A New Competency: Effective Services Contracting

Why service contracts are hard to manage


Of course, creating contracts properly from the start fosters more effective contract management. To this end, a successful CM solution enables collaborative contract authoring between both internal and external participants, facilitating cross-functional rule- and role-based review, editing, version tracking and approval. Many businesses also report that their service providers appreciate an easy to use, online RFx process, fast contract negotiations, and a vendor portal to facilitate communications — which all make it easier to do business with your company.

Conclusion

Looking at the success of organizations employing contract management solutions, we can conclude that CM is capable of bringing discipline and control to govern service agreements — generating advantages in cost savings through effective supplier selection, improved spend visibility and contract compliance, and shortened procurement cycle times. And these capabilities come just in time for an evolving service economy. As more functions are outsourced and more complexity requires outside expertise, your spend on services is almost guaranteed to increase.

"Welcome to a world," exclaims Tom Peters in his most recent book, Re-Imagine!, "where 'value' (damn near all value) is based on intangibles." Put another way, welcome to the world of services. As our networked, service-based economy continues to increase in complexity and sophistication, effective contract performance management is quickly becoming a required enterprise competency for the high-performing, service-reliant businesses of tomorrow.

About the Author: Jason Rushin brings over 10 years of experience in sourcing and technology as Nextance's director of product marketing. Prior to Nextance, Jason was a consulting manager at Accenture, responsible for strategic sourcing teams at a major energy company with $1.6 billion in total spend. He has also developed supply chain opportunities for other large enterprises, sourcing nearly one-half billion dollars in spend. Further, Jason has managed multiple strategic sourcing and e-procurement initiatives as well as led a Transportation sourcing segment at FreeMarkets (now Ariba). At Siebel Systems, he launched new products in key industry sectors, while also leading a change management team to improve company sales performance. Jason earned his BS from University of Pittsburgh and his MBA from Carnegie Mellon University.

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