Anyone handling contracts on a regular basis understands that managing stakeholders is one of the biggest challenges. Contracts touch and affect many people within and outside an organization, but in quite different ways. Some view themselves as owners, others as users and still more as reviewers or approvers. And then there are those who may simply be affected in some way by the aims or purpose of the contract.
When you face such a broad array of people or functional interests, a well-defined and managed workflow is essential. Without it, risks are increased and quality and efficiency decline.
The problem facing many organizations is that the volume of stakeholders continues to increase. Factors such as growing professional specialism, increasing regulation and greater concern over reputational risk mean that cycle times are lengthening and internal productivity levels are under threat. In a competitive global market, these are not acceptable developments – so the choice becomes either to cut corners and take risks, or to define workflow and introduce effective management systems.
Workflow was the subject of a webinar that IACCM undertook recently with software provider Selectica. You can watch the webinar on demand, HERE. In the program, we reviewed some of the benchmark data that reveals a growing divide between the best and worst industry performers. For example, cycle times for contract negotiation vary by more than 300%. The volume of contracts handled by an individual contract manager shows an even wider difference. The overall resources administering contracts are also affected – and the best performers are freeing resources to undertake added-value and differentiating activities such as competitive research and data analytics.
In many ways “workflow” is just another word for “process” – or is at least a by-product of it. The problem for many organizations is that they still have not adequately defined their contracting process. It remains a set of unconnected activities, lacking clear ownership or accountability. This means that value is lost and risk increases – but these weaknesses are missed because, without a monitored process and supporting systems, the problems and their consequences remain invisible.
* This post is republished courtesy of IACCM. Read the original blog and other articles by Tim Cummins, HERE.