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!
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
The governance and framework for outsourcing service on-boarding and general service contractor on-boarding would be largely applicable here. The key here is that the SOW's, SLA's and KPI's are clear and complete - but that holds true in any services contract. From what I have seen, SIAM principles are highly relevant here.
Governance framework for vendor management should be standard, however, level of engagement to manage a vendor varies depending on type of contract and value of spend.
I would recommend at minimum to onboard vendor onto these governance framework discipline:
Risk and Compliance
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.
Have you seen the discussion thread started by Andrew McIntosh on 4 July, which is five threads below? There were responses by Mark Filer and Jim Pearson, which provide insights which might be of value to you.
Surrey and Sussex county councils
Hi Keith, this is a very interesting question and I am glad you are undertaking the exercise.
I haven't come across a dynamic tool that would support the sort of pre-analysis you suggest, although it may be that you could adapt one of the systems used by marketing to undertake customer segmentation. Another approach could be to build relevant questions into whatever requirement definition tools you use, cuasing the business to consider the points you make regarding issues such as innovation, likelihood of change etc
In working with another IACCM member, we have developed a model that looks at three core levels of relationship and then overlays the extent to which there is potential uncertainty which would impact the nature of the relationship / terms required. I'll be pleased to discuss with you and share ideas..
Hi Keith. I'm also unaware of the existence of such tools.
My suggestion (assuming you haven't done so already) is to align your organisational objectives with the business cases, service specifications that were developed during the tender process, justifications for contract variations, etc. Once this has been done, identify the commonalities across the service spectrum and then compare against the performance of each contractual arrangement including the extent to which the service is being successfully delivered and then how this may relate to the business activities of the individual business unit. No mean task!
Understanding contract management within broader organisational strategy and commonality that exists between contracts is likely to yield insights into what you're trying to achieve e.g. innovation, appropriately skilled staff, etc. And by taking such an approach, it may increase the likelihood that decision-makers outside of your own business unit who may also benefit from this work will support your efforts more readily.
You may also find as a result of using this type of analysis, the requirement for knowing whether the relationship is growing, etc becomes less relevant as an end in itself - assuming of course that the appropriate aspects of organisational strategy are being delivered as intended through its contractual arrangements and that risk appetite for further value / profit-seeking under each or multiple contract(s) is not being exceeded, and is being properly managed.
It´s great to hear that organizations like the one you´re working for as Senior Contracting executive are undertaking this type of exercises in order to gather information around best practices in contract, supplier and performance management.
As the unique global organization identifing best practices in this area, at the IACCM we will be happy to assist enabling other members to share what they have been applying in their respective organizations and, furnished with the results and findings of this networking atmosphere, you will be achieving our goals at Philips 66.
Behind 'best practice' is a simple concept: measurable standards. And that means some form of benchmark is required. So, the exercise proposed in your posting, Alan, is a great example. It will be a comparison against peers, organizations at the same level, in order to get standards and then, you will see how you and others do things and what you and they do.
I know that your company has invested in the developement of contracting skills among your CM staff, and most of your colleagues are currently taking the CCM (Contract and Commercial Management) learning program, in its different certification levels (practitioner, advanced practitioner). At this point, it will be extremely important to consider what IACCM states in module 1 ('Best practices in contracting'), so I'd extremely recommend to review that content, at first sight.
Second, in this link you will find the 'IACCM top ten best practices in contracting' (general): www.iaccm.com/resources/;
Among other relevant resouces provided by IACCM corporate membership, as you might be aware, you have the right to get access to ATEs (webinars) via our IACCM library in subjects such as 'best practices selecting the right supplier': www.iaccm.com/resources/;
In addition, refer to 'Supplier relatioship management: best practices'
In sum, over the past several years, supplier relationship management (SRM) has become a major focus within the procurement and supply chain community and many companies are analyzing how best to expand SRM efforts and investment. We look forward to hearing from other members.
• Seal Software
At Seal Software, we can provide you with a technology which locates, understand and extracts data from your contracts. This can help you with supplier and performance management by:
- Extracting information from your contracts, such as the parties to contracts, and their obligations.
- Maximizing revenue opportunities, by identifying unknown business intelligence.
It would be great to discuss how Seal can help you, in more detail. Please feel free to call me on +4420 735 9892.
We are revamping as well this year and I attended a training from State of Flux in Chicago a couple of weeks ago. I found there approach on planning very particle. For me it is very situation on how you manage your supply base hwoever keys are
1) Outlining performance expectations
2) Holding regular reviews
3) awarding business based on performance