110804 NCMA contract management   brazil
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110804 NCMA contract management brazil

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Presentation to National Contract Management Association, Rio de Janeiro, Brazil 4 August 2011

Presentation to National Contract Management Association, Rio de Janeiro, Brazil 4 August 2011

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110804 NCMA contract management   brazil 110804 NCMA contract management brazil Presentation Transcript

  • Effective Contract Management Dr Gordon Murray
  • Contract Management When does it start? When does it end? Who ’ s responsible?
  • Effective contract management is about delivery of the required outcome
  • Contract management requires effective upstream and downstream management of the contract award
  • Procurement Cycle 8. Closure / Review Need 1. Identify problem 2. Develop Business Case 3. Define Procurement Approach 4. Competitive procurement 5. Tender Evaluation 6. Award Contract 7. Manage Implementation of Contract
  • Who should be involved in contract management?
  • The buying decision making unit
    • Initiator who first suggests buying the product or service
    • Influencer whose comments affect the decision made
    • Decider who ultimately makes all or part of the buying decision
    • Buyer who physically makes the purchase
    • User who consumes the product or service
    (Wilson, Gilligan and Pearson, 1992)
  • Should all contracts be managed in the same way?
  • Tools for differential contract management
  • Pareto and ABC Analysis
  • Kraljic ’s Procurement Positioning Model Bottleneck Strategic Routine Leverage Supply Market Complexity/ Risk Expenditure
  • Supplier Positioning Model of potential customers Development Core Nuisance Exploit Attractiveness of account Relative value of account
  • Power dependency Buyer dominance (>) Interdependence (=) Independence (0) Supplier dominance (<) Attributes to buyer power relative to supplier (Cox, 2003) Attributes to buyer power relative to supplier
  • Relationship management
    • Adversarial contracting does not necessitate adversarial relationships
    • Effective relationship management requires
      • Mutual respect
      • Mutual trust
      • Mutual understanding
      • Creating an open and constructive environment
      • Contributing to joint management of contract delivery
  • Service delivery management
  • Performance management
    • Shaped by the original customer definition of need
    • KPIs identified prior to contracting
    • Likely to be directly linked to tender evaluation criteria
    • KPIs should be
      • Proportionate,
      • fit for purpose,
      • easy to support by evidence,
      • accepted by key stakeholders
  • Potential outcome based performance measures
    • Benefits realised
    • Cost and value obtained
    • Innovation transfer
    • Reduced environmental impact
    • Performance and customer satisfaction
    • Delivery improvement and added value
    • Delivery capability
    • Relationship strength
    • Responsiveness
  • Closing the contract
  • Contract management review
    • Aims to capture the lessons learnt for improving procurement
    • Should include key stakeholders
    • Complete a post-contract review report
      • What worked well?
      • What didn ’t work?
      • What are the lessons for letting this type of contract in the future?
      • What are the lessons learnt for improving procurement performance?
    • Capture and communicate
  • Effective Contract Management Dr J Gordon Murray [email_address] www.Twitter.com/DrGordy www.slideshare.net/drgordonmurray