PurchTips - Edition # 111

 

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Is Contract Management A Critical Process?

By Charles Dominick, SPSM, SPSM2, SPSM3

Is The Contract Management Process Underrated?

A good contract management process ensures that both the buying organization and the supplier fulfill all of the obligations that they agreed to in signing a contract. It also helps the buying organization achieve all of the benefits it expected to when contracting with a supplier.

Not having a good contract management process in place has consequences both to the buying organization as well as to the purchaser. If no one is managing the performance of the contract, an organization is likely to fail to meet its goals that it had for the project associated with the contract. Such failures may include delayed timelines, cost overruns, and more.

But what I'm even more interested in is the personal impact it can have on the purchaser. If the purchaser negotiates a great contract and drops the ball in making sure that its terms and conditions were adhered to, s/he may end up looking for a new job quite soon.

I have called the contract management process one of the most underrated aspects of purchasing. Here's why...

Lots of attention gets paid to the processes leading up to the signing of a contract – things like strategic sourcing and negotiation. Those processes get attention because they produce the first statement of how much money will be saved over the contract's term. And that's great.

But the savings numbers that are shared at that point are estimates only. No savings have actually been realized. And they may never be realized. Yet, in many organizations, those same estimates are recorded, the purchasing department takes credit for them, and no one ever verifies if those estimates ended up being accurate.

But today's senior executives are getting smarter. If savings are estimated, they want to see exactly how and when they affect the organization's financial statements.

Without contract management to ensure that those savings are realized, it's likely that the estimates will differ greatly from the actuals. That's when senior executives look for someone to hold accountable.

Starting a contract management process doesn't have to be complicated. You can always begin small and grow.

Starting may be as simple as creating a spreadsheet with dates and tasks that must be finished by those dates. The purchaser simply monitors those dates and keeps in close contact with the supplier to ensure timely performance.

For major contracts, the purchaser should also hold regular periodic reviews with suppliers to keep channels of communication open and discuss strategic issues.

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Spotlight On Professional Development Opportunities

SPSM Certification

Are you tired of not getting enough opportunities, respect, and money out of your purchasing career? Well, guess what? Nothing will change unless you take action towards becoming a world-class purchasing professional.

You see, today's employers refuse to reward employees for yesterday's skills.They demand that purchasing professionals like you use the most modern skills and achieve unprecedented results. They want you to save more money, achieve better operational performance, and reduce risk.

Is lacking a purchasing certification keeping you from getting the results, opportunities, respect, and money that you want out of your career? Today's employers refuse to reward employees for yesterday's skills. They want you to save more money, achieve better operational performance, and reduce risk. They demand that purchasing professionals like you achieve unprecedented results and without the most modern skills that can be a challenging feat!

So how can you acquire the most modern skills, achieve meaningful results, and convincingly prove your capabilities to today's employers? There is an impressive purchasing certification program that will teach you what you need to accomplish all of this and more. It is the SPSM® Certification, earned by completing the Senior Professional in Supply Management® Program. And you could earn it in less than a year - maybe even much less than a year!

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) (with the option of getting a Study Guide on an iPad) at:

Distinguishing yourself as an achiever in purchasing is key to sustaining a rewarding career, even in these difficult economic times. Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPad) at:

Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices  into your organization and achieve your career potential. And if you sign up for the Senior Professional in Supply Management® Program on or before May 31, 2008, SPSMSM Certification Program on or before 4/30/2007, you also get these and other bonuses valued at over $700:

  • FREE $30 gift certificate to Amazon.com!
  • FREE CD-ROM with printer-friendly versions of the class materials!
  • FREE Purchasing Performance Measurement spreadsheet template!
  • FREE audio CD about purchasing job security!

To learn how to earn your SPSM® Certification and get these valuable bonuses, visit:

Earning your Senior Professional in Supply Management® (SPSM) Certification is the action to takeif you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSMSM Certification at:

Learn how to earn your SPSM® Certification at:

www.NextLevelPurchasing.com/spsm.html



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Included in your free Starter Kit:

  • Access to two lessons from courses that are part of the Senior Professional in Supply Management® Program
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If you are already a member of the NLPA, click here to login and visit the "Starter Kit" tab to access these resources.