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Bridge or barrier?

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management | Aug 15, 2019 10:46:53 AM

It is widely recognised that collaborative relationships generate better results. It is also generally acknowledged that collaboration doesn’t just happen - it requires characteristics such as openness, honesty, free-flowing communication and a sense of shared interest.
In the context of business relationships, collaboration is made more complicated by the fact that each business is itself a complex ecosystem of interest groups - multiple stakeholders, each with their own perspectives, objectives and interests. That is why success often depends on the existence of an integrator, an intermediary who acts as a bridge between customer and supplier.
On the supply side, that bridge is often an account manager - someone who sees their role as understanding and representing the interests of their customer. A good sales commercial function also operates with this balanced view, understanding that it is essential for long-term positive results.
Procurement and collaboration 
But where is that bridge within the client organisation? Is it the Procurement function? Not according to suppliers. In a recent IACCM survey, 81% of suppliers say that ‘Procurement is more likely to operate as a barrier to business collaboration than to operate as a bridge’. Whether that’s a reality or just a perception doesn’t really matter, because either way it impedes collaboration.
Does this matter? The answer clearly is yes. Firstly because collaboration is itself important. Secondly because without Procurement fulfilling this role, who will? And thirdly, because if it doesn’t step into this space and address its image, Procurement as a function will become increasingly irrelevant to business needs and be seen as an obstacle to good results.
The CPO as leader
Many CPOs understand this challenge to their future role. A good number see their function evolving to become ‘integrators’, coordinating across stakeholder interests. However, most seem to see this from a purely internal perspective - which potentially further reinforces that ‘barrier’ image. Indeed, some even go so far as embracing the concept of ‘licensed procurement professionals’, having a monopoly on the power to award business. Good luck with that idea!
While the barrier mentality (focused on rules and compliance) may be fine when dealing with low value commodities, it is detrimental for most other acquisitions. For Procurement to have a robust future, it needs to expand the number of leaders who understand they must break down the barriers and instead build bridges - not just internally, but to their suppliers. That is certainly the spirit we see at IACCM conferences and it is the spirit that underpins the incredible optimism among IACCM members.

Topics: contract /commercial management, procurement, communication, IACCM, collaboration

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