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4 million contract management jobs at risk

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management | Feb 15, 2019 7:42:00 AM

I was startled to learn recently that there are 6.5 million people on LinkedIn who identify themselves as Contract Managers. That’s a remarkable number.

Of those 6.5 million, less than 150,000 are members of a directly related professional association and less than 75,000 have formal training and certification – so that equates to slightly more than 1% of those who say they are performing this as a job.

Little wonder, then, that the contracting process is seen by many as inefficient and that such a high percentage of contracts underperform. People simply aren’t being equipped with the professional knowledge and methods that are needed to deliver value, resulting in an approach that is typically reactive to problems and issues.

The impact of automation

Reactive processes are by their nature inefficient, driving unsustainable resource costs. The unskilled nature of many contract management jobs indicates the scale of opportunity for improvement – and emerging technologies are slowly starting to drive those improvements. For example, I recently gained access to benchmark data showing an average reduction in resourcing of 60% – hence the number of 4 million disappearing jobs in this article’s headline.

However, this isn’t the complete story. There are two further key points I’d like to make:

  1. The technology impact depends on what technology is deployed. Most organizations have heritage systems (or heritage attitudes to systems) that are standing in the way of driving more efficient (and more effective) contracting.
  2. Modern contracting can play a transformational role in business performance, equipping management with invaluable data and market insights. But achieving this requires holistic process change and, while it eliminates a high volume of inefficient resource, it generates a number of additional roles – for example, in improved market analysis and engagement, in greater opportunity management and contract growth. These new roles are much higher paid and also require supporting systems, meaning that the overall cost reduction is likely to be 30-40%.

For anyone who is among those 6.5 million that doesn’t have up-to-date, relevant qualifications, it’s definitely time to think about your future.

Topics: contract /commercial management

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