The Future of Contract and Commercial Management

sponsored by www.iaccm.com This report is based on input from more than 1,000 experts and senior practitioners. 0[YLÅLJ[ZHZLYPLZVMPU[LY]PL^ZYV\UK[HISL KPZJ\ZZPVUZMVY\TZHUK^LIIHZLKZ\Y]L`Z JVUK\J[LKPU[OLWLYPVK5V]LTILY ¶-LIY\HY` www.iaccm.com

Introduction ...... 4 +LMPUP[PVUVMĐVU[YHJ[]ZĐVTTLYJPHSŵHUHNLTLU[ ...... ...... 5 Expectations of change ...... *VU[YHJ[ZHUKWJSH[PVUZOPWZ ...... ..... Approach to negotiation ...... 8 A change of appearance and construction ...... 9 +YP]LYZVMĐOHUNL ...... ....11 0U[LYKLWLUKLUJ`HUK[OLº]PY[\HSLU[LYWYPZL» ...... 11 (UL^HWWYVHJOHUKHUL^H[[P[\KL[VYPZRHUKP[ZTHUHNLTLU[ ...... 12 ;YHKP[PVUHSYPZRZ^VU»[KPZHWWLHY ...... 12 ¸4HUHNLTLU[KVLZU»[[HRLJVU[YHJ[THUHNLTLU[ZLYPV\ZS`¹ ...... 13 (\[VTH[PVUHUKƚLJOUVSVN` ...... .....14 Consequences of Đhange ...... ...15 7YVJLZZƐRPSSZHUKŽYNHUPaH[PVU ...... ...... 15 Preparing for the future ...... 15 Process ...... 15 :RPSSZ ...... 6YNHUPaH[PVU ...... 18 /VWLVU[OLOVYPaVU ...... 20 *VUJS\KPUN[OV\NO[Z ...... 21 :V^OLYLUL_[& ...... 21 The ten most important issues ...... 21 5L^[LJOUVSVNPLZUL^ZRPSSZ ...... 22 :\TTHY` ...... 22

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3 ;OL-\[\YLVM*VU[YHJ[HUK*VTTLYJPHS4HUHNLTLU[

Introduction

There are some who argue that contracting has no ;LJOUVSVN`UV^LUHISLZ\UWYLJLKLU[LKHUHS`ZPZVMJVU[YHJ[ future. They believe that automation will largely eliminate JVU[LU[ HUK WYVJLZZ WYV]PKPUN THUHNLTLU[ PUZPNO[ [V the need for human activity in designing, preparing, [YLUKZ IHYYPLYZ HUK ZV\YJLZ VM ]HS\L 0[ PZ [YHUZMVYTPUN negotiating and managing contracts. In large measure, JVU[YHJ[PUNMYVTHUHJ[P]P[`HZZVJPH[LK^P[OZWLJPHSPZ[VWPUPVU they are right; key aspects of the contracting process [V H TVYL ZJPLU[PÄJ KPZJPWSPUL IHZLK VU MHJ[Z ;OPZ TLHUZ will be undertaken through technology. But as this report [OH[P[PZL]VS]PUNPU[VHZVWOPZ[PJH[LKTL[OVKVMPU[LNYH[PUN reveals, technology will change – and enrich – human KPZJPWSPULZHJYVZZ[OLI\ZPULZZLU[LYWYPZLHUKIL`VUK intervention in the contracting process, rather than ;OPZYLWVY[PZHU\WKH[L[V[OLLKP[PVUVMº;OL-\[\YL replace it. VM *VU[YHJ[PUN» 0[ YL]LHSZ [OL JVU[PU\LK PTWHJ[ VM NSVIHS 0U[OLM\[\YLJVU[YHJ[PUNHJ[P]P[`^PSSMVJ\ZMHYTVYLVUHYLHZ JVTTLYJPHS HUK [LJOUPJHS [YLUKZ HUK JVUÄYTZ OV^ [OL Z\JO HZ RUV^SLKNL HWWSPJH[PVU JVTTLYJPHS PUUV]H[PVU WHJL VM JOHUNL PZ PUJYLHZPUN 4HYRL[ L_WLJ[H[PVUZ HUK I\ZPULZZ Q\KNTLU[ NYHWOPJ KLZPNU HUK ILOH]PVYHS JVTWL[P[P]L WYLZZ\YLZ KLTHUK MYLZO YLZWVUZLZ MYVT LJVUVTPJZ ;OL NYV^PUN ^H]L VM HJHKLTPJ HUK L_LJ\[P]L Z\WWSPLYZ HUK NYLH[LY ZVWOPZ[PJH[PVU PU I\`LYZ (Z H YLZ\S[ PU[LYLZ[ PU [OL KPZJPWSPUL ^PSS [\YU [V H Z\YNL HZ JVU[YHJ[Z ºJVTTLYJPHS JVTWL[LUJL» HUK ºJVU[YHJ[ THUHNLTLU[ HUK [OL YPJO KH[H ZV\YJLZ [OL` JVU[HPU ILJVTL Z[LHKPS` JHWHIPSP[`»HYLNHPUPUN^PKLZWYLHKYLJVNUP[PVUMVY[OLPYJYP[PJHS TVYL]PZPISL6]LY[OLUL_[`LHYZJVU[YHJ[Z^PSSUV[VUS` JVU[YPI\[PVU[VI\ZPULZZYLZ\S[ZHUKV\[JVTLZ¶HќVYKHIPSP[` ILYLJVNUPaLKHZJYP[PJHSI\ZPULZZHZZL[ZI\[^PSSZ[HY[[VIL ]HS\LX\HSP[`HUKÅL_PIPSP[`*VU[YHJ[PUNPUJYLHZPUNS`VWLYH[LZ [YLH[LKHJJVYKPUNS` HZHTHUHNLTLU[[VVSMVYPU[LNYH[PVUPUI\ZPULZZVWLYH[PVUZ HUKMVYPU[LNYP[`PUI\ZPULZZWYHJ[PJLZ

The biggest change I expect to see by Business is struggling to adapt to a 2020 is that the focus will be on the networked world in which digitization results of contracting as opposed to the is fundamentally disrupting trading process of contracting. relationships, business capabilities SVP, Global Strategy, Oil and Gas and the terms of trade. Contract management sits at the nexus of these forces and is transforming from a largely administrative task to a dynamic role :OPM[Z PU YPZR HSSVJH[PVU UL^ ÄUHUJPHS HUK ÄUHUJPUN TVKLSZ that orchestrates change and makes sophisticated approaches to performance monitoring – these are sense of market volatility. L_HTWSLZVM[OLHYLHZ^OPJOOH]LKYP]LUJOHUNLPUJVU[YHJ[PUN Input to UK Public Accounts Committee, April 2016 [LYTZWYVJLZZLZHUKZRPSSZ:\JO[YLUKZHYLHJJLSLYH[PUNMHZ[ WYVWLSSLK I` KPNP[PaH[PVU HUK PU[LSSPNLU[ Z`Z[LTZ *VU[YHJ[Z HYLPUOV[W\YZ\P[^P[OYHWPKTV]LTLU[[V^HYKZWLYMVYTHUJL HUK V\[JVTLIHZLK HNYLLTLU[Z HUK WH`TLU[ MVY YLZ\S[Z +LZPNUPUNHUKTHUHNPUN[OLZLUL^HNYLLTLU[ZYLX\PYLZMYLZO ZRPSSZHUKYLLUNPULLYLKWYVJLZZLZIV[O^P[OPUHUVYNHUPaH[PVU HUK¶TVYLJYP[PJHSS`¶IL[^LLUVYNHUPaH[PVUZ

