• 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 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
• 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?
I'm in a similar situation. Last year, I was given a new position that had never been handled before. All of the spend had been previously managed by different departments and associates within those departments. It's hard to talk people into giving over power that they've always had. I decided to approach it one bite at a time.
Find someone willing to let me help but don't push. Tell them you're free help and you just want to help make their lives easier. Once you can get a couple wins under your belt, more and more people will be willing to let you help them.
Hope this helps.
It´s a good point the one you have raised, and I am happy to read from our colleague who is in a similar situation as the one you have described.
He has recommended to find someone willing to help, without pushing and being available to make their jobs easier.
And I personally believe this is one of the responses to your point: we need to generate the certainty that Contract Management really matters and, according to IACCM findings and experience, create in Top Management the said awareness. Many IACCM corporate members have already succesfully proceeded like this!
I can bring some articles posted in our IACCM library which might me helpful, such as Kate Rodriguez' 'Top CEO Describe their perfect employee' (www.iaccm.com/resources/ or the article from Wharton School of Management in response to the question 'What makes team work effectively?' (www.iaccm.com/resources/ and/or this post in our IACCM library related to 'How the top innovators keep winning' (www.iaccm.com/resources/.
However, I believe that the way to convince Top Management and other stakeholders of the contracing process so that 'business does no longer say NO' as you described, is by following the key messages resulting from Tim Cummins and Sally Hughes´remarks in our IACCM Americas conference 2016 (now that our 2017 conference in Toronto is around the corner):
Tim and Sally confirmed the speed with which contract and commercial management are transforming as business disciplines and in the value they are providing. Refer to this entry where you will find some ideas, examples and case studies regarding the critical importance of contracts in the business, taken by Tim and Sally after the conference: www.iaccm.com/resources/;
Hope this helps and feel free to connect with me! Best regards,
I feel your pain. i am the first Commercial Manager at my company having come from a major prime. The difference for me is that i had support from my CEO to develop a Culture of Commerciality. Therein i Think lies the "secret sauce" - to develop a champion at the C suite level. You are on the right track by getting involved and just being helpful. When they work out that you can save them work then even engineers will come around!
Also good to remember you are there for a marathon not a sprint. It can be frustrating with some old die hards but stay at it.
just so you know i am the Community Lead for the Small Business and Start Up Group where other members face similar issues. Even thought you are from a large company you would be welcome join and see if others can assist.
Finally i am speaking at the IACCM Australian conference in a week on Developing a Culture of Commerciality. if you can't attend you can get the paper from the website.
Otherwise if you just want to chew the fat please feel free to contact me .
Good Luck and you will get there.
Reads like the job description in my last three jobs. One of my bosses told me a few years ago that Contract Management has a PR problem. We get a lot of nods along they way but ultimately, revenue focus trumps everything else. And don't get me started on what the Sales reps throw over the fence for others to deal with. Sometimes, one needs to move on, which could mean: seek other opportunities.
'Contracts Engineer' is quite well established as a title in many parts of the world and in more project/ engineering industries. 'Certified Contract Engineers' could be an option if you are aiming for IACCM certification - indeed, we could even make this a formal sub-group and run some webinars and other programs specifically for it.
• UK Government
Thank you, within our Virtual teams they are called "Relationship Managers" as they deal with both the Business Engagement/Demand as well as the Supplier Capability/Capacity/Performance. However our Commercial colleagues are concerned as they see Supplier Relationship as a skill/role that is part of their CIPS Profession and would rather we avoided this label although ultimately that is what the Engineers within the team do.
"Contracts Engineers" could work, although it does feel more of a Commercial label, are you aware of any organisations that use the term "Relationship Managers" or "Relationship Engineers" ??