As new technology takes over and businesses outsource everything, will those managing their contracts be the only ones left in the office? If you’re wondering what 2017 will hold for you, your role and our profession, the future is bright if you start planning, and changing, now.
All the signs point to a surge in automation. The wave of new technologies we’ve been predicting is no longer on the horizon – it’s at the gate and, in some cases, already inside the building.
With cost-cutting still at the top of the management agenda, businesses are “subscribing” and outsourcing as much as possible, rather than buying and owning assets or people. So that means more and more contracts, more and more interdependent supply networks. Left with few assets other than contracts, business performance will depend totally on its capability to manage those contracts. Contract management is increasingly seen, therefore, as the one role that cannot be outsourced - central and critical to the business.
‘Nothing left but our contracts’
For those of you who’ve been with us on the journey, joining our conferences, tracking the evolution of our profession and preparing, this will not be new news.
Over the years technology and other factors have been transforming the way the world does business and the role of contract and commercial management. The crash of 2008 made organizations realize, if they hadn’t before, the critical need for business integrity as well as competitiveness. They needed contract managers who could deliver results and keep their business out of trouble.
By then, two types of contract or commercial manager had begun emerge. The traditional role remained focused on compliance and transactional oversight. But a second type could see that high value contract management was also very much about innovation, ethics and the management of reputational and regulatory risk, to deliver measurable financial performance.
Rise of the strategic contract manager
By 2014 we were already seeing automation increasingly replacing people in performing mundane or repetitive contract management tasks. Automation was also supporting a growing wave of improved management and performance data, enabling contracts professionals to anticipate problems and manage, rather than administer, contracts.
This new contract management role has become far more strategic, about business enablement rather than tactical operations. These new-breed contract managers are advisors to executives, ensuring that contracts and contracting procedures are supporting organizational strategies and securing business goals, as well as challenging the business to develop new competitive capabilities.
As executive management has woken up to the costs associated with poor contracting, this new, more proactive, contracting role has become increasingly pervasive, highly valued and secure. However, the numbers of those actually performing this role have fallen, as the more administrative and operational tasks are taken up by other operational groups or performed via automation.
Routine jobs will disappear
Fast forward to today, and for routine transactions involving drafting, negotiation and performance management – the vast majority of contract-related activity – automation is not just possible, it is desirable, operating with greater accuracy, efficiency and reliability than human resources. In my recent blog Do you need Contract Managers?1 I suggested that at least 35% of today’s jobs in contract, commercial and supply management will have disappeared within five years. But automation cannot innovate, design continuous improvement, or undertake research. Nor can it exercise judgment.
This year’s IACCM Americas conference in October confirmed the speed with which contract and commercial management are transforming as business disciplines and the value they are providing. Conference sessions were full of ideas, examples and case studies (presentations are available to members in the IACCM Library).
Contract management a core competency
With the central importance of contracts to businesses and economies now recognized (most recently by the award of the Nobel Prize for Economics), contract management is increasingly being seen as a core competency. With that has come growth in higher level contract management jobs and training – though also as an element of other roles, for example lawyers or project managers.
In another recent blog How many Contract Managers do you need?2 I highlighted the importance for every contracts and commercial group to step back and develop its strategic plan.
Increasingly, it is not enough just to understand the inner workings of your particular business, or have the expertise of your specific work or profession. For a career to flourish, being aware of the commercial trends in markets and appreciating the agreements that hold them together has become critical. IACCM highlights the need for “outsights” – looking beyond the boundaries of your organization, industry and geography to understand and evaluate wider contract and commercial trends.
The future will look different – but by no means bleak, unless you fail to plan or remain inwardly focused. To prepare, you can gain extensive value from IACCM research, from webinars or at member meetings and conferences (see for example the theme of our next member meeting in Washington DC or our next conference in Dublin at the IACCM events page).
1. Do you need Contract Managers? https://commitmentmatters.com/2016/11/10/do-you-need-contract-managers/
2. How many Contract Managers do you need? https://commitmentmatters.com/2016/11/01/how-many-contract-managers-do-you-need/
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