• Australian Red Cross Blood Service
Here are a couple that I just quickly came up with:
1. Can you recall the last time that you engaged with our team. Was it;
a) In the past 7 days
b) In the past 4 weeks
c) In the past 3-6 months
d) More than 12 months ago
c) Who is this?
2. When you engaged with our team, did you know the name of the person you were contacting?
a) No, I had to look someone up using either the contract, website, intranet, LinkedIn
b) Vaguely, I have spoken to a few different people in the course of business
c) Yes, I have regular communications with a consistent point of contact
Good evening Abdullah - I'll contribute an observation on the first one. Perhaps others who have been doing contract management and procurement for longer than me might have a different view, or say it more eloquently, but here goes....
Purchasing is a subset of procurement. It is the giving effect to a lot of the procurement work that you've done earlier (i.e. establishing what you want, identifying suppliers etc).
That said, I think that you can purchase without doing procurement, and in fact, I'd go so far as to say that you can even get the same outcome.
However, only by procurement can you demonstrate that you've got the right outcome. If you only purchase, and don't understand your needs, identify the market and consider the offerings against your needs, you can't demonstrate that you've got the best outcome for the business.
And this is where I think we as a group can demonstrate our worth to the business. We can show with procurement the outcomes that we've avoided (goods not matching requirements, getting better pricing outcomes, repetitional damage etc) by running a fair and robust process ensures that the business is better off.
On many occasions I've seen my team has moved someone from their initial fixed ideas into better outcomes by taking the time to show them what's possible and what good looks like. Do that enough times, and you have more and more allies in the business to encourage others to use your services.
Check out this article in the IACCM Library, 'Procurement' and 'Purchasing' Are Different:
Having looked at this topic, there is actually already a lot written on the question of the difference between purchasing and procurement. As they observe, for the typical person they are probably the same, but apparently 'the experts' in procurement know the difference! Though once you start reading, there is plenty of contradiction...
When it comes to Supply Management, it is yet another variant and clear as mud whether it is actually different from Procurement. Supply Chain Management is certainly a more holistic activity of which procurement is part, but that's about all you can really deduce.
The net is, these terms are used with a high degree of variability and tend to mean whatever anyone wants them to mean; the only common factor is that they are all associated with the act of buying!
Years ago Procurement and Purchasing were often used interchangeability. These days they have very different meanings. Procurement refers to the end-to-end activities from strategic category management, through to the operational analytics of spend and performance, to the tactical buying and sourcing activities which can happen in-house or in shared services.
As the Procurement function has 'grown up'it has become far more strategic, so although the term Procurement refers to all the activities conducted by the function, it also implies more strategic perspectives. The scope is also overlapping with other related functions like Finance (Accounts Payable as part of the purchase to pay process) and supply chain (Supply Planning, product innovation and supplier performance management). The increasing focus on digital in Procurement is also seeing more collaboration with other functions for example, RPA (Robotic Process Automation) and machine learning, process automation and contract management, and predictive analytics.
Purchasing is clearly the administrative activity of raising a purchase order, managing the goods/service receipt notice and approving to pay. More advanced companies use on-line catalogues to support this along with automated workflow routing and defined delegations of authority. Put simply, Purchasing includes the tactical purchase and approval activities to support buying.
When we speak about supply chain today, we tend to talk about a value chain. Some organizations are now including supply chain and Procurement in one organization given the overlaps, but predominantly they continue to be separate, but related functions.
Supply chain will include demand planning and forecasting, distribution planning, warehousing and logistics, manufacturing (which may also be a separate function), supply planning and often new product development.
Where Procurement gets involved most is in supply planning and supplier performance management, for instance, using contracts to enforce performance, and collaborating with supply chain and marketing for product and service innovation by tracking supply markets and innovations.
Conceptually, the Procurement function has shifted from managing costs to providing value. Using advanced analytics of COGS and SG&A data, digital tools and advanced supplier market research, the function is working far more collaboratively with other functions. As business cadence increases, functions are becoming more linked and lines between which function does what is blurring.
