ISM Dispatch: Hold the Contract (Management), Please!

I was talking to a colleague attending the ISM conference yesterday who asked me whom he could talk to about contract management software. Then it hit me: only a handful of the providers that focus on the area with differentiated solutions (e.g., SciQuest) are actually on the floor. And perhaps even more interestingly, there are no sessions that I could find on contract management in the track sessions, at least not as a main focus. Sure, there are tons of providers that have some semblance of contract management, but few specialists in attendance. Where’s Novatus? Where’s Selectica? Where’s Seal?

The answer is that they made an informed decision (an unfortunate one, but probably a smart one) that ISM and the general procurement practitioners attending aren’t the ones leading the charge in contract management decisions involving anything but the basics. This is unfortunate as contract management and contract strategy touch so many areas of procurement and other procurement solutions – savings implementation (time and effectiveness to implement sourcing savings), supply risk, supplier diversity, eProcurement compliance, e-invoicing compliance, direct spend compliance, commodity management, supplier management – the list goes on!

I don’t think ISM and its members have turned their backs on contract management. Rather, I think they’ve not prioritized the area for a number of reasons:

  • The role of contracting is fundamentally something that rests outside of procurement (e.g., legal).
  • The topic has taken a backseat to other areas of compliance investment (especially accounts payable, transactional procurement, and supplier management tools).
  • The payback on contract management can be more nebulous (but it does not have to be).
  • Regular procurement practitioners believe they need just the basics (e.g., contract repositories versus clause libraries/scoring, integrated contract risk analysis, etc.)
  • Procurement consultants generally aren’t very deep in it and tend to focus on other technologies as part of their procurement transformation and architecture work.
  • And the elephant in the room … procurement suite vendors generally aren’t very good at it relative to specialists. And those that have strong tools for authoring and compliance, such as SciQuest and Emptoris/IBM, have not focused on developing capabilities that reside on the same platform as sourcing, supplier management, analytics or other areas, leading to a loosely coupled toolset that offer few advantages from an integrated suite perspective.

Contract management matters for so many reasons (a topic my old friend Tim Cummins of IACCM can make anyone a believer in if you give him just a bit of time). Perhaps we all owe it to ourselves to pay it more attention as part of mainstream procurement. We’re as guilty as anyone at Spend Matters in not giving it the regular attention it deserves.

Comments

  • Peter Smith:

    Hold on one minute! This side of the Atlantic, Spend Matters has given the topic a good amount of coverage, we’d argue. I was the co-author a few years back of the Contract Management guidance now used as standard practice by central government in the UK, and I wrote three papers last year on “Building the Business Case for Contract Management”. Here’s a link to download the last of them. http://spendmatters.com/research-library/perspectives/contract-management-making-business-case-investment-part-3-identifying-opportunities/
    But agree with most of your your comments Jason – procurement professionals still don’t tend to take contract management seriously enough. That needs to change.

  • Lloyd Alexander:

    We appreciate your post and agree that contract management is a vital component to ensuring a comprehensive procurement process. As the ISM conference continues to grow and gain momentum, we certainly hope contract management will play a larger role in helping shape the show’s future content – procurement professionals can benefit largely from contract management strategy. In the meantime, there are resources available to help procurement professionals gain a better understanding of the contract migration process and how this can make their internal systems more efficient. Seal Software recently introduced an e-Book on this very topic to help organizations broaden their understanding of the benefits of implementing a comprehensive contract discovery and review initiative. It’s available for download here: http://bit.ly/1kJcaFS.

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