There is a growing movement for transparency in contracting. Organizations such as the Center for Global Development and the Open Government Partnership are at the forefront. IACCM is a contributor and strong supporter of this work since it is fundamental to our mission of ‘improving the quality and integrity of trading relationships’.

“Memorial Sloan Kettering is in turmoil over a deal officials made to share cancer patient data with a for-profit artificial intelligence start-up.”

Although senior managers understand that contracts are important, most do not grasp the challenges – or potential contribution – that are associated with contract management. On the surface, it seems such an obvious and straight-forward activity – and therefore struggles to gain investment.

In 2006, at an IACCM Americas conference, a group of senior attorneys ran a mock trial to test the enforceability of electronic signatures. They concluded that, subject to due process, such signatures are enforceable.

It’s 25 years since big corporations started to automate and streamline internal data flows and communications. Given the impact that these changes had, it doesn’t take a brilliant mind to recognize the scale of cost and inefficiency associated with today’s semi-automated external communications and the virtual absence of automatically shared data. Essentially, the success of an organization such as Amazon is in large part because it has automated commerce, stripping out cost and simplifying the customer and supplier experience.

At the start of this week, I had two very different conversations. In each case, the conversation was with the global head of the Commercial & Contract Management function and in each case they were handling major outsourcing and services agreements. But at this point the story starts to diverge. They are summarized below:

Contracts – and especially contract management – continue in many organizations to be seen as largely administrative. For those who perform tasks in this area, that is never good news. Not only does it mean they lack influence and status, it means they are also often seen as dispensable.

The Royal Commission on Financial Services in Australia continues to unearth unprincipled and sometimes illegal activity within many of the industries leading players. These include the enormous scale of commissions paid for the sale of useless products.

At a recent IACCM roundtable, participants discussed the seemingly insoluble issue of maximising value from supply relationships. It was widely agreed that loyalty and collaboration are important characteristics, since they support more open communication and opportunity evaluation. Yet loyalty and collaboration depend on levels of long-term trust and integrity that are rarely achieved. The key issues – especially for buyers – are ‘How do I stop suppliers taking advantage of me and how do I ensure I’m not overpaying or missing out on innovation?’

Competitiive bidding lies at the heart of most procurement strategies. In the case of the public sector, it is foundational to  public procurement regulations.