4 +LMPUP[PVUVMCVU[YHJ[ • “Commercial Management”PZ[OLHJ[P]P[`ÔPJOKLÄULZ [OL V]LYHYJOPUN WVSPJPLZ HUK WYHJ[PJLZ [OH[ WYV]PKL H vs. Commercial Management MYHTL^VYRMVY[YHKPUNYLSH[PVUZOPWZ 6UL VM [OL [OPUNZ [OH[ YLTHPUZ JVUM\ZPUN MVY THU` PZ [OL • “Contract Management”PZ[OLKPZJPWSPUL[OYV\NOÔPJO PU[LYJOHUNLHIPSP[`VM[OLQVI[P[SL"HYL`V\H*VU[YHJ[4HUHNLY [OVZL WVSPJPLZ HUK WYHJ[PJLZ HYL PTWSLTLU[LK HUK ^P[OPU VYH*VTTLYJPHS4HUHNLY& ÔPJOPUKP]PK\HS[YHUZHJ[PVUZHYLHNYLLKHUKWLYMVYTLK (Z [OL NSVIHS HZZVJPH[PVU MVY JVU[YHJ[ HUK JVTTLYJPHS The experience and data from contract management are THUHNLTLU[^LMLS[P[PTWVY[HU[[VJSHYPM`H[[OLV\[ZL[[OL [OLU\ZLK[VPUMVYTJVTTLYJPHSWVSPJPLZHUKWYHJ[PJLZ¶ÔH[ KLÄUP[PVUZ[OH[^LOH]LH[[YPI\[LK[V[OLZLHUKÔPJOZOV\SK ^VYRZ"ÔH[KVLZUV[^VYR"ÔH[ULLKZ[VJOHUNL be used in interpreting this report.

5 ;OL-\[\YLVM*VU[YHJ[HUK*VTTLYJPHS4HUHNLTLU[

Expectations of Hhange

6]LY[OLJLU[\YPLZJVTTLYJPHSHUK[LJOUPJHSPUUV]H[PVUZOH]LHS[LYLK[OLMVYTHUKJVU[LU[VMJVU[YHJ[Z;OL^VYSK^LU[MYVT WHYJOTLU[HUKX\PSSWLUZ[VKPNP[HSJYLH[PVUHUKLZPNUH[\YLZ"MYVTZPTWSLVYKLYMVYTZ[V]VS\TPUV\ZV\[ZV\YJPUNHNYLLTLU[Z

How do you think approaches to contracting will change?

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Performance or Evaluation of the Collaborative Focus on agility/ Payment by outcome-based balance between planning and flexibility (including results contracting risk and reward negotiation Agile contracts)

LessAbout the same More

;OLYLPZ\UKV\I[LKS`^PKLZWYLHKL_WLJ[H[PVUVMJVU[PU\LK LU]PYVUTLU[VMNYLH[LY\UJLY[HPU[`KYP]PUN[OLULLKMVYTVYL HUKYHWPKJOHUNL¶HUKPUKLLKZPUJLV\YSHZ[Z\Y]L`PU HNPSLVYÅL_PISLJVU[YHJ[TVKLSZ ZVTLVM[OLZLJOHUNLZOH]LZ[HY[LK[VVJJ\Y/V^L]LY[OL 6]LYHSS[OLZLKL]LSVWTLU[ZYLX\PYLPTWYV]LKHWWYVHJOLZ[V WHJLOHZILLUZSV^HZHYLZ\S[VMSPTP[LKZ\WWVY[MYVT[OL WSHUUPUNHUKULNV[PH[PVUHUKHKPќLYLU[IHSHUJLPUYPZRHUK H]HPSHISL [LJOUVSVN` JVUZ[YHPU[Z PTWVZLK I` OPZ[VYPJ ZRPSSZ YL^HYK¶MHJ[VYZ[OH[HYLL_WSVYLKPUNYLH[LYKLW[OSH[LYPU HUKTLHZ\YLTLU[Z`Z[LTZHUK]HYPHISLH[[LU[PVUMYVTZLUPVY this report. management. ;OLYL PZ L_[LUZP]L ILSPLM MYVT IV[O I\`LYZ HUK Z\WWSPLYZ Contracts and Relationships [OH[ JVTTLYJPHS HYYHUNLTLU[Z ^PSS JVU[PU\L [V ZOPM[ H^H` MYVT [OL VSK ^VYSK VM ºJH]LH[ LTW[VY» [V HU LU]PYVUTLU[ ^OLYLZ\WWSPLYZ^PSSHJJLW[NYLH[LYYLZWVUZPIPSP[`MVYYLZ\S[Z 0UKLLK ^L ZLL L]PKLUJL VM [OPZ HSYLHK` PU [OL NYV^[O VM It isn’t contracts that have problems it’s SLNPZSH[PVU [OH[ WYVTV[LZ JVUZ\TLY YPNO[Z HUK [OL Z[LHK` relationships.

PMZVTL^OH[NY\KNPUNHJJLW[HUJLI`I\ZPULZZLZ[OH[[OL` Japanese Law Professor T\Z[ILJVTLPUJYLHZPUNS`HKLW[H[THUHNPUNHSSHZWLJ[ZVM [OLPYYLW\[H[PVU(ZPHUH[[P[\KLZHYLPUJSPULK[V]PL^YPZRHZ HU VWWVY[\UP[` HUK [OPZ ^PSS OH]L PUJYLHZPUN PUÅ\LUJL HUK 3VVRPUN MVY^HYK JVU[YHJ[Z HYL PUJYLHZPUNS` KLZJYPILK HZ PTWHJ[VU[OLJVTWL[P[P]LSHUKZJHWL0UHKKP[PVU[OLJOHY[ H ¸MYHTL^VYR MVY I\ZPULZZ VWLYH[PVUZ¹ 4VYL [OHU Q\Z[ YLÅLJ[Z YLJVNUP[PVU [OH[ PUUV]H[PVU HUK JOHUNL JYLH[L HU ZLTHU[PJZ[OPZPZHTV]L[V^HYKZHWVY[MVSPVVMHNYLLTLU[Z[OH[

LTILK[OLYLSH[PVUHSJVTWVULU[ZULLKLK[VHJOPL]LT\[\HS ¸9LSH[PVUHS JVU[YHJ[PUN¹ PZ [OL [LYT PUJYLHZPUNS` \ZLK [V VIQLJ[P]LZHUK[OLILOH]PVYZ[OH[JVU[YPI\[L[VZ\JJLZZ;OPZ KPZ[PUN\PZOMYVTH[YHUZHJ[PVUHSHWWYVHJOHUK[OLYLPZHZV\Y YLWYLZLU[Z[OLL]VS\[PVUMYVTHSLNHSKVJ\TLU[MVJ\ZLKVU JOHY[ ZOV^Z H ILSPLM [OH[ \ZL VM YLSH[PVUHS HNYLLTLU[Z ^PSS WLYMVYTHUJL MHPS\YL [V HU VWLYH[PVUHS HUK JVTT\UPJH[PVUZ NHPUTVTLU[\THUKLUZ\YLHYLIHSHUJPUNVM[OLHWWYVHJOLZ N\PKLÔPJO^PSSPUJYLHZPUNSÌLKPNP[HS \ZLKPUPUK\Z[Y` ;OL X\HSP[` VM [OL JVU[YHJ[PUN WYVJLZZ ^PSS IL NH\NLK I` >OLYLHZPU[OLÄYZ[KLJHKLVM[OPZJLU[\Y`[OLYL^HZHZ[YVUN P[Z Z\JJLZZ PU H]VPKPUN KPZW\[LZ HUK KPZHNYLLTLU[Z HUK ZOPM[[V^HYKZ[YHUZHJ[PVUHSHNYLLTLU[ZHUKILOH]PVYZ[OLZL KLSP]LYPUN[OLZ\JJLZZM\SV\[JVTLZLU]PZHNLKH[[OLV\[ZL[ YLZ\S[ZZOV^[OLZ^PUNIHJR[V^HYKZ]HS\PUNYLSH[PVUZOPWZ (STVZ[ L_WLJ[ [YHKPUN HJ[P]P[` [V IL ZVTLÔH[ VY ZPNUPÄJHU[S`TVYLYLSH[PVUZOPWIHZLK>OH[PZUV[HISLHUK NP]LZJYLKPIPSP[`[V[OPZWYLKPJ[PVUPZ[OLMHJ[[OH[V]LY You’re going in to a relationship that of the respondents from procurement anticipate this more you know is going to need to change YLSH[PVUHSHWWYVHJO and grow together... the richness of ;OLZ\Y]L`YLZ\S[ZYL]LHSZVTLPU[LYLZ[PUNJVU[YHZ[Z! the contracting commercial function is making it easier to do business with. I • 0U NLULYHS NV]LYUTLU[Z V\[ZPKL [OL

25.0% Much more relationship based 21.8%

21.4% Somewhat more relationship based 37.6%

14.3% No real change from today 15.0%

19.0% Somewhat more transactional 16.2%

20.2% Much more transactional 9.4%

0% 5% 10% 15% 20% 25% 30% 35% 40%

2011 2015

7 ;OL-\[\YLVM*VU[YHJ[HUK*VTTLYJPHS4HUHNLTLU[

Approach to negotiation 6\Y PU[LY]PL^Z YL]LHSLK H ZLUZL [OH[ [OPUNZ HYL Z[HY[PUN [V JOHUNL¶HUK[OPZPZYLÅLJ[LKPU[OLZPKLIHYX\V[LMYVT1VOU 2H`;OLYLJHUILSP[[SLX\LZ[PVU[OH[[OLºWYVMLZZPVUHSPaH[PVU» VM 7YVJ\YLTLU[ SLK [V H T\JO TVYL HNNYLZZP]L MVJ\Z VU WYPJPUN 0U VYKLY [V THPU[HPU P[Z KLSP]LY` VM ºZH]PUNZ» I have always had a theory that one of the 7YVJ\YLTLU[^HZMVYJLK[VHKVW[UL^[LJOUPX\LZ¶TV]PUN problems with commercial contracting [V^HYKZTVYL[YHUZHJ[PVUHSW\YJOHZPUNPUJYLHZLKMYLX\LUJ` today is that it is too dominated by VMJVTWL[P[P]LIPKKPUNPTWSLTLU[H[PVUVMZVM[^HYL[VVSZ[V the lawyers and the negotiations take Z\WWVY[ºH\J[PVUZ»KPZHNNYLNH[PVUVMWYVK\J[ZHUKZLY]PJLZ too long and create sometimes more [V Z\WWVY[ JVTTVKP[` I\`PUN .SVIHSPaH[PVU NH]L [OLZL problems than they solve. Z[LWZYLHSTVTLU[\TZPUJLP[SLK[VHKYHTH[PJL_WHUZPVU VMJOVPJLHUKJVTWL[P[PVU3V`HS[`HUKYLSH[PVUZOPWZ^LYL Senior Executive, Global BPO [OYVÛV\[VM[OL^PUKV^PUVYKLY[VNLULYH[LSV^LYPUW\[ costs. 0[PZJSLHY[OH[[VKH`^LZLLZVTLYLIHSHUJPUNVM[OPZWVZP[PVU HUKHYLHSPaH[PVU[OH[JVZ[KVLZUV[LX\HS]HS\L0UKLLKPUW\[ 4HU` ÔV YLZWVUKLK [V [OPZ Z[\K` YLÅLJ[LK VU [OL JVZ[HUKHJ[\HSJVZ[HYLHSZV]LY`KPќLYLU[¶HUK[OLHIZLUJL MYLX\LUJ` VM HK]LYZHYPHS JVU[YHJ[ ULNV[PH[PVUZ HUK [OL VM Z\WWSPLY SV`HS[` WYLMLYLUJL HUK JVSSHIVYH[PVU YLWYLZLU[Z º\UYLHZVUHISLULZZ»VM[OLV[OLYZPKL,ZZLU[PHSS`[OLPY^VYKZ H THQVY SVZZ [V THU` I\ZPULZZLZ ;OLYLMVYL V\Y Z\Y]L` PSS\Z[YH[LKHSHJRVM[Y\Z[HUKPUZVTLJHZLZHSHJRVMYLZWLJ[ ZOV^Z TV]LTLU[ [V H TVYL U\HUJLK HWWYVHJO ÔLYL

The substitution of transaction-oriented dealings for relationship contracting HKKLK[VWYVÄ[HIPSP[`PU[OLZOVY[Y\U"I\[ in the long run it eroded relationships that had been the underlying source of T\JOVM[OH[WYVÄ[HIPSP[`

John Kay, Economist, Author, Professor at London School of Economics

8 A change of appearance and construction Read the Federal Acquisition Rules? Where’s the video? >OH[^PSS[OLJVU[YHJ[VM[OLM\[\YLSVVRSPRL&(Z[OL`TV]L MYVT W\YLS` SLNHS KVJ\TLU[Z [V PUZ[Y\TLU[Z [OH[ HYL TVYL 86*6$2IƂFLDO Z\WWVY[P]LVM[OLULLKZVM\ZLYZ[OLYL^PSSILHNYLH[LYMVJ\Z VUKPNP[HS[LJOUPX\LZ¶UV[VUS`WSHPUSHUN\HNLI\[HSZVH\KPV HUK]PZ\HSHS[LYUH[P]LZ ;OL [LZ[ VM H NVVK JVU[YHJ[ ^PSS PUJYLHZPUNS` IL \UKLYZ[HUKHIPSP[` UV[ ZVSLS` P[Z LUMVYJLHIPSP[` 0U ZV MHY HZ [OLZL WYVNYLZZP]L [LJOUPX\LZ HJOPL]L [OLPY VIQLJ[P]L VM Rule number one: young people don’t ZPTWSPM`PUNJVU[YHJ[ZHUKLTILKKPUNJSHYP[`[OLU^L^PSSIL read anymore, so 50 pages of contract ZH]PUN OV\YZ VM WHPUZ[HRPUN PU[LYWYL[H[PVU I` SH^`LYZ HUK is useless. They’re very much a visual Q\KNLZVMJVTWSL_HUKHTIPN\V\Z[LYTZ generation….they don’t need 50 pages. Only lawyers read 50 pages when you’re in trouble. We will continue to see further

&DQDGLDQ*RYHUQPHQW2IƂFLDO ZPTWSPÄJH[PVUHUKZ[YLHTSPUPUN¶WLVWSL want things in smaller digestible bites. I do think there will be more use of graphic design. 7YVNYLZZ VU ]PZ\HSPaH[PVU HUK WSHPU SHUN\HNL OHZ \U[PS YLJLU[S`ILLUZSV^I\[^P[OV\[X\LZ[PVU[OLYLPZHZPNUPÄJHU[ VP, Global Technology Company KYP]LPU[OLZLKPYLJ[PVUZ(Z^LSSHZ[OLTVTLU[\T[V^HYKZ KLZPNUPUP[PH[P]LZ[OH[MHJPSP[H[LI\ZPULZZ\UKLYZ[HUKPUN[OLYL HYLHSZVLHYS`HKVW[LYZVM[LJOUVSVN`MVY[OLTHJOPULYLHKPUN VMJVU[YHJ[ZHUK\ZLVMHY[PÄJPHSPU[LSSPNLUJL

6U [OL X\LZ[PVU VM KLZPNU ZVTL KV\I[ [OH[ [OLYL ^PSS IL ^PKLZWYLHKPTWSLTLU[H[PVUHUK\ZLVM]PZ\HSJVU[YHJ[Z\U[PS [OLZLOH]LILLUTVYLM\SS`[LZ[LKPU[OLJV\Y[Z`L[V[OLYZ WVPU[V\[[OH[JV\Y[ZHYLHSYLHK`HJJ\Z[VTLK[VPU[LYWYL[PUN KYH^PUNZ HUK KLZPNUZ ¶ MVY L_HTWSL PU JVUZ[Y\J[PVU HUK LUNPULLYPUN 0U HKKP[PVU ZVJPHS HUK WVSP[PJHS [YLUKZ HYL KLTHUKPUN [OL Z[YLHTSPUPUN VM Q\Z[PJL Z`Z[LTZ (SYLHK` [OLYLPZKPZJ\ZZPVUVMVUSPULJV\Y[ZHUK^LIIHZLKKPZW\[L YLZVS\[PVUZ`Z[LTZYLÅLJ[PUN[OLULLKMVYQ\Z[PJL[VILJVTL TVYLHJJLZZPISLMHZ[LYHUKTVYLHќVYKHISL

9 ;OL-\[\YLVM*VU[YHJ[HUK*VTTLYJPHS4HUHNLTLU[

tŚĂƚĂƐƉĞĐƚƐŽĨĐŽŶƚƌĂĐƚŝŶŐǁŝůůĐŚĂŶŐĞŽǀĞƌƚŚĞŶĞǆƚĨĞǁǇĞĂƌƐ͍

34% Will there be greater use of visual techniques to improve understanding (i.e. pictures, graphs, flow charts)? 66%

20% Will there be a focus on plain langage (less legalese) and simpler design? 80%

15% Will there be more international and industry standards? 85%

25% Will Common law maintain its dominance as the frameworkfor international contracts? 75%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

No 2015 Yes 2015

Can contracts be turned into virtual reality?

Leader, Business Information Modelling Initiative, UK

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10 +YP]LYZVMHOHUNL Interdependency and the ‘virtual enterprise’ 7LYOHWZ[OLTVZ[M\UKHTLU[HSPZZ\L[OH[PZKYP]PUNJOHUNLPU :\JOJVTWSL_LU]PYVUTLU[ZYLX\PYLHKPZJPWSPULKHWWYVHJO [OLÄLSKVMJVU[YHJ[PUNPZ[OLZ[LHK`LYVZPVUVM[OL[YHKP[PVUHS [V [OLPY THUHNLTLU[ >P[OPU LU[LYWYPZLZ [OH[ KPZJPWSPUL LU[LYWYPZL -VYLJHZ[Z I` 5VILS WYPaL^PUUPUN LJVUVTPZ[ OHZILLUHJOPL]LK[OYV\NO[OLPTWSLTLU[H[PVUVMZVM[^HYL 9VUHSK*VHZLPUOPZ WHWLYº;OL5H[\YLVM[OL-PYT» WYVK\J[Z LZWLJPHSS` ,97 ,U[LYWYPZL 9LZV\YJL 7SHUUPUN HYL WYV]PUN WYLZJPLU[ /L HYN\LK [OLU [OH[ [OL PU[LNYH[LK ;OLYLPZUVLX\P]HSLU[ZVS\[PVUMVYTHUHNPUN[OLJVTWSL_P[` LU[LYWYPZL ^HZ SVNPJHS VUS` PU HU LU]PYVUTLU[ ^OLYL VM PU[LYLU[LYWYPZL YLSH[PVUZOPWZ ;OPZ PZ [OL NHW [OH[ [OL [LJOUVSVN` ^HZ SPTP[LK :PUJL [OH[ [PTL ^L OH]L ZLLU H JVU[YHJ[PUN WYVJLZZ T\Z[ \YNLU[S` IYPKNL [OYV\NO H Z[LHK`ZOPM[[V^HYKZV\[ZV\YJLKHJ[P]P[`SLHKPUN[VH^VYSK JVTIPUH[PVU VM [LJOUVSVN` HK]HUJLK JVU[YHJ[ KLZPNU HUK ^OLYLTHU`PUK\Z[YPLZZWLUKMHYTVYLVUL_[LYUHSYLZV\YJLZ PUJYLHZPUNS`ZVWOPZ[PJH[LKULNV[PH[PVU[LJOUPX\LZ [OHUVUPU[LYUHSVWLYH[PVUZ6UH]LYHNLP[ZLLTZSPRLS`[OH[ TVZ[VYNHUPaH[PVUZUV^ZWLUK¶ VM[OLPYYL]LU\LVU *VU[YHJ[Z HUK [OL JVU[YHJ[PUN WYVJLZZ VM [OL M\[\YL ^PSS L_[LYUHSZ\WWS` [OLYLMVYL WYV]PKL [OL MYHTL^VYR MVY ZOHYLK \UKLYZ[HUKPUN (ZPM[OH[JOHUNL^LYLUV[LUV\NOP[OHZILLUHJJVTWHUPLK HUK[OLVWLYH[PVUHSPU[LYHJ[PVUZVM[OLWHY[PLZ;OPZTLHUZH I`[YHUZMVYTH[PVUPU[OLZV\YJLZVMZ\WWS`^P[OHTV]LH^H` TV]LH^H`MYVT[OPURPUNHIV\[LHJOJVU[YHJ[HZHUPUKP]PK\HS MYVTSHYNLS`SVJHSZ\WWSPLYZ[VWV[LU[PHSS`NSVIHSUL[^VYRZ YLSH[PVUZOPWVY[YHUZHJ[PVU[VHUHWWYLJPH[PVU[OH[JVU[YHJ[Z [OLTZLS]LZT\Z[ILJVUULJ[LKHUKPU[LYVWLYHISL

Organizations increasingly operate as The virtual enterprise a nucleus for supply and customer An enterprise is the amalgam of networks, held together through a organizations required to deliver an agreed outcome. portfolio of interdependent contracts and relationships. First Principles whitepaper, Australian Government

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11 ;OL-\[\YLVM*VU[YHJ[HUK*VTTLYJPHS4HUHNLTLU[

A new approach and a new attitude to risk and its management >OPSLWYVNYLZZYLTHPUZZSV^[OLYLPZ^PKLZWYLHKYLJVNUP[PVU HUK[OLJYLH[P]LJVTTVUZ;OLILULÄ[VMZ\JOHWWYVHJOLZ [OH[ J\YYLU[ HWWYVHJOLZ [V YPZR THUHNLTLU[ ^P[OPU [OL ^V\SKILHTVYLPU[LSSPNLU[KPZJ\ZZPVUV]LYHJ[\HSYPZRZ[OLPY contracting process remain immature – and indeed can often SPRLSPOVVKHUKOV^[VH]VPK[OLTYH[OLY[OHU[OL[LTWSH[L ILHZV\YJLVMYPZR,_HTWSLZVM[OPZPUJS\KL[OLJVU[PU\LK KYP]LUJVTWSPHUJLMVJ\ZLKHWWYVHJOÔPJOPZJLU[LYLKVU MVJ\ZVUYPZRHSSVJH[PVU^P[OV\[YLHSJVUZPKLYH[PVUVY]HSPKH[PVU [YHUZMLYZVMYPZR VM [OL YLZWLJ[P]L HIPSP[PLZ VY TL[OVKZ YLX\PYLK [V THUHNL [OVZL YPZRZ ;OL [LTWSH[LKYP]LU HWWYVHJO [V JVU[YHJ[ [LYTZHUKJVUKP[PVUZVM[LUYLZ\S[ZPUYPNPKP[`HUKTLHUZ[OH[ Smart contract technology (based on HS[LYUH[P]L HWWYVHJOLZ HYL UV[ JVUZPKLYLK HUK \UKLYS`PUN blockchain) can circumvent regulatory JH\ZLZVMYPZRHYLPNUVYLK;OL\ZLVM[OL[LTWSH[LHJ[\HSS` infrastructures, which could reduce KPZJV\YHNLZYPZRL]HS\H[PVUHUK[O\ZILJVTLZP[ZVÛYPZR JVZ[Z MVY ÄUHUJPHS [YHUZHJ[PVUZ (U ;OV\NO[SLHKLYZ L_WLJ[ JOHUNL HUK PKLU[PM` [OL PZZ\LZ VM important feature of a smart contract is NYV^PUNPU[LYKLWLUKLUJLIL[^LLUVYNHUPaH[PVUZKLZJYPILK the ability to reduce risk through non- HIV]LHZHRL`KYP]LYPUYHPZPUN[YHUZWHYLUJ`ZOHYPUNKH[H discriminatory execution. The lack of a HUK^VYRPUNVUQVPU[WYVISLTZVS]PUN0UVYKLY[VZHMLN\HYK WLYMVYTHUJL YPZRZ T\Z[ IL THUHNLK VY LSPTPUH[LK UV[ central counterparty agent can enable ZPTWS` [YHUZMLYYLK ;OLZL L_WLJ[H[PVUZ WVPU[ [V PUJYLHZLK such contracts to service markets with \ZL VM ZOHYLK YPZR YLNPZ[LYZ Z\WWSPLYZ ÔV KPќLYLU[PH[L NYLH[LYLѝJPLUJ` [OYV\NO Z\WLYPVY YPZR THUHNLTLU[ JHWHIPSP[PLZ HUK H ^PKL Elliot Maras, CryptoCoin News ILSPLM [OH[ [OL UL_[ NLULYH[PVU VM ZVM[^HYL [VVSZ ^PSS IL KLZPNULK [V VWLYH[L HJYVZZ VYNHUPaH[PVUHS IV\UKHYPLZ UV[ ^P[OPU[OLT :\JO JOHUNLZ ^PSS IL KYP]LU I` H ZOPM[ PU [OL MVJ\Z VM )\`LYZHUKZLSSLYZOH]LHS^H`ZLUNHNLKPUULNV[PH[PVUZV]LY THUHNLTLU[[LHTZHUKM\Y[OLYTH[\YPUNVM[OL[LJOUVSVN` YPZR I\[ NYV^PUN JVTWL[P[PVU YLN\SH[PVU HUK JVTWSL_P[` ZLJ[VYLZWLJPHSS`PUHYLHZZ\JOHZHY[PÄJPHSPU[LSSPNLUJL0[PZ HS[LYLK [OL ZL]LYP[` VM [OL YPZRZ MHJLK HUK [\YULK THU` PU[LYLZ[PUN[VUV[L[OLYLSH[P]LZWLLKVMPUUV]H[PVUHUK[OL ULNV[PH[PVUZ PU[V H IH[[SL V]LY YPZR HSSVJH[PVU ;OPZ Z[LYPSL LU[O\ZPHZTILPUNZOVÛLZWLJPHSSÌ`SLHKLYZPU[OLSLNHS HWWYVHJO PZ PUJYLHZPUNS` ILPUN X\LZ[PVULK HUK [^V JSLHY WYVMLZZPVU HUK PU ¸Z[YLZZLK¹ PUK\Z[YPLZ Z\JO HZ ÄUHUJPHS HWWYVHJOLZHYLLTLYNPUN! ZLY]PJLZ • :\WWSPLYZ HYL KL]PZPUN UL^ VќLYPUNZ PU ÔPJO [OL` [HRL NYLH[LYYLZWVUZPIPSP[`MVYV\[W\[ZVYV\[JVTLZ Traditional risks won’t disappear • ;OLYLPZNYV^PUNPU[LYLZ[TVZ[L]PKLU[PUSLNHS[LHTZPU IV[O I\`LY HUK ZLSSLY VYNHUPaH[PVUZ [V KL]LSVW HNYLLK >OPSL ZVTL [OPUNZ OH]L JOHUNLK V[OLYZ OH]L YLTHPULK PUK\Z[Y`Z[HUKHYKZ [OL ZHTL ,HJO `LHY 0(**4 JVUK\J[Z H Z\Y]L` VM [OL TVZ[ ULNV[PH[LK [LYTZ ;OL [VWPJZ ^L ZWLUK [OL TVZ[ :[HUKHYKZHYLUV[UL^HUKWHZ[HWWYVHJOLZHYLWYVISLTH[PJ [PTL ULNV[PH[PUN YLTHPU [OVZL MVJ\ZLK VU YPZR HSSVJH[PVU ;OL` OH]L [LUKLK [V IL PUÅL_PISL HUK KV UV[ HNL ^LSS LZZLU[PHSS` \UHS[LYLK MYVT [OVZL ^L ^LYL ULNV[PH[PUN ;OL [PTL HUK LќVY[ [V THRL HKQ\Z[TLU[Z VM[LU SLH]LZ `LHYZHNV0UTHU`PUZ[HUJLZP[HWWLHYZ[OH[V\YKYHTH[PJHSS` [OLT V\[KH[LK HUK PUJYLHZPUNS` PYYLSL]HU[ ¶ PU [OLTZLS]LZ HS[LYLK I\ZPULZZ YLHSP[` PZ VU H JVSSPZPVU JV\YZL ^P[O V\Y [OLYLMVYLHZV\YJLVMYPZR0UH^VYSKVMTVYLZVWOPZ[PJH[LK OPZ[VYPJY\SLZHUKWYHJ[PJLZ [LJOUVSVN` MYLZO HWWYVHJOLZ HYL WVZZPISL ;OL UL^ Z[HUKHYKZTHÌLTVYLYLÅLJ[P]LVMJVYLWYPUJPWSLZKYH^PUN (JRUV^SLKNPUN[OLULLKMVYUL^[OPURPUNHZPKL[OL[YHKP[PVUHS VUJSH\ZLSPIYHYPLZ[OH[PUJS\KL[LYTVW[PVUZVYMHSSIHJRZ[V YVSL VM JVU[YHJ[Z PU YPZR HSSVJH[PVU HUK ULNV[PH[PVU ^PSS UV[ NV Z\WWVY[ HS[LYUH[P]L ULNV[PH[LK WVZP[PVUZ

12 JSH\ZLZYLSH[LK[VYPZRJVUZLX\LUJLI\[HZ[OLJOHY[ZOV^Z YPZRZ¹ Z\JO HZ J`ILYZLJ\YP[`HYL UV[HISL VU [OPZ SPZ[ HUK HYL [OLPZZ\LZYLSH[LK[VHZZL[WYV[LJ[PVUHUKYLN\SH[VY`JVTWSPHUJL HSZVOPNOVU[OLJVYWVYH[LHNLUKHHZHUHYLHYLX\PYPUNPUK\Z[Y` ^PSSJVU[PU\L[VILHUPTWVY[HU[LSLTLU[PUJVU[YHJ[PUN¸5L^ standard approaches.

+V`V\L_WLJ[ZPNUPÄJHU[JOHUNLZ[V[LYTZHUKJVUKP[PVUZ and the approach to their negotiation?

Change anagement R 62% 38%

Contrast scope or goals 60% 40%

Intellectual roperty U 53% 47%

Data protection, yber security H 87% 13%

Governance, information sharing, audit 63% 37%

Performance undertakings, measurements 77% 23%

Jurisdiction, nature or rewards 39% 61%61%

Penalties or rewards 61% 39%

Risk allocations (liabilities, indemnities) 57% 43%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

YES NO

“Management doesn’t take contract management seriously” 0U [OL <2»Z 5H[PVUHS (\KP[ 6ѝJL YLWVY[LK VU [OL ;VKH` JVU[YHJ[Z HUK [OL JVU[YHJ[ THUHNLTLU[ YVSL T\Z[ JOHSSLUNL MHJPUN NV]LYUTLU[ HZ P[ ZLLRZ [V YLMVYT W\ISPJ LUHISL K`UHTPJ ZOPM[Z PU THYRL[ JVUKP[PVUZ HUK I\ZPULZZ ZLY]PJLZ 0[Z VIZLY]H[PVU [OH[ ¸THUHNLTLU[ KVLZU»[ [HRL ULLKZ [OYV\NO TVYL HNPSL TVKLSZ ;OPZ PZZ\L VM HNPSP[` PZ JVU[YHJ[THUHNLTLU[ZLYPV\ZS`¹KVLZUV[VUS`HWWS`[V[OL ^PKLS` YLJVNUPaLK I` Z\Y]L` YLZWVUKLU[Z HSVUN ^P[O [OL W\ISPJZLJ[VY*VU[YHJ[THUHNLTLU[OHZSVUNILLU]PL^LK ULLKMVYUL^JVU[YHJ[MYHTL^VYRZ[OH[MVJ\ZVUV\[JVTLZ HZ H [YHUZHJ[PVUHS HUK SHYNLS` HKTPUPZ[YH[P]L HJ[P]P[` ^P[OPU and performance. TVZ[ VYNHUPaH[PVUZ PU RLLWPUN ^P[O [OL VSK JVUJLW[ VM H :\Y]L`YLZWVUKLU[ZRUV^[OH[JVU[YHJ[THUHNLTLU[T\Z[ JVU[YHJ[¶HKY`K\Z[`KVJ\TLU[[OH[ZP[ZPUHKYH^LY\U[PS PTWYV]LI\[PUVYKLY[VPTWYV]L[OLYLT\Z[ILNYLH[LYJSHYP[` [OLYLPZHKPZW\[LVYZVTLVULYLHSPaLZP[ZOV\SKILYLUL^LK of purpose.

13 ;OL-\[\YLVM*VU[YHJ[HUK*VTTLYJPHS4HUHNLTLU[

:PTWSPÄJH[PVU PZ H THQVY L_WLJ[H[PVU [OH[ KLYP]LZ MYVT H\[VTH[PVU 0U M\[\YL [OVZL YLZWVUZPISL MVY JVU[YHJ[Z ^PSS I am told my commercial and contract IL L_WLJ[LK [V MVJ\Z VU ZPTWSPM`PUN [OL \ZLY L_WLYPLUJL Z[HќHYLYLHSSÌ\Z`¯I\[0YLHSS`KVU»[ ÔPJOPZ]LY`KPќLYLU[MYVTTLYLS`^YP[PUNZOVY[LYJVU[YHJ[Z know what they do. VY\ZPUNZPTWSLYSHUN\HNL0[PZPU[OPZJVU[L_[[OH[WYVJLZZ KLZPNU HUK KPNP[HS [LJOUVSVNPLZ ^PSS Z[LHKPS` [YHUZMVYT [OL CEO, Aerospace and Defense appearance and use of contracts. ;V KH[L [OL THQVY IYLHR[OYV\NOZ VU ZLSS ZPKL JVU[YHJ[PUN OH]L ILLU PU [OL \ZL VM T\S[P W\YWVZL [VVSZ ^VYK WYVJLZZPUN LSLJ[YVUPJ KVJ\TLU[ L_JOHUNL HUK Z[VYHNL HUKYL[YPL]HS^VYRÅV^HUK[OLZSV^HKVW[PVUVMLSLJ[YVUPJ What is contract management supposed ZPNUH[\YLZ;OLWYVJ\YLTLU[ZPKLOHZILULÄ[[LKMYVT[VVSZ to do? Is it about risk, compliance, KLZPNULKZWLJPÄJHSS`MVYWYVJ\YLTLU[HZ^LSSHZPU[LNYH[PUN business controls, revenue or margin TVYL SVNPJHSS` HUK ZLHTSLZZS` PU[V Z[HUKHYK ,97 Z`Z[LTZ improvement, cost reduction? Perhaps /V^L]LYPUNLULYHS[OLZVM[^HYLJYLH[LK[VTHUHNLJVU[YHJ[Z P[PZHSSVM[OVZL[OPUNZ¶I\[YPNO[UV^PU OHZILLU\UPTHNPUH[P]LHUKOHZZV\NO[[VH\[VTH[LL_PZ[PUN processes, rather than transform them. too many cases, it seems to be whatever the individual contract manager believes .V]LYUTLU[ZPUWHY[PJ\SHYHYLH[[OLMVYLMYVU[VMJOHUNL( it to be. YLJLU[L_HTWSLJVTLZMYVT[OL<:+LWHY[TLU[VM+LMLUZL ÔLYL [OL *OHPYTHU VM [OL (YTLK :LY]PJLZ *VTTP[[LL CEO, Telecoms and Technology Consulting Group VIZLY]LK[OH[[OLSLUN[OHUKJVTWSL_P[`VM[OLYLN\SH[PVUZ NV]LYUPUN WYVJ\YLTLU[ OH]L ¸TV]LK IL`VUK [OL HIPSP[` VM O\THUZ [V THUHNL VU [OLPY VÛ¹ (Y[PÄJPHS 0U[LSSPNLUJL Z`Z[LTZHYLUVÎLPUNKLWSV`LK[VZ\WWVY[[OLHJX\PZP[PVU WYVJLZZHUKZWLLKKLJPZPVUTHRPUN Automation and technology >OPSLV\YZ\Y]L`YLZWVUKLU[ZJVUÄYT[OH[[OLHKVW[PVUVM [LJOUVSVN` PU JVU[YHJ[PUN PZ SPTP[LK THU` MLLS [OH[ [OPZ PZ ;LJOUVSVN`JVU[PU\LZ[VKYP]LM\UKHTLU[HSJOHUNLPUZVJPL[` HSYLHK` JOHUNPUN 0UKLLK [OL L_HTWSL VM [OL <: TPSP[HY` HUK PU ÔH[ ZVJPL[` JHU HJOPL]L @L[ [LJOUVSVN` PZ YH[OLY JP[LK HIV]L PZ HU PUKPJH[VY VM Z\JO JOHUNL ;OL HK]LU[ SH[L PU PUÅ\LUJPUN[OL^VYSKVMJVU[YHJ[ZH[SLHZ[PU[LYTZ VMTVYLWV^LYM\S[VVSZHUHSàPUNSHYNLZL[ZVMKH[HPZUV^ VMOV^[OL`HYLMVYTLKTHUHNLKHUKJVTT\UPJH[LK;^V Z\WWSLTLU[LKI`NYV^PUNKPZJ\ZZPVUHIV\[UL^[LJOUVSVNPLZ THQVY PUÅ\LUJLZ^PSSIL[OLULLK[VKLZPNUJVU[YHJ[ZHUK Z\JO HZ ISVJRJOHPU ÔPJO TH` VWLYH[L PU H IHJR VѝJL JVU[YHJ[PUNWYVJLZZLZ^P[O\ZLYZPUTPUKHUK[OLZVJPHSHUK LU]PYVUTLU[HUKIL[YHUZWHYLU[[VH\ZLY¯HUK[OLL]LU WVSP[PJHSKLTHUKZMVYPUJYLHZLK[YHUZWHYLUJ` TVYLL_JP[PUNWVZZPIPSP[PLZJYLH[LKI`(Y[PÄJPHS0U[LSSPNLUJL

Law schools are equipping tomorrow’s The technology cycle is faster than it’s lawyers to be twentieth century ever been, and is speeding up. If it takes UV[ [^LU[`ÄYZ[ JLU[\Y` SH^`LYZ¯ `LHYZ [V ÄLSK [OL UL_[ HPYWSHUL VY Information technologies can and should ship, it’s going to be out of date by the streamline and sometimes even overhaul time it gets there. traditional methods of practicing law. Chairman, US Armed Services Committee President of the Society for Computers and law, IT adviser to the UK’s lord chief justice

