BravoSolution Real World Sourcing – Generating real value from your contracts

We didn’t pick the best day for our latest BravoSolution Real World Sourcing events. Yesterday, the day of Baroness Thatcher’s funeral,  found 40 of us fighting (well, strolling perhaps) our way through the barricades and police presence in London (see photo, after the main event). We were headed to the second of this year’s series, with me talking about “Generating real value from your contracts”.  So particular thanks to everyone who came along and made it as usual a stimulating session with plenty of audience involvement.

It is of course a huge topic – it’s a bit like saying “today’s topic is Procurement” really.  So we had to focus on certain key aspects. One of those is the debate around why (in my view at least) procurement needs to take more of a lead on contract management in our organisations.  And one simple reason is; if we don’t, who else will? Then we have the real clincher, which is that ineffective contract management will make even good work by procurement, and a strong contract, turn into unsatisfactory delivery.

So do you want to be blamed unfairly when things go wrong? “That supplier is rubbish, don’t know why procurement chose them ”, when actually it is poor contract management that has caused the problem?

Then we got to the heart of the contract management debate – why should we bother?  That is not a purely philosophical question, as the answer to it also defines  the business case that procurement can put forward for investment in contract management (people, time, systems...).  It also helps to determine the amount of effort we should put into each contract.

Our conceptual answer is that contract management is all about risk and opportunity. Risk needs to be mitigated and managed through effective contract management, whilst opportunities similarly can be identified and pursued.  Defining those risks and opportunities then becomes both a key part of the business case, and a strong guide as to the key strategies, activities, processes, and measures that need to take place to define effective contract management.

We’ll have more on the session early next week, with links to the slides. And don’t forget, you will be able to  take the “test” to win the BravoSolution Real World Sourcing scholarship.

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