Commitment Matters

If you are a professional in Contract & Commercial Management, committed to achieving the best possible outcomes from negotiations with all your trading relationships, then ‘Commitment Matters’ is the perfect source of regular articles and posts dedicated to helping you achieve that goal.

Missed Opportunities

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

Jun 23, 2014 10:30:25 PM

Average savings that exceed 25% of contract price are impressive, especially when they are achieved through cost reduction, not through slashing supplier margin.

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Topics: contract /commercial management, procurement, sourcing, risk management, organization & people, supply chain management

The rise of localism: them and us could threaten your job

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

Jun 2, 2014 4:04:17 AM

Recent elections for the European Parliament are just one example of the push-back on globalization and the uncertainties it creates. Unwilling to accept or threatened by change, many people seek the status-quo, even hungering for a by-gone 'golden age' lodged in their imagination. This is in no way new; throughout the Middle Ages, populations in Western Europe looked backwards and their aim was to restore the past. It was only as a result of the 'Age of Discovery' in the 16th century that minds shifted, appreciating that a larger world perhaps offered potential for a new era of invention and prosperity.

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Topics: procurement, sourcing, international, risk management, supply chain management

Taxing times for Contract Managers

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

May 26, 2014 10:37:46 PM

High-performing contract and commercial experts have always grasped the importance of understanding taxes. A smart approach to issues such as delivery or country of origin can have a substantial impact on price or profitability. But the stakes are about to get higher, if we believe a report by tax experts at Ernst & Young.

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Topics: negotiation, contract /commercial management, procurement, sourcing, risk management, legal, organization & people, supply chain management

Will regulation eliminate the need for contract negotiation?

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

Apr 8, 2014 1:12:29 AM

Take a look at this article describing the terms that are now impacted by regulation in the financial services industry. The list is so extensive that the scope for meaningful negotiation appears severely reduced. Already, we are seeing pressure for the creation of industry standards (and indeed, IACCM is working with a large group of international corporations on exactly this topic).

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Topics: negotiation, contract /commercial management, procurement, sourcing, international, risk management, legal, organization & people, supply chain management

Change management in a time of chaos

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

Mar 31, 2014 3:43:51 AM

In previous blogs, I have highlighted the challenge of managing change in today's contracts. The frequency of change has increased, the causes of change are more varied, yet the mechanisms through which change requirements are identified and managed have failed to keep pace.

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Topics: contract /commercial management, sourcing, international, supply chain management

Commercial staff and objectivity

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

Mar 25, 2014 1:30:10 AM

Many will recall the prolonged debates over whether or not Chinese technology firms Huawei and ZTE could be trusted. The US Senate blacklisted both.

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Topics: negotiation, contract /commercial management, relationship management, international, supply chain management

Supplier Relationship Management ... does it have a future?

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

Mar 24, 2014 11:08:55 AM

Partnerships, collaboration, mutual success. Increasingly these are the words used by executive management when they describe how their business will work with trading partners. Yet without fundamental change to policies and processes, these words remain little more than sentiments.

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Topics: procurement, sourcing, relationship management, organization & people, supply chain management

The case for an integrated commercial service

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

Jan 20, 2014 12:59:23 AM

I enjoyed reading a recent paper from Horses for Sources Research, which draws on research by Proxima to highlight the fundamental shift that has occurred in business operations and the challenge this represents to organization and skills. Essentially, the study found that the average business spends some 70% of its revenues on non-labor costs and this has generated a critical dependency on services supply chains. This has generated a need to fundamentally alter the way that supply relationships are managed.

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Topics: contract /commercial management, procurement, relationship management, organization & people, supply chain management

Government Procurement in a mess ... but is it just the tip of the iceberg?

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

Dec 11, 2013 8:58:39 PM

A series of recent incidents from around the world (or at least, the English-speaking world) must lead anyone to ask 'what is wrong with public sector procurement?'

Is it just a coincidence that major problems seem to be popping up on a regular basis (e.g, in recent weeks, Obamacare, Queensland outsourcing, UK justice contracts and now the abandonment of outsourcing defense procurement), or is there a pattern that would imply something more fundamental is wrong?

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Topics: contract /commercial management, procurement, sourcing, relationship management, risk management, organization & people, supply chain management

Do alliances suggest organizations are 'dumbing down'?

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management

Dec 5, 2013 9:45:38 AM

At the IACCM Sydney workshop, Stephen Hayes (CEO of the International Centre for Complex Project Management) posed the question whether increased 'alliancing' implies organizations are becoming less skilled. He came fresh from an executive briefing where this topic had been raised and it was especially relevant given the interest at the workshop in 'relational contracting'.
The IACCM audience was universal in its rejection of this suggestion. While recognizing that specific organizations may have reduced their capability in recent years (e.g. as a result of outsourcing), the general driver for increased collaboration is the need to tackle increasingly complex projects or to enter new markets. In other words, the motivation is normally to supplement existing skills. Alliances or other forms of collaborative relationship reflect alternative approaches to risk / reward allocation; they are part of a 'spectrum' of contracting models that include anything from a traditional purchase order, through to a joint venture.
In some cases, it may be the customer who pushes their suppliers into a more formal alliance or partnering arrangement. They may see this as adding efficiency and reducing risk, forcing separate suppliers to work together in a more integrated fashion. Other times, a supplier may view this relationship as an opportunity to raise their internal skills by having more direct insight to their partner. It may even be a phase in the journey towards merger or acquisition.
Overall, the shift in the business environment to outcome-based contracts and more thoughtful allocations and management of risk suggest that 'partnering' in various forms will become increasingly common. Far from being a statement of weakness, the ability to form and manage partner relationships effectively will in fact be an indication of strength and a key factor in supplier selection.
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Topics: contract /commercial management, relationship management, risk management, supply chain management

About the Author


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Tim Cummins

In his role as President of IACCM, Tim works with leading corporations, public and academic bodies, supporting executive awareness and understanding of the role that procurement, contracting and relationship management increasingly play in 21st century business performance and public policy.
 

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Commitment Matters is the personal blog of Tim Cummins, the Founder and CEO of IACCM. If you are a committed contracting professional and want to develop your skills and network, take a look at what IACCM has to offer.
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