Last week, the International Association for Commercial and Contract Management (IACCM) hosted its annual Americas conference in Phoenix, AZ. With over 60,000 members globally and, with 1,000 being added every month, the association is going from strength to strength. Celebrating its 20th anniversary this year, 2019 has also been a hallmark one for the leadership, with the founder, CEO, and president, Tim Cummins, handing over the CEO reins to Sally Guyer, formerly COO. The IACCM also hired long-time board member, sponsor, and supporter, Paul Branch, as the COO and CTO. The association has added significant firepower to their leadership which should continue to help drive both the significance and influence of the body.
As a regular attendee for several years, I have witnessed the sharper focus that the association has been taking to raise the profile of the contract and commercial managers in enterprises. From creating industry-wide contracting principles to delivering professional certifications, IACCM is intent upon helping their members raise the profile of their profession and make it as relevant as possible. This requires a full understanding that what they do is crucial to the business and is a value-add. This needs to be done with the highest standards of ethics and transparency possible.
The key themes for the event this year were:
- Contract Economics
Contracts and their related documents are the instantiations of business relationships when it comes down to it. They are what go before a court in the event of breaches and disputes. Therefore, getting well-written and fair contracts executed is significant in sustaining long term relationships between buyers and suppliers and for risk and cost management.
To paraphrase James Carville, “it’s contract economics, stupid”. Ultimately, everything comes down to economics and so understanding the costs associated with contracts, across their full lifecycle, is a pre-requisite to showing the value the profession brings to business.
“Contract economics is about reducing the cost of contract creation; understanding the financial impacts of risk acceptance and allocation; and reducing the operational costs associated with managing contract performance, which includes tackling the sources of contract value erosion.”
The importance of ethics cannot be underplayed and quite a number of sessions were devoted to the importance of trust in the contracting process. The IACCM defines it as
“The quality and integrity of commitments to the market, ease and clarity of understanding, the honesty and transparency of commercial practices are key areas that enhance or undermine an organization’s reputation and ethical standing.”
Without innovation, there is little forward momentum and the last few years has seen innovative approaches across many facets of the contracting process.
“Commercial innovation: new approaches, new ideas, new forms of relationship and commitment are increasingly key to business survival.”
Two highlights from the ethics-focused sessions included the discussion of the FIFA scandal as an ethics warning and the big debate on whether suppliers and buyers can ever trust each other fully.
Role of Technology
Underpinning all these themes is technology. From early implementations of blockchain and other distributed ledgers that address the issue of trust, to contract analytics that provides visibility into obligations and risk, there were several case studies highlighting how technology is transforming value processes for contract and commercial managers.
A Seal customer, Qorvo, gave an impassioned overview of their usage of contract analytics to bring control and insight to a range of contract types and use cases. What was clear, is that where you start in your contract lifecycle journey is usually driven by where the pain is most acute, and this does not require the implementation of a CLM system. Hope Myers, Global Director of Contracts, explained how the merger of two companies to form Qorvo (RF Micro Devices [RFMD] and TriQuint Semiconductor) brought its own sets of challenges with respect to contracts. As she explained, Qorvo was formed as “a merger of equals,” so understanding which contracts were where, which provisions were most preferable and what the implications of the merger contractually meant to customers and suppliers was crucial. So, for Qorvo, getting insight as quickly as possible was critical and that required onboarding thousands of existing contracts in the Seal platform and building analytics to gain visibility into the topics and sub-topics of concern and interest to the merger of RF Micro Devices (RFMD) and TriQuint Semiconductor.
For me, 2019 feels like somewhat of a tipping point for IACCM. Perhaps as it is 20 years old, there is a straight parallel to the maturation from teenage years to adulthood. IACCM is recognizing the important role it can play in the wider business context rather like a teenager becoming very aware of the wider society as they begin their journey into working life.
Positivity and optimism abounded in Phoenix – a recognition that the value of contract professionals is perhaps finally being recognized and appreciated.