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15 February 2008 · Article

The value proposition behind commitment management and improved corporate contracting

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Most businesses view contracts as a defense mechanism. This means that while negotiation is in part about defining the relationship, it is used most extensively to agree on the allocation of risks. In addition, there is rarely a defined point of internal ownership carrying accountability for contracted outcomes. 

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As a result, the process is complex, lengthy and poorly defined. Or, alternatively, it is rigid, insensitive and focused on compliance. In either case, contracts are viewed by many as a bureaucratic necessity rather than a core business asset, and the impacts they have on business performance are inevitably sub-optimized.

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This article suggests a way in which contracts can become a source of increased value and assist the business in driving growth and innovation. These recommendations apply to both sell-side and buy-side contracts and procedures — because in the end, no matter which group you represent, everything you do must support your ability to win in the market.
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TIM CUMMINS, CEO, IACCM.
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