Procurement / Contract Performance Management

Partnering with third-party suppliers, service providers, and organizations can potentially provide your organization with many benefits such as decreased costs, increased efficiency, and better customer service. Although, for many organizations managing these relationships are more headache then they are worth. Bad contract management can threaten your organization and your bottom line. Since it is impossible to cover everything in the initial contract, organizations and their partners need to have a method of “living-together” that benefits both parties. This requires a heavy emphasis on “art” – which is our specialty.

How We Can Help

If you are looking to achieve long lasting, healthy, and mutually beneficial relationships with suppliers and providers, we can help. We have extensive experience in the area of contract performance management with a focus on both strategic procurement and on managing the relationship after the contract has been signed. Our expert consultants understand that the basis of any healthy relationship is trust. We believe good contract performance is a continuum – starting with the procurement strategy and flowing through to contract management. Our expert consultants will come alongside you to review your procurement strategy, recommend improvements, and help you implement a contract performance management process to deliver you the best benefits.

Specifically, we can help you with:

  • The development of a strategic purchasing plan
  • Evaluating the trade-offs between conducing services “in-house” versus third party providers
  • Evaluating areas for procurement/contract management success: flexibility, process cycle time, data quality and planning process
  • Conducting an organizational structure and skill level review of your procurement department
  • Developing procurement resource planning tools and processes
  • Helping to develop vendor selection, contract development, and contract management processes

Key Considerations

Questions to Ask

  • Do we have healthy relationships with our providers and suppliers?
  • Do they look after our needs as much as theirs? Do we reciprocate the benefits?
  • Is our contract performance management as efficient as it could be? —- What problems still arise?
  • How do we deal with issues that aren’t found in the contract?
  • Do we have a risk management plan in place? If one of our suppliers were to fail to deliver their obligations, how would that affect our business? Do we have a contingency plan?

Thoughts to Consider

  • Procurement strategy, contract award, and contract management should all be seen as a continuum rather than distinct phases or functions. It is important to establish clear goals, expectations and processes right from the beginning to avoid unnecessary issues later.
  • Contract performance management should focus on both your organization and your partners. Healthy relationships are mutually beneficial – with both parties willing to work together for the common good.
  • Culture plays a large part in contract performance management. If the two organizations have vastly different cultures, misunderstandings and problems may arise. In these situations, it is important to develop a clear understanding of the other organization’s culture and expectations to avoid any procurement and contract performance risk.
  • Risk management plays an important part in contract performance management. The level of acceptable risk and who bears the risk is an important consideration. Also, although we hope it never happens, sometimes the risk of a supplier or service provider failing to deliver can be disastrous. It is essential to have a contingency plan in these types of situations.

There are many benefits of having a strong procurement strategy and contract performance management process including:

  • Greater operational efficiency through effective use of partners and suppliers
  • Decreased headaches and management effort resulting from ambiguous contracts
  • The establishment of sound processes for dealing with issues that are not covered in partner contracts
  • Increased competitiveness and opportunities in the market
  • Greater flexibility for when environmental and industry changes arise