Daniel - I recommend you go for it. However, I have two perspectives on this based on experience; and one personal perspective that underlies my decision to take the same course of action you're contemplating. I worked as a US Federal Contracting Officer for almost ten years - the first seven before I attended/completed law school. Subsequently, I have worked in the private sector including large, global agreements in the IT industry.
Experience perspective 1: Some attorneys and paralegals felt threatened in some manner because I had a law degree. Their perspective is that they are "legal" and I should only be dealing with commercial matters, leaving the "legal" issues to them. I've actually heard some in legal oppose the hiring of Contract Management professionals who also possess a law degree. Finally, I also had at least one manager who apparently felt threatened that subordinates (I and five other Contract Managers) had law degrees from colleges and universities from around the world and had told me that he would not agree to hire an "attorney" for a role I had on my team.
Experience perspective 2: Other attorneys and paralegals I have worked with were more self-confident and not threatened by the fact I had a law degree and was licensed to practice law. Instead, we worked together to leverage my legal knowledge/skills to help manage their time. I would escalate issues and have regular touch-point meeting so that they were informed as to ongoing issues and permit us to collaborate and discuss difficult legal/contractual issues. It also gave me more flexibility to negotiate agreements that protected the legal and business interests of the party I worked for without having to go back to "mommy/daddy" each time an issue arose in the negotiations. At the same time, we also had a working knowledge of the limits of my authority and a good working relationship where I could quickly escalate and propose a solution for them to consider and ask questions about - something we called the "4Cs", ("Communicate, Collaborate, Consult and Crosscheck"). I had learned this from a wonderful attorney who had been the general counsel where I had once worked.
Personal perspective: I decided to go to law school because as a US Government Contracting Officer I had to regularly discuss issues with our attorneys. Not having a sound understanding of the broad areas of the law that applied (not just contracts) sometimes caused me confusion when the attorney would try to explain something - particularly when it ultimately impacted the contract or the enforceability of a provision in the contract. I decided to go to law school to gain a better understanding. It resulted in me have a much deeper understanding of contract principles that must be applied and of the concepts we all rely on (whether or not we realize it) when we draft, negotiate, operationalize and enforce our contracts. I recommend you go for it.
• Neptune Marine Service Pty Ltd
If you can afford the time & cost for the legal degree (LLB or JD)- then will be worth considering that.
From my personal experience, some sort of Commercial/ Contracts/ Business law certifications or diploma will give the required knowledge and upper edge for the jobs.
• AusNet Services
Hi Daniel, I don't believe a law degree is necessary. It depends on the role.
I am legally qualified and I echo Mark's comments. I find that I am better able to articulate the risk I see with my legal friends.
The main thing is do you want to do it? A law degree will give you additional skill such a negotiation etc. It will also give you confidence in the law around contract law, construction, tort and tax.
But a law degree will also give you so much detail on those areas that you won't need all in your role.
• Seeking opportunities
I was also a Commercial Manager at GE for approx. 4 years and with the company 11 years. Since my redundancy just over a year ago, I have been trying to find a like-for-like Commercial Operations function like we had at GE but a number of Commercial Manager roles sit either in the Finance function or the Legal function, not as their own Commercial Operations function.
I'm contemplating doing a Juris Doctor to gain legal qualifications on top of my BBus and MBA Exec as I don't want to go down a CA/CPA path. Otherwise I am exploring the IACCM certification.
Hope it all goes well for you with the decision,
• Itron, Inc.
Depends on how your organization is structured but typically no. In fact there is a good argument that they should not be lawyers as that role has different specialties.
• Omaha Public Power District
Hi. This is an exciting endeavor in organizational design and development ... congratulations. Below are my recommendations, perhaps just to get you started:
1) Identify [or refer] to your Enterprise-wide strategic directives or initiatives (typically, for the next 3-5 years or sometimes longer). Also, identify what is your organization's (1) mission or vision statement and (2) core values. You may also want to look at your annual report to get some sense of your leadership's plan for the next year or so.
