Stabilizing the Power Pendulum

I was privileged this week to spend a few days with several hundred practitioners in the art of commercial contracting.  The IACCM Annual Americas Forum held in Chicago drew participation from hundreds of companies around the world that are committed to innovation and improvement in contracting process, practices, and skills.

I’ve attended several of the IACCM events over the past 15 years – a testament to the commitment and persistence of the IACCM leadership, notably CEO Tim Cummins.  This year’s conference demonstrated the power of collaboration among the professionals who are committed to improving the quality of Buyer-Supplier relationships.

IACCM (International Association for Contract & Commercial Management) is a unique not-for-profit organization that is committed to improving the quality of commercial contracting.  In this day and age of changing forms of contracting, their mission is more important than ever.

I co-presented a session today focused on the techniques used buy procurement organizations and sales professionals to create new sources of value through collaboration.  Jim Bergman of IACCM joined me in this presentation.  We shared our experiences around techniques to move from transactional buying to shared risk, shared investment, and collaborative innovation. 

While collaborative buyer-supplier relationships are clearly not an everyday occurrence, we observed that certain conditions are essential if the parties share a desire to move beyond a commodity transaction.  These include:

·         Foundation of delivery on core commitments and trust

      ·         Transparency and candor
      ·         Shared risk, shared investment
      ·         Strong contractual documentation

Each of us drew upon our experiences on the buy-side and sell-side of commercial contracting.  In particular, I described the shift among enterprises from requirements-driven to offering-derived contracting.  In a world of “as a service” subscriptions, contracting strategies are increasingly informed by the availability of market-defined offerings. It was a fun session that we named “Stabilizing the Power Pendulum”.

 

We were followed by an enlightening example of the importance of the IACCM mission.  Dr. John Henke of Oakland University and Planning Perspectives shared the results of his research into the bottom-line contribution attributable to strong and positive supplier relationships, with emphasis on the automotive industry.  It was a compelling example of how strong supplier relationships convert to improved profitability.

It was invigorating to be among so many people who are committed to creating value for their firms through techniques of progressive contracting in a changing world.

Peter

Sourcing Realities