.
IACCM provides executives and practitioners with advisory, research and benchmarking services, contract management certification and training for contracts, commercial and relationship management professionals. IACCM is a non-profit membership organization that supports innovation and collaboration in meeting the demands of today's global trading relationships and practices.