Contract Management Benchmarking: Relationships

 

 

   
 

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

Relationships

How the client positions themselves in relation to levels of involvement and activity with key internal and external stakeholders across each stage of the lifecycle process, the relationship or positioning in the market place (as dominant or minor player) and how that is managed as well as managing change as the contract evolves and develops from start up to exit or re-tendering.

Involvement

The level and quality of involvement with suppliers and wider stakeholders in terms of the timing and involvement on key issues including early involvement and better informed decision making by considering both client and supplier issues as part of a wider and more collaborative approach to managing and improving performance.

Market Intelligence

The quality of market intelligence in terms of how it is collected (market awareness and scanning), how it is managed and shared internally and externally with suppliers and wider stakeholders in terms of ensuring that current solutions are not only fit for purpose but also up to date in terms of compliance, technology and best practice not just to deliver static levels of performance but to drive improvement and reduce total cost.

Managing Change

How change is managed across the contract management lifecycle to consider each lifecycle stage, start up, transition and exit stages as well as who and how stakeholders are involved and consulted as the contract evolves and develops over its lifecycle supported by a clear business case and decision making process.

 

   
 

CMB: Relationships

Relationships are often quoted and seen as the core of a contemporary contract management strategy where the style of relationship is determined by risk and value. This is not always the clients’ prerogative in terms of how the relationship with the market, involvement with contractors or suppliers and managing change create a potent mix that determines how businesses position themselves. Contract management is about managing and optimising a relationship, or relationships, in order to achieve the best combination of performance and cost.

 

   Relationships Facts & Figures

  • 68% collect market intelligence for key contracts,

  • 93% have a supportive environment to discuss improvements with suppliers,

  • 91% have regular operational reviews with suppliers,

  • 76% have regular strategic reviews with suppliers,

  • 49% have a formal handover from sourcing and procurement to Contract Management,

  • 56% have a formal process to identify lessons learned from contracts.

 

 

   

 

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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