Leveraging contract management in the “R” period
In this dynamic and challenging global environment termed also as “Recession”, I read a series of blogs
- on ways to manage recession,
- worst innovations mistakes in recession,
- Is re-negotiating during these tough times ethical?
- “R” word can be a boom to sourcing and procurement world etc (http://www.supplyexcellence.com/blog/2008/10/30/renegotiate-contracts-recession/, http://blog.sourcinginnovation.com/2008/02/25/the-10-worst-innovation-mistakes-in-a-recession.aspx)
The “R” word is probably not a welcome term for sourcing and procurement world – buyer as well as supplier, but it will definitely help in restructuring most of the processes. Contracts Management (with sourcing on the left side) plays a vital role in achieving this – Compliance, Collaboration, Commitment etc
To start with, you will have to focus on COMPLIANCE to make sure that you are not getting overcharged and not overpaying. To achieve this, organizations will have to move towards reducing their maverick spends. Contracts will help in achieving this goal. Leveraging contracts during the “R” period will benefit both buying as well as selling party meet their commitment.
Second measure is to COLLABORATE and be transparent with internal buying community as well as external suppliers. In one of my blog comments (http://blog.procurementleaders.com/procurement-blog/2008/7/21/suppliers-strike-back-as-big-boys-stick-boot-in.html), I had talked about having tiered payment terms as an option in difficult times and this can be achieved purely with transparency and collaboration. Contracts play a very important role in managing this.
Apart from compliance, collaboration and commitment - globalization, re-sourcing, re-negotiation and innovation will continue to be the focus areas in procurement world and Contracts can help these initiatives see light. I was reading on one of the focus or theme of Emptoris Empower 2008 Conference – “forward thinkers driving greater results in supply and contract management”. The timing is just right and organizations trying to fight against the recession are all forward thinkers.
Comments
What is your view on Contract Management Solution providers such as Zycus, Capterra, Procuri, Selectica etc & their intense competitive market share & value proposition?
Posted by: Julia | March 5, 2009 10:03 AM