Category Archives: Contract Management
After signing a contract, both parties have to protect their own business and value case while they work to achieve a common objective, contractual milestones and specific deliverables. No matter how sound a contract is, what matters in real life is relationship management. Consider the following Top 5 golden rules to avoid pitfalls and create a successful relationship with your service providers … in real life. 1. Success comes from collaboration. Mirror your project model with the service provider’s organization … More
Despite the challenging circumstances of today’s economic environment, you must embrace change in order to support shifting external environments and business strategies. At the same time, you look for opportunities to capitalize on disruptive changes in supply markets, which can drive greater value for your organization. You must become a purchasing hero. What is a purchasing hero? We believe a purchasing hero brings knowledge capital to multiple departments. They inspire collaboration and cross-coordinate with as many internal stakeholders as possible. … More
Contract management is an important aspect of managing supplier relationships and ensuring that commodities and services are negotiated at the right time. Unfortunately contracts are often managed poorly within a company. Even a smaller company can have hundreds of active agreements, adding up to thousands of contract terms and clauses. As you may know, not one of those contract terms carries much weight if the agreement isn’t monitored and enforced. Procurement Managers know that getting a fair price on goods … More
It never ceases to amaze me that during harsher economic times, organizations choose to reduce/cancel budgets for procurement projects. It is understandable for those functions that are more client-facing, where revenues are challenged, but why the procurement budget? A $/€/£ saved is a $/€/£ more profit – there are no cost of goods/services to be charged. Organizations need all the help they can get at the moment and where better to turn to than procurement? It would be understandable if … More
This is the third post in our 10 part series. Click here to read Part 1 and Part 2. In a recent Webcast, Spend Matters proposed the third way to enhance procurement’s impact on the organization’s bottom line is to go beyond the contracting basics. Jason Busch highlighted a few advanced contracting philosophies including: Pursue an active compliance approach that leverages internal systems and marketplace information (e.g., commodity pricing trends, currency rates) Build your contract management system as a repository … More
Procurement professionals like you have indicated two main roadblocks hindering them from becoming a best in class procurement organization include: 41% a lack of culture that accepts procurement as strategic 38% a lack of technology to automate the strategic sourcing process Join us for a Webcast on May 2 at 11 AM EST, “10 Ways to Drive Procurement Influence Using Advanced Technology.” Jason Busch from Spend Matters and Joanna Martinez from Cushman & Wakefield will discuss tips on how you can … More
People, process and technology are the core of developing a Center of Excellence, which is the fourth tactic to achieving sourcing credibility. People: Does your team help create the IQ of the organization? • Conduct training to fill in the gaps and implement sourcing best practices to build the “nerve center” for a best-in-class process. Process: Do you have processes in place to build the organization disciple for evolutionary cycles that generate greater spend under management? • Evaluate and map current processes. … More
Whether you are an early stage or mature sourcing organization, it’s important to manage gaps frequently, which is the third tactic to achieving sourcing credibility. We have identified 5 gaps sourcing and procurement teams should manage: 1. Skills gap- align people that possess the appropriate skills in right positions. Make sure the best-fit subject matter experts are working with the right internal customers so everyone is on the same page. Get outside help when needed, but make sure you can identify … More
By Cynthia Batty, Global Competency Lead, Service Management, TPI In this economically challenging time, I’m finding that my clients’ service delivery managers are on the front lines having difficult discussions. Their companies are asking for base services from their service providers to be maintained, often with smaller overall services budgets than before the recession hit. These reduced budgets make conversations with service providers painful and become a challenge at the service delivery level when providers simply refuse to deliver the … More
The current economic downturn has transformed a number of industries from sellers’ to buyers’ markets. Corrugated is the poster child. Now is the time to lock in favorable pricing. But be wise as you contract. Those who are short-sighted may suffer the consequences as the market fluctuates, as it inevitably will. Early last fall, corrugated buyers were lamenting an impending price hike. After acquiring Weyerhaeuser in August, International Paper announced a record high linerboard price hike effective October 1. According … More
Contract Management, which can be defined as the execution and monitoring of a contract for the purpose of maximizing financial and operational performance and minimizing risks, involves tracking purchases against contracts to insure preferred suppliers are used, rates adhered to, and discounts and rebates collected. Contract Management is important, because, as mundane as it sounds, it is another part of the sourcing process that can bring a number of benefits to the organization. Standardized Processes and Procedures This helps to … More
It has been a very long time since I wrote a summary of what is going on, over on the ESF sister site – eSourcingWiki. Since many are now taking long weekends, or full holiday right now, today is a good time to bring attention to what exactly is going on over there. The wiki series are broken into 4 main categories: The Basics, The Technologies, The Methodologies, Global Sourcing Primers. Within each header category, there are numerous papers on … More
I took part in a webcast this week entitled “Bringing Contract Management into the 21st Century – 5 Principles Every Procurement Executive Should Know” sponsored by Procurement Leaders. It is quite clear that Contract Management is starting to add real value to companies. Problem is, too many are still stuck in old practices that result in a lack of visibility, control and inability to manage compliance. I thought it would be worthwhile to highlight some of the key takeaways from … More
I am a little late getting to this report from AMR, which is reserved for members only (although SCDigest did provide a little insight, as did Spend Matters). High level take aways stated that supply management technology is a key enabler for value chain success, reflected by an anticipated 14.5% increase in spending in 2008. Cost savings and procurement efficiency are two of the primary goals desired by purchasing respondents, and also, it was noted that the spend visibility and … More
(caused by NAFTA), was just supplemented by a new acquisition close to the border in Austin, TX. (I know, the money isn’t going to Mexico, but it was the best I could come up with). Last week, while all the noise about Procuri was at full throttle, Nextance went out and made one of my direct predictions golden! I am not sure what to make of the acquisition, since it is not even mentioned on the company websites. Is it … More
