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Articles in category: Contract Management
Without contract lifecycle management (CLM) in the modern business world, numerous things can go wrong, including missed savings opportunities, heavy fines, costly litigation and broken relationships. Generally, CLM is the ability to ensure contractual obligations are met.(Read Full Article)
Welcome to the first article in a five-part series that will focus on how procurement, finance, and other professionals effectively build a “compliance management” checklist that addresses multiple avenues of spend management and the compliance ramifications behind strategic spend categories. The first four articles will highlight the dozen items that should be included in an [...](Read Full Article)
IASTA, a leading global provider of strategic sourcing and spend-management solutions, has entered into a partnership with Bespoke Sourcing Solutions, a South African-based procurement and supply chain management advisory and knowledge development provider.(Read Full Article)
During the last year, the approach to negotiation has visibly started to change, with a growing number of executives pushing a more collaborative or partnering approach to their supply relationships. This is beginning to edge out the tendency to practice negotiation as a zero sum game, with success for one party happening at the expense of the other.(Read Full Article)
The National Treasury is set to roll out electronic procurement in July this year as part of efforts to automate and streamline Government financial management processes and procedures.(Read Full Article)
“Negotiation has, for decades, been viewed as a zero-sum game, with the success for one party being at the expense of the other.”
Tim states in the article that the market trends are changing towards more collaborative and sustainable supplier relationships. Bottom line preassure, a shift in the purchase of direct materials and products moving towards a growing volume of services and solutions as well as the need for greater efficiency, speed and improved business judgment. Getting the lowest price although not ...(Read Full Article)
Contract lifecycle management looks so easy when you see the solution provider’s demo. Meanwhile back in the corporate jungle, your contracts are negotiated and executed on other companies’ paper, amended in emails, with final versions left sitting as hard copies in file cabinets, and then you probably have acquired a plethora of group companies with dubious contracting histories. Technically speaking, you should also be concerned with sell-side contracts. What is the risk exposure?(Read Full Article)
The majority of the businesses were based in Asia, with two in the Americas region, and one in EMEA.
“We work closely with our suppliers to help them improve their performance. However, where we face situations of severe or repeat non-compliance we can and do terminate business relationship with suppliers,” the report said. “In 2013, we terminated agreements with nine suppliers for compliance reasons."(Read Full Article)
Have your supplier relationships gone flat? Has the initial excitement fizzled out? 10 experts share their top tips to put the spark back into your partnerships.
Picture the scene: With the ink not yet dry on the contract, the enthusiastic purchaser and eager, hungry supplier get ready to celebrate the start of a burgeoning relationship. What could possibly go wrong? But leap forward a few years, and all is not well. Targets have been missed, innovation has stalled, and there’s an atmosphere of distrust between the two parties.
Sometimes, relationships with suppliers simply need freshening up, often as a ...(Read Full Article)
Managing expectations, focusing on outcomes, a proactive approach, and getting the key information from suppliers can help achieve better outcomes in contract management.
At the Procurex South conference in London yesterday, Paul Mallory, vice president of professional development at IACCM, the International Association for Contract and Commercial Management outlined his top tips.
• Expectation management. “We need realism in the process,” said Mallory. “No one wants to talk about the nasty stuff like what if something goes wrong, but you need to consider these things in order to put mechanisms in place.”(Read Full Article)
Procurement is not officially in charge of quality control in most manufacturing companies. Still, when a supplier - whether a contractor or a parts supplier - falls down on the job, that’s certainly something for procurement to address
In the last several months, there have been numerous reports in the media about problems with parts or workmanship on products ranging from aircraft to electronic components to public infrastructure.
Despite having formal procurement processes, some organizations have staff members who engage in maverick purchasing—circumventing standard procedures to procure items individually. According to APQC’s Open Standards Benchmarking in procurement, bottom-performing organizations have maverick purchasing worth 10 percent or more of their total annual procurement value. For top-performing organizations, maverick purchasing represents only 0.24 percent of their total annual procurement value.(Read Full Article)
In 89% of major corporations, contract and commercial management are gaining increased focus and importance as strategic enablers of the business. This was the topic that Rigard Geyser, Southern Africa Representative of The International Association for Contract & Commercial Management (IACCM), expanded on in his Keynote Address at the recent 3rd Annual Contract Management Seminar + Workshop 2013 held in Johannesburg.(Read Full Article)
An average of 30 to 35 per cent of a firm’s contracts are “not fit for purpose” because of a lack of correct goals and responsibility from the parties. That’s the finding from new joint research by the International Association for Contract & Commercial Management (IACCM) and the National Audit Office. The results were revealed at the Scottish Government’s ninth National Public Procurement Conference in Glasgow on Tuesday.
