Supplier risk isn’t just a major issue for Fortune 500 businesses. Organizations of all sizes need to recognize the responsibility for managing all third-party relationships based on a heightened level of interest and concern in recent years. This is especially true in highly-regulated industries like finance, healthcare, and food services, which operate under constant, intense scrutiny and massive regulatory oversight. With fines that can be in the tens of millions, the potential for being audited and penalized due to non-compliance is compelling companies to re-evaluate how supplier information is collected and how contracts are managed.

This article, which takes a post-pandemic look at third-party risk management, ties to a recently recorded webinar titled How to Quarantine Your Third-Party Risk.¹ Our two organizations -- World Commerce and Contracting Association (WC&C) and Determine, a Corcentric Company²-- broadcasted the webinar on April 13, 2020.

Research Analyst Harry Bevan sat down with the ARC’s Vice President and Chief Procurement Officer, Thomas Nash, to find out just how his team managed to ensure the continuous supply of Personal Protective Equipment (PPE). Here’s what surfaced from their interview.

Imagine having all the necessary contractual terms, legal papers, technical specifications and service requirements all nicely drawn up and signed by both parties, you the seller and your customer, the buyer. You have just signed a contract and started a new business relationship until suddenly a verbal altercation breaks out between your project team and your client, who is your customer’s representative.

I’ve seen several critical trends that I believe procurement will pursue in the next few years. Today, I’m concentrating on the top three. These are in addition to the procurement table stakes¹ -- namely cost and supplier management.

Few realize that Statements of Work (SoWs) annually transact £680bn ($893bn US dollars) of non-permanent work in professional services. Not only is this trend increasing by 16% every year, COVID-19 is responsible for an additional and accelerated increase (see IPSE).¹ It is therefore critical that we fix what’s wrong with SoWs, and from what we’re learning now, you probably agree.

Imagine yourself reaching beyond today’s crisis management by telescoping into tomorrow. Based on your initial findings, you start by developing smarter forecasting techniques and new strategies for identifying the risk. Then, having reached that level, you start to realize that some contracts really are more equal than others!

How so? Why focus on them? And can you do that?

The idea that automation will replace humans at the workplace is not only false, just the opposite is true. People will matter more today and in the future than ever before, even though digitalization will replace up to 50 to 60 percent of work normally done manually. Automation cannot provide insights into the business. Digitization alone cannot provide more analytical, strategy and relationship-focused work to the organization. This articles takes a very positive focus on how we humans can maximize this emerging change in our landscape.

I was talking with my friend and her daughter last week, explaining a bit about what I have been doing lately when her daughter asked me a question—why would I choose a career in contract management?

Many presentations have been given on why the new engineering contract (NEC) is so different from other standard forms of contract. I have given quite a few myself over the last 25 years. But I have only recently focused on the criticality of just one word in the NEC contracts: forecast. It’s important to keep in mind four key points: