Interesting question. I commend you on your efforts to assess CCM performance. As you say, to take your analysis further forward, you need to be able to compare against some form of industry or sector-wide benchmark. Within the IACCM, we have a deep set of benchmark data - collected over many years across multiple sectors. There are two major sources: 1) the IACCM Capability Maturity Assessment (which looks at organizational efficiency with objective insights into today's performance, comparisons to the outside world and a realistic assessment of the business impact); and 2) the Skills and Competency Assessment (which considers unique benchmarks that support organizational development.) IACCM offers a confidential and objective analysis of current performance and compares your results against industry norms and world-class standards.
Key to making use of these benchmarks is the consistent application of a robust question set. This is what allows the application of an apples-to-apples comparison. I'm not saying that you would need to repeat the survey you have conducted, but I think you may find that some repeat work is necessary though.
Please message me at firstname.lastname@example.org if you are interested in progressing this further. Paul
• PRS for Music
Thank you for responding and yes I would like to talk to you to understand what the IACCM can offer.
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.
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
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
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.
I think that the consideration was already made via the original agreement. The variation is a change to the original. So, in my opinion consideration has already been made. This relates to my experience in English Law only.
• Legal and Commercial Training Limited
In some jurisdictions (such as England and Wales) a contract requires 'consideration' (in addition to offer, acceptance and intention).
A variation of a contract is itself a contract - that is, an agreement to vary the original contract. Therefore, a variation will require consideration.
However, it may not be essential to expressly refer to 'consideration'. Consideration is an exchange of promises of value. When parties agree to vary a contract, the consideration can be found with both parties promising to carry on performing the contract as varied.
Having said that, if there is ever any doubt whatsoever as to the presence of consideration, it is always preferable to state clearly what the consideration is. Or (in English law) you could execute the document as a deed.
In the wording of your example, not only the price to be paid for the variation is set but also the terms and conditions or description of the variation is set: 'in accordance with the arrangements set out in this Variation Agreement'. In this case, I understand it as an option to choose: either the original contract, either the modified terms and conditions which works with a different price.
You may offer a variation without any additional cost any time the change to consider does not impact the resources, time or cost of the considered project; or whenever the parties have planned a variation mechanism or tolerance and already included it in the initial price and defined the scope of such authorized variation.
• Legal and Commercial Training Limited
NOVATION. A contact is between A and B. The contract is to be notated to C. This will require a try-partite agreement so that A and B and C will all have to agree. The effect of the novation is that A, B and C will agree that in future the contract will be effective as between B and C (with A no longer a party). A novation will, therefore, transfer to C the benefit and the burden of the contract
ASSIGNMENT. A contract is between A and B. A intends to assign the contract to C. The is a bi-partite agreement between A and B. A will assign the contract to C.
However, A can only assign the 'benefit' of the contract and not the 'burden'.
For example, if, under the contract, A is to to provide services to B and B is to provide benefits to A, the effect of an assignment will be as follows: B will be required post-assignment to provide the benefits to C. However, A will still be contractually obliged to ensure that the services will be provided to B. So if C does not provide those services to B, B will be able to take action against A.
Therefore, A will have assigned the benefit but will remain liable for the burden. Therefore, when A assigns the benefit to C, A will require C to give A an indemnity for any non-performance by C.
Thanks, Phyllis, I am glad that you found the webinar helpful; it was certainly a great session to moderate, with some really good questions at the end. I agree - we often don't pay enough attention to the learning style and the impact that has on how information is absorbed. Paul Branch
Hello Lamija, I have encountered this situation numerous times (in an industry other than the one I am in currently). My approach to this, usually with success, was to define a clause wherein the distributor is given a very clear revenue/sales goal for a defined period of time (say, 6 months to one year) during which we would not grant exclusivity, nor would we actively seek another distributor. If the distributor met the clearly defined objectives, we would then negotiate an exclusive arrangement. Many factors contribute to this scenario, however, such as the relative size of the market, the number (or lack) of distributors in the sector, the risk associated with "betting" on a single player, cultural social/considerations, etc.
In short, exclusivity based on proven performance. I hope that proves helpful.