IACCM Contract Management Forum

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World Commerce & Contracting
2019-10-16 23:31:01

Pros and Cons about where Contract Management fits in an organization (e.g., Legal? Procurement? Finance? the Business?)

Hi everyone. I am looking for some thoughts / collateral concerning where does the Contract management group best fit in a firm? I know of one company where it is in Legal and they are considering moving to within Procurement (which is in Finance). any thoughts or experiences? thanks.
 •  Ministry of Defence  •   2019-10-22 13:59:48
In my team its cross functional; procurement, finance, project management. Whoever the beneficial user is may the best person to advise if the requirement is being delivered to time, quality etc. Suggest you might want to think about creating a cross function contract management team.
 •  KMD  •   2019-10-26 04:55:01
Dear Ted, it pretty much depends on your organisational ambition & objectives with the Contract Management function. In my oppinion many organisations don't realize the potential (strategic advantages and benefits) of Commercial Excellence - if the organisational understanding & culture around Contracts & Commercials are at a low maturity level you can see Contract Management placed as a sub-function in eg. Legal or Finance (being a somewhat defensive approach), while the few org. (as I know it) who realize the potentials are placing it higher in the organisation, some even spilt it out to a stand-alone veritical (making sure that the context of being a "support function" is embedded, implemented & maintained) of course balanced with the organisations overall aspiration, purpose and "nature". BR Ole
 •  BC Hydro  •   2019-10-31 00:03:28
In our organization, Contract management resides within the business; however Supply chain (Finance) own the process. Over the last 5 years we have been fully integrating Category Management and as a result putting in more strategic, long term agreements with an overview to the category rather than the need. Putting in such a strategic shift in business has saved us millions in our new contracts by looking at all the driving forces behind the need. Now that we have a robust Category Management program in place which covers 80% of our spend - we need to ensure that a enterprise wide practice is in place to make sure we are getting what we need, when we need it and are paying the right price otherwise the contract is simply a piece of paper. That is why Supply chain owns the process but the business is responsible for managing the work and providing the required resources to do so.
 •  PRS for Music  •   2019-10-31 15:42:32
Hi Ted

In my company the contracts team sits in Operations as the contracts they manager supports our deliverable pipeline. However, we have close links with our legal team and procurement sits in Finance. Looking at some of the replies it seems there doesn't seem to be any best practice.


 •  Mitsubishi Hitachi Power Systems  •   2020-03-18 03:53:08
In my organization, our pre-award and post-award contract management for new equipment sales are led by different teams (Commercial Operations and Project Execution respectively), however there are many functions that actively support and contribute to our contracting processes such as Legal, Finance, Sales, and Engineering departments. Legal's input and review into the contract is critical for protecting the organization from unacceptable risks, but we have the overall bidding and contract process managed by the Commercial team since we are focused on the company's strategic/sales goals.
 •  World Commerce & Contracting  •   2020-03-18 14:11:30
Hi Graham. Thanks for the response to this and sorry so late getting back to you. Is there an "owner" of the CM discipline? I would always expect that there would be participants from various functions but where does this all come together? is there any consolidated reporting view?
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