However, respondents to the survey were clear on what they wanted from a contract. They noted that it is very important for a contract to define “clear mutually understood objectives ...(Read Full Article)
Contract management sometimes gets short shrift in discussions of where procurement adds value. It’s assumed by many in an organization - including, unfortunately, some in the procurement function - that reducing to writing the results of a negotiation on pricing, terms, conditions, product or service delivery, and other details is enough, that once officially encapsulated in a formal contract document all details are settled and things will proceed from there smoothly.
In a 2012 survey of its members, the International Association for Contract & Commercial Management (IACCM) identified that the average cost of poor contracting is 9.2% of a firm’s annual revenue. For large, capital project industries such as oil and gas it is even higher – almost 15%.(Read Full Article)
-->What is success in contracting? To answer that question, we need to remember that not all relationships are alike, or of equal importance, and we should treat each in a way that is appropriate to its degree of criticality to our business and organisation.(Read Full Article)
Think locking in long contracts in anticipation of rising prices makes logical sense? You might be in the minority. Procurement Leaders is about to publish its Category Planning Guide, which overviews all indirect categories in 2014. Interestingly, we find that the higher the expected price, the shorter the contracts.
Contract compliance is the ability of an organisation to insure purchase order detail accurately reflects the terms and conditions as are found in the contract detail of long term agreements (LTA’s). The reasons for entering into LTA’s with suppliers are many. LTA’s are often used for securing supply of a scarce resource from a supplier. LTA’s are also used to group a large number of common items (Commodity/Category) together to obtain purchasing leverage and thereby obtain preferential pricing over the term of the contract. LTA also facilitate closer and more stable relationships within the supply ...(Read Full Article)
The 2011 BC case of Metercor Inc. v. Kamloops shows a different way for a disgruntled bidder to challenge a procurement decision that has gone against them. In this case, the City of Kamloops issued a request for proposals for the installation of water meters.
The unsuccessful proponent (CMI) brought an action for judicial review of the City's decision to enter into negotiations with the successful proponent (Neptune). The RFP set out a two-stage evaluation process. Proposals were first scored for their technical merits and only those proposals that scored at least 75% on this basis (56.25 marks ...(Read Full Article)
The brewer undertook the integration of a new solution following the launch of a strategic initiative to reduce supply cost volatility caused by price fluctuations in commodities such as barley, wheat, maize, diesel fuel, natural gas, bunker fuel, and aluminium. The solution, developed by Triple Point Technology, Commodity XL Strategic Planning and Procurement (SPP), was selected by the brewer, the company has stated, because of its ability to provide real-time scenario analysis to reduce commodity price risk, decrease overall commodity expenditure and because it can be integrated with SAP financial, logistics, inventory, and invoicing solutions.(Read Full Article)
I wonder how many of you have come across Glassdoor; a website where potential employees can identify a particular organisation, the typical salaries paid to their varying levels of staff, what questions were asked in interviews, others experience of the recruitment process and what those who were successful in the selection process subsequently thought about working for the organisation. Some really interesting insights and all free of charge.(Read Full Article)
The rise in contract management and the outsourcing of goods and services has created an increase in procurement fraud. Here are 12 red flags that can help you save millions.
Repeated awards to the same entity, Competitive bidder complaints and protests.......................
A common failing in many organizations is the lack of a clear senior owner for contract management, often true at both the individual contract level and across the overall picture. It is a truism that initiatives and activities rarely succeed without senior sponsorship and ownership, and that is as relevant here as in any other business area.
And in terms of contract management, if the CPO does not own it, who will? Usually the answer is nobody. The legal department or general counsel may have an interest, but in our experience they only get really interested in the latter stages ...(Read Full Article)