Marketing versus Procurement, Sales versus Procurement, the business versus Procurement … If you pay attention to the headlines coming from many Procurement trade bodies and associations, you would think that every day for the average Procurement Department is a battle.

A recent item on LinkedIn introduced the concept of a “pre-mortem” in decision-making. It suggested the need to explore the impact of an idea in advance – “one set of thinking is to explore if the project is a complete success, the other to explore the impact if the change made is a total failure. Imagine if Volkswagen had done a “pre-mortem” on their “cheat device” engineering? If Facebook had explored failure scenarios with sharing data with third party apps? If Wells Fargo had examined the operational impact of bonuses for new accounts? What if the moon mission in the 1960s had explored failure? Oh wait…they did. In fact, NASA is probably one of the more principled decision making bodies to examine countless “failure scenarios” and adjusting processes to reduce probability of negative events.”

Suppliers understandably complain about the unreasonable terms and narrow evaluation methods used by some of their customers. They are often right to point at the failures that result from such behavior, when it results in incompetent and sometimes dishonest suppliers winning business that they have no chance of performing, or the burden of risk promotes an adversarial relationship.

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.

Quality, time and cost are critical indicators for most business functions as they compete for funding and resources.

During a recent webinar, a participant asked whether there is such a thing as a ‘contract quality index’ – some method or algorithm by which an organization might judge its contracts.

Non-compliance is risky. It leads to fines, job losses, reputational damage, lost sales. Since it is so important, businesses make substantial investments to reduce the chance of breaches – and of course a major element of those investments is people: reviewers, approvers, auditors, compliance experts.

Many organizations do not have a well-defined, end-to-end contracting process. Frequently, contract-related activities appear as sub-elements in other processes – for example, in Product Lifecycle Management, Procurement or Project Management.

According to IACCM’s most recent benchmark survey, some 92% of corporations operate with standard template agreements. In the traditional ‘battle of the forms’, the buyer templates are generally the winner. That typically means that both sides lose.