2)Once you have 'identified who [you] are as an organization ....' I would then look at the business unit's [that is, your contracts department] very own value proposition that aligns with the organization's vision/mission statement, values, etc. If you do not have this 'cultural' framework in place then I would simply [again] align the contract department's short-term, performance goals (for the year or the next couple of years) with that of your organization's business/strategic goals. (check out www.shrm.org)
3) Remember also that your contract department's short-term, performance goals must be measurable (apply KPI's) and should result in meeting or ultimately contributing to the overall business.
4) You may want to take a deeper dive into your contract department's (i) processes/tools; (ii) systems (technology); (iii) job roles; (iv) critical behaviors/mindset; performance review (skills) -- and assess their impact on or degree of relevance in reaching your contract department's performance goals. (check out IACCM's resource library page)
5) Next, I would look at the purpose of the need for a marketing strategy with emphasis on employee-branding. Ask questions like (i) why the need for this strategy; (ii) why now; and (iii) what are the risks of not changing or implementing this strategy. For example, you want to increase your collaboration with the other business units and enhance Customer Experience (which is typically a strategic directive coming from the top management)
6) Then, I would look at developing a communications plan - identify resources within your company that would be able to support your marketing or 'employee-branding' branding initiative. I focus on employee-branding first because any organization change starts at the employee level. I am applying Prosci's tenet - that is, 'organizations don't change; employees do.' (see also www.prosci.com)
7) When developing a communication plan intended for an enterprise-wide audience, focus on the right audience; with the right message; at the right time; with the right channel; and by the right sender.
Lastly, when looking for benchmark data, I would take into consideration any company-wide survey results (whether aimed at Engagement, Cultural competency, Rewards, Best places to work, etc.) They are valuable indicators on your organization/contract department's current state and what the future state should look like - that challenge is to bridging the gap or managing the transition phase.
I hope this is of help.
Best of luck,
• AusNet Services
Hi I would agree with all that Rose has said and would add, consider you stakeholders needs right now. You may already have a relationship with your stakeholders or your sourcing and/or contract team would have. What do they need? Are they look for innovation in their suppliers? Let them know if you are doing this. Let them know if you are doing social procurement, if that is what they care about. Try not to lead with cost savings that is usually one of the things that are important to your stakeholders but not the key. Are you helping resolve some key problems eg Relationship issues with your supplier, Reliance risk? Key items on my stakeholders agendas are supplier reliance, key man risk with suppliers, innovation project with external vendors.
Hi , You are firstly on the right tract on confirming what your identity is , ( importantly internally and externally ) and what your objective of your branding will be.
The objectives and stakeholder types you want to engage / market yourself to will help you formalise the "storyboard" and messages you want to communicate / transmit.
Inclusive of this you should adopt a variant of human centred design in understanding what your stakeholders want from you and importantly survey the voice of the customer of how they current perceive you.
Once you have this you can then look to design a team brand which not only looks to brand what you want to communicate and advertise but also make it tuned in to what your stakeholders are looking for based upon a gap analysis of where you are currently in branding and where you want to get to.
Good luck on your endeavours, am sure you will make it a success
I´d strongly encourage you to raise this question also within the IACCM technology network, which is a micro-community, where you will be able to get insights to new trends in this specific field and where I am sure you´ll have the opportunity to share ideas regarding the topic you have brought:
Also, please check our library: www.iaccm.com/resources/ where, you will find some articles about 'escrow agreements' for the software arena and other topics associated with risk management in the hardware world as well. By analogy you will explore ideas regarding hardware coming from best practices and escrow programs with the goal of risk mitigation
Hi Michelle - saw your post. For hardware: having a refresh plan with your supplier following a bit of a mutual benchmark, to see how best to provision for your upcoming capacity needs, might give some assurance. For services or subscriptions-based tech: having a documented 'cookbook' of key players and tech needed to recreate the service, including a list of any solutions 'not commercially available' or not easily re-purchased in Canada updated, might also be helpful to gage the difficulty of transitioning off your current tech,if needs be.
Those two governance-type processes, along with the typical supplier obligation to reasonably cooperate with any successor and to provide some mutually-agreed orderly termination assistance, might serve you well (outside escrow for software). Hope that offers some ideas...good luck. Cheers, Robin
• Australian Red Cross Blood Service
CCM needs to be far more multidisciplinary than the traditional finance function which was focused on the bottom line.
Strategy, risk, compliance, technology, legal, safety, communications, marketing all being amongst the skills that CCM professionals need to develop and maintain.
I would go into the conversation with the CEO asking what it is that the CEO wants greater transparency over and then demonstrate how this can be achieved by leveraging the CCM role out from under finance.
• Self employed
Its fast becoming established in many (albeit usually larger) companies to have CCM as its own function reporting direct into CEO/MD, so you can say you're following best practice. To echo your comment, this recognises the independence and increasing importance of the function and ensures CCM has equal voice.
CCM under Finance is a bit of an anachronism, however try to ensure there's no implied criticism of your CFO in this move...ideally get them to support the change?
In addition to particular responses from other members who may have noticed such a potential decline in remuneration, if any, I would encourage the poster of this forum entry to regularly check IACCM annual salary review. Please refer to our IACCM library, by clicking on www.iaccm.com/resources/contract-management-resources/
While standardization may be a noble ambition, achieving it is usually quite difficult. You can improve your odds through the use of mutual NDAs that protect the confidential information of both parties and by having fair and balanced agreements, but expecting all suppliers to sign them as-is may be expecting too much.
Your role is to understand their requested changes and to determine the impact to your company and whether the changes are acceptable, and to advise your internal client accordingly.
Hope that helps. Sincere regards.
Consider whether you might be able to use a "standard" and have each negotiated difference stand out as a specific change. There are a number of ways to do this. The most systematic would be to use a master and generate each of the documents from the master, with a patch for the differences. That's possible in a number of technologies. A broad example is shown here: www.commonaccord.org/index.php
• Tata Communications
We have standard NDA template and additional clauses in the clause library if the vendor pushes for Mutual NDA. This helps build the agility in NDA execution. My experience says that we are able to push 80% cases on standard NDA template and the balance needs engagement.
If a NDA is well drafted, clear, fair and equitable then it should be signed without issue.
If the client has specific requirements that are reasonable and equitable they should be acceptable to all parties.
If there is an element of inequity or unreasonableness then expect suppliers to push back. The simplest test is "would I sign this on behalf of my organisation": if not, then why expect the other party to sign?
What could be up for discussion: whether the NDA is one-way or mutual? what law and jurisdiction apply? the length/duration of the NDA and of any surviving obligations? whether personal NDAs/statements are required?
I would have concerns if I have received unacceptable terms in an NDA - it wouldn't bode well for any subsequent contract discussions negotiations.
• Health Quest
In my organization we use a Mutual Non-Disclosure and Confidentiality Agreement. I can see where there may be a need for specifics to be outlines, and in that event, I would consider an addendum as a sufficient protocol. The addendum can include the customer specifics that would otherwise present as "sticking points" that tie up getting the project off the ground.
Also please consider our IACCM 10 pitfalls report, from which you will learn, among other findings, that each year, the speed of change increase, yet more than 80% of trading relationships remain traditional in their terms and structure. As a result, organizations are not effective in anticipating or enabling change and operational teams lack tools for managing perfomance (pitfall number 6).
Finally, as you have taken IACCM certification, please take a look at the learning module 'CCMP Contract Change Management' in our learning site.
Hope this helps and that other forum users can bring you more data. Anyway, I will get back to you via email. Gracie,
Everything clear! Thank you very much Pablo, let's keep in contact, Regards Valentina.