14 Consequences of Hhange Process, skills and Organization (Z[OLJOHY[ZOV^Z[LJOUVSVN`^PSS\UKLYWPU[OPZZOPM[ZPUJL P[WYV]PKLZ[OLHIPSP[`[VYLSLHZLHUK[OLUTHPU[HPUVWLYH[PVUHS +LSP]LYPUN KPZ[PUJ[P]L JVTTLYJPHS JHWHIPSP[PLZ KLTHUKZ N\PKHUJL HUK Z[HUKHYKZ ÔPSL LUHISPUN JVU[PU\LK PUZPNO[ KPќLYLU[PH[LK HUK PUUV]H[P]L JVU[YHJ[ JVTTP[TLU[Z HUK [VKLJPZPVUZHUKHJ[PVUZ/V^L]LYZ\JJLZZPU[YHUZMVYTPUN [OL JHWHIPSP[` [V V]LYZLL [OLPY WLYMVYTHUJL 0U HKKP[PVU L_PZ[PUNWYVJLZZLZKLWLUKZ\WVUSLHKLYZOPWHUKTVYL[OHU [V [OL VI]PV\Z WYLZZ\YL [OPZ WSHJLZ VU ZRPSSZ [OL M\[\YL VM VM[OVZLYLZWVUKPUNMLLS[OH[[OPZPZJ\YYLU[S`HIZLU[VY JVU[YHJ[PUNHSZVYLX\PYLZUL^[OPURPUNVUVYNHUPaH[PVUHUK SHJRPUNPU[OLPYVYNHUPaH[PVU measurements of success. 4VZ[VYNHUPaH[PVUZOH]LJSLHYS`Z[H[LKZ[YH[LNPLZHUK]HS\LZ [VHJOPL]L[OLPYVIQLJ[P]LZ/V^L]LYTHU`VM[OLZLZHTL Preparing for the future VYNHUPaH[PVUZKVUV[OH]LJSLHYHJJV\U[HIPSP[`HUKVÛLYZOPW MVY [OL TPZZPVUJYP[PJHS YVSL VM [OL JVU[YHJ[PUN WYVJLZZ Process >P[OUVV]LYHSSVÛLY[OLYLPZSP[[SLVYUVHJJV\U[HIPSP[`VY (ZOPNOSPNO[LKLSZLÔLYLPU[OLYLWVY[KPNP[PaH[PVUKLTHUKZ H\[OVYP[`[VLUZ\YL[OH[JVU[YHJ[ZHUKJVU[YHJ[THUHNLTLU[ ZPTWSPÄJH[PVUHUKWYVJLZZLZ[OH[HYLKLZPNULKMVY\ZLYZ;OL JHWHIPSP[` HYL Ä[ MVY W\YWVZL HUK OLSWPUN [V HJOPL]L [OL JOHY[ILSV^PUKPJH[LZIYVHKHJJLW[HUJLHUK\UKLYZ[HUKPUN I\ZPULZZVIQLJ[P]LZ VM[OPZULLK/V^L]LYYHWPKWYVNYLZZPZILPUNPTWLKLKI` [OL HIZLUJL VM JSLHY WYVJLZZ VÛLYZOPW HUK [OL IHYYPLYZ JYLH[LKI`T\S[PWSLZ[HRLOVSKLYPU[LYLZ[NYV\WZ

48.9%

To what extent will technology Some Extent allow increased empowerment or greater decentralization of

contract management? Large Extent

Minor Extent 35.2% 9.3%

No Extent

6.6%

15 ;OL-\[\YLVM*VU[YHJ[HUK*VTTLYJPHS4HUHNLTLU[

Skills *LY[HPUS`PMHZWPYH[PVUZHYV\UKYLWVY[PUNSPULHYL[VILYLHSPaLK ,ќLJ[P]L JVU[YHJ[PUN OHZ HS^H`Z KLWLUKLK \WVU H OVSPZ[PJ ZLLILSV^[OLM\UJ[PVUT\Z[ILJVTLTVYLJYLH[P]L9H[OLY HWWYVHJONH[OLYPUNHUKYLJVUJPSPUN[OLPU[LYLZ[ZVMT\S[PWSL [OHUHMVJ\ZVUPKLU[PM`PUNYPZRZHUKTVUP[VYPUNJVTWSPHUJL Z[HRLOVSKLYZ [V HJOPL]L [OL ILZ[ ZVS\[PVU ;OPZ YLX\PYLZ P[^PSSULLK[VVќLYJYLH[P]LPKLHZHUKZVS\[PVUZ[OH[NLULYH[L IHSHUJPUN[OLULLKZMVYJVTWSPHUJLHUKJVU[YVS^P[O[OVZL JVTWL[P[P]LHK]HU[HNLHUKYHPZLÄUHUJPHSWLYMVYTHUJL;OPZ MVYJYLH[P]P[`HUKZWLLK YLX\PYLZºKPZ[PUJ[P]LJHWHIPSP[PLZ»¶ÔPJOPUTHU`JHZLZ^PSS IL[OLHIPSP[`[V[HRLVUJVTTP[TLU[ZHUKHKK]HS\LPU^H`Z (Z[OLNYHWOPJILSV^ZOV^Z[OLL_PZ[PUNJVTT\UP[`SHYNLS` [OH[ V[OLY VYNHUPaH[PVUZ JHUUV[ KV ;OPZ ^PSS IL HJOPL]LK ILSPL]LZP[OHZ[OLZRPSSZULLKLK[VHKQ\Z[P[ZYVSLMVY[OLM\[\YL [OYV\NOKPќLYLU[PH[LKMVYTZVMJVU[YHJ[HUKJVU[YHJ[[LYTZ /V^L]LY [OL L_WLY[Z ^L PU[LY]PL^LK HYL TVYL KV\I[M\S VќLYLK[VJ\Z[VTLYZHUK^PSSILLUHISLK[OYV\NOZLSLJ[PVU ,X\HSS`ÔPSL HYL¸]LY`JVUÄKLU[¹[OH[[OL`WLYZVUHSS` HUKWHY[ULYPUN^P[OPUUV]H[P]LZ\WWSPLYZHUKZ\WWSÙL[^VYRZ HYLWYLWHYLKMVY[OLKLTHUKZVM[OLM\[\YL[OH[KYVWZ[VVUS` 0[PZ[OPZSH[[LYULLK[OH[PZYHWPKS`YHPZPUN[OLPTWVY[HUJLVM ÔLUHZRLKHIV\[[OLYLHKPULZZVM[OLPYJVSSLHN\LZ JVU[YHJ[PUNHUKJVTTLYJPHSZRPSSZMVY[OVZLPUWYVJ\YLTLU[ :\Y]L` YLZWVUZLZ HSZV Z\NNLZ[ [OH[ MHY [VV THU` VM [OL >OLUP[JVTLZ[VZ\JJLZZ[OVZLJOHYNLK^P[OYLZWVUZPIPSP[` PUJ\TILU[JVTT\UP[`YLTHPUJVU]PUJLK[OH[HJVU[YVSHUK MVYJVU[YHJ[ZHUKJVTTLYJPHSTHUHNLTLU[^PSSPUJYLHZPUNS` JVTWSPHUJLYVSLYLTHPUZ]HS\HISLMHPSPUN[VHWWYLJPH[L[OH[ IL TLHZ\YLK VU [OLPY LќLJ[P]LULZZ PU LTWV^LYPUN [OPZPZVULVM[OLÄYZ[HYLHZ[OH[^PSSILYLWSHJLKI`[LJOUVSVN` VYNHUPaH[PVUHS WLYMVYTHUJL HUK KLSP]LYPUN YLX\PYLK V\[JVTLZ;OPZKLTHUKZHTV]LMYVTHYVSLVMºYL]PL^HUK HWWYV]HS»[VILJVTPUNºI\ZPULZZLUHISLYZ» (ZWYL]PV\ZS`TLU[PVULKSLHKLYZOPWZRPSSZHYLHSZVHTHQVY KLWLUKLUJ` (S[V 7HY[ULYZ L_LJ\[P]L ZLHYJO ÄYT Z\NNLZ[ [OLZL KLWLUK \WVU ¸3LHYUPUN (NPSP[`¹ H[ IV[O HU PUKP]PK\HS HUKM\UJ[PVUHSSL]LS 6]LYHSSOV^JVUÄKLU[ do you feel that you

personally are prepared Little confidence for the demands of the 5.5% next 5 years? Somewhat confident 44.5%

Very confident 50.0%

My commercial team needs to I am looking for people with a