Why contract management is vital to the business

September 2, 2020
September 2, 2020

Every organization is in a buy, sell and value-add trajectory continuously. The organization buys something, it does something to the purchased and then it sells its services or products – in a highly simplified way: The creation of value. Value is not derived from the buying perspective alone, value creation goes beyond procurement; same counts for sales. There is a lot more value to unlock in the areas of delivery and within agreements.

Universal language for contract management

A fundamental shift is taking place, from procuring and selling products, to the delivery or purchase of a service, change is afoot. This is not only driven by (hyper-)specialization, which is creating supply chains with more partners, but also by the increasing demand to realize an outcome or an objective, instead of purely a cash spent or earning. In order to manage this, it is vital that all involved parties in an agreement speak the same language, understand the same principles, and together make transparent what they need to do. That is what 15 years of pioneering has definitely shown us.

Drive value from the ecosystem of contracts

Managing the continuity of your business is not just about your own processes and procedures anymore. A lot of elements need to be managed. Take for instance realizing objectives, mitigating risks, creating value from innovation, but also having your corporate social responsibility (CSR) demands met in the value chain. And these are just a few examples. The dynamics between these elements require more than an effort on the level of an individual agreement – this requires an approach on the aggregated level of all your commitments, all your liabilities, all your demands. Like explained in The Sum of All Contracts. CATS CM® helps you to create a framework within your organization, that is suitable to fit the organization’s needs.

The book ‘Contract Management with CATS CM® version 4, from working on contracts to contracts that work’ explains the methodology. It is out in English now!