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,
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.
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" ??
The performance of the Contract Manager role and the performance of the Contract Management Process in general is one of our key points in each one of our recent IACCM anual conferences and networking events, as the matter takes us to the question: "How should we measure and demonstrate success?"
Indeed, while transactional performance is clearly important, it rarely offers the insights that we need, if we are to raise our status and our contribution.
Our thinking and our measurements must start to focus on driving benefits at a portfolio level and relate directly to achieving the strategic goals of our business.
Value will be delivered through a process based view, through monitoring the outcomes of what we do, through generating measured innovation and continuous improvement.
This depends upon capturing and analysing performance data, through challenging established rules and procedures, through inspiring the new models and approaches we have discussed this week. And it also depends on courage - developing leadership and influencing skills.
Keep in mind one of IACCM survey findings: 'Contract Management is one of the least automated processes... and this results in inefficiency and weaknesses in PERFORMANCE oversight, as well as in the absence of management reporting and information'. Here we value the importance of Contract Management Automation and that´s why we are focused on this topic in recent Ask the Expert sessions and in our future events (Australasia and The Americas conferences).
Dear David, have you thought about listing out every task that contact managers are responsible for in your corporation then, assigning a numerical value to each task. Then, assigning a score to each task to analyse and create a quantified report on your overall contract management performance?
e.g. you mentioned governance, negotiation, change process as a few of the tasks. Perhaps you could write these tasks in a spreadsheet and assign values like so:
You could average each of the score values and weigh it against how important each of the tasks are (based on their numerical value). From a high level point of view, based on these numbers, you could create a percentage of "contract management performance efficiency" per quarter/month/week/day for each of your contract managers.
This is just one idea. As full disclosure, I work with a contract management software vendor where we help our clients effectively manage their contracts online. We don't have this particular feature built out on our software yet, but would be open to discussing further and building it our for you in our Analytics & Reporting function, if you'd be interested.
Feel free to contact me directly at firstname.lastname@example.org
Hope the above ideas help!
• Academy Sports + Outdoors
The less standardization you have on your services the greater the difficulty will be in establishing useful performance metrics that span your portfolio. For example, a BPO contract or a customer IT services agreement will have many specific considerations that can lengthen the time of negotiation and result in contracts that vary substantially from other contracts in the same portfolio.
Hi Ingrid! This is certainly an interesting topic we could be handling and covering in our Community of Interest (Small businesses and start ups) where situations and scenarios like the one you described take place very often. In our IACCM library we have been reading articles about challenges of small / under-resourced contracting organisations or teams, such as this: www.iaccm.com/resources/;
Apart from listening to other views in this forum, I´d definitely recommend to include this subject in our future CoI call with you and Robert Bradshaw. Thank you!
Ingrid, the problem you mention isn't limited to small business. Many large corporations suffer from a similar quarter-end 'banana curve'.
One approach is of course to review the demands from the perspective of groups or patterns. For example, how much is unique and how much is repetitive? Look at each of the repetitive issues and consider whether you could handle it differently - perhaps preparing materials in advance or empowering Sales with some standard materials they can use, or educating them (in one of the quiet periods).
Picking up on Pablo's point, I know some members who have tackled this problem and perhaps we can get them to do a webinar that discusses their solutions.
• Inaccord AG
Sorry, Pablo, I tried twice to post in the SMB group, but can't explain why my post ended up here.
Tim, I agree with your suggestion to identify patterns in the work and come up with approaches that use templates and adapting processes to offload the contracts team. While a large organisation may share some of the challenges of an SMB, it will have advantages, such as the ability to enforce its standard terms, established processes which can be built upon, and possibly funding to bring in short-term resources to handle peaks. I would like to start a discussion about these challenges and how different companies deal with them. A webinar sounds like a great place to start. Thank you.
Be sure to check out the Thought Leadership Webinar - IACCM's 2015 Benchmarking Study Results
...and also the 2015 benchmark report available since 2016 in the resource library. IACCM will be conducting a refresh of the research in 2017 (typically every 2 years).
Without jumping into specific company names, I would strongly recommend to analyse IACCM Benchmark Report, www.iaccm.com/resources/, in addition to our regular Talent Survey findings (please refer to IACCM library), without disregarding this blog written by Tim Cummins on "Commitment Matters":
How many Contract Managers do you need?
Author: Tim Cummins
It is planning season so I am increasingly being asked for data to support headcount and resource estimates. The question of how many contract managers do you need applies to both contract management and commercial management and for organizations large and small.
As IACCM benchmarks have consistently shown, the answers on headcount and budget are highly variable, but driven by a range of broadly consistent factors. These include obvious considerations such as the scope of the role being performed, the extent of use of offshore / outsourced resources and the relative complexity of the underlying workload.
There is extensive variation in how contract management is performed and this is reflected in the visible level of cost. Even where there are dedicated resources, the average cost ranges from approximately 0.1% of revenue to 0.7% of revenue. Often, the identifiable resources are just the tip of the iceberg - and in some cases, the iceberg is completely concealed. For example, in a study recently conducted by IACCM, we discovered one company where contract management was costing $30 million in legal resources alone, representing almost 30% of the average lawyer's workload. In another, the role was performed entirely within business units at an estimated cost of more than $200 million.
As identified in the IACCM 2015 Benchmark Report, dedicated contract management resources generate significant efficiencies and cost reduction. But the picture is no longer simple because the nature of those resources is changing fast. In the past, contract management would be performed by a dedicated business function or professional group and the activity depended on people. Today, as we work with organizations on their forward plan, the nature of the skills required is shifting and the extent of automation is growing. The contract management function is poised for major changes which will also transform the value it can provide to the business.
Please refer to commitmentmatters.com/2016/11/01/how-many-contract-managers-do-you-need/ Hope this helps, Kirstie,
• Oracle Corporation
Mark and Pablo, I've taken a look at the Benchmark Report, and I have a question.
On page 16, where you ask "What volume of contracts / negotiations you feel it is reasonable for one professional to be handling at any one time?" what does this metric represent? Is that total matters assigned a professional at any given time, or does this represent the number of matters that an analyst works on/touches in a day/week/month?
• Resolute Corporate Services Pty Ltd As Agent for Société Des Mines de Syama S.A (SOMISY S.A)
Ideally, they should be separated but they must work closely together.For small organizations they are combined and for larger ones they are separated,if their finances can afford.
Contract team should negotiate the procurement policies and then pass the ball to procurement and purchasing teams.
It makes for a tidy process for the Contract team to be separate from the Procurement team for the simple reason of avoidance of a conflict of interest. Combining both roles as a purchaser and the reviewer may present operational difficulties. Your role is critical in ensuring that best practices have been applied in the review of contractual obligations by both parties
Obiageli - there is an increasing tendency for Contract Management, or in some enterprises it is known as Commercial Management, to handle both buy- and sell-side operational roles. There is still a significant portion of organizations, however, that segregate the roles into traditional buy-side and sell-side functions. So, unfortunately, the answer is that this is an area undergoing transformation and an area where many paradigms are being broken. Those who successfully undergo this transformation have undertaken significant review of larger strategic goals and existing competencies - leading to the decision after suitable analysis.
IACCM has conducted a lot of research in this area and much of the resulting analysis and underlying data exist in the IACCM Library.