Contract Management Benchmarking: Manage

 

 

   
 

CMB: Benchmarking Model

Our initial research and market review of benchmarking tools led to the development of a bespoke contract management benchmarking model. The Contract Management Benchmarking model considers the inputs and outputs (or performance) of managing contracts. The model has been developed based on research and observation of best practices across different sectors.

The CMB tool considers what organisations do (inputs) to create an environment where good performance (outputs) can be achieved. The model is organised into three Categories with three Elements (nine in total) for each Category. The Categories are Manage, Performance and Relationships.

Our database includes data and information from over 300 discrete submissions. 60% are listed business and represent 15 different sectors from manufacturing to distribution, aerospace, defence and marine to retail, banking and financial service to the public sector. 20% are FTSE 100 businesses.

  • 75% of participants have a Contract Management process in place,

  • 28% have organised Contract Management as a separate function,

  • Contract Management is represented at Board level in 42% of participating businesses.

 

  
 

CMB: Benchmarking Model

Category

Elements

Manage

How the client “manages” the contract in terms of making fact based decisions based on timely and accurate information, the exposure to commercial and technical risk and the ownership of the contract management process and relationship with the supplier.

Management Information

How and what management information is generated, used and shared to enable fact based decision making in relation to understanding individual contract performance and across the contract portfolio and to empower contract managers and other stakeholders to consider the wider issues of managing and improving performance.  

Risk

How risk is identified, quantified and considered in making informed decisions as well as mitigations and contingencies that are in place to reflect risks that each stakeholder is potentially exposed to across the lifecycle of the contract.

Ownership

Clarity of ownership of the contract and the definition of roles and responsibilities in relation to managing contracts in terms of who is responsible and accountable for management and performance issues as well as the definition and key interfaces between client and suppliers and subcontractors.

 

    
 

CMB: Manage

Managing contracts means different things in different sectors. This is driven by environmental factors, business context, lifecycle, market and regulatory factors as part of a complex mix of issues. Irrespective of these different factors Management Information, Risk and Ownership are key issues in formulating and executing a Contract Management strategy. Making better informed decisions based on high quality and timely information is vital. Understanding Risk and its implications is an increasing focus across the supply chain highlighted by natural disasters and changing economic forces in terms of demand and fuel costs. Ownership, perhaps the critical success factor, is key in terms of roles and responsibilities to manage and improve performance and reduce total cost.

  

   Manage Facts & Figures

  • 91% of participants gather supplier performance data on a regular basis,

  • 76% of participants analyse, rank and report supplier performance on a regular basis,

  • 10% of participants audit suppliers on a Quarterly basis,

  • 70% involve suppliers in identifying Risk,

  • 66% monitor Risk independently of Project Managers,

  • 88% of Contract Managers are involved in sourcing and procuring contracts.

  

 

    

 

The CMB Survey and contents are © SCMG.
No further use of this material is permitted unless agreed in writing with SCMG.

CONTACT DETAILS
Tel: +44 (0)141 945 6461. email: cmb@scmg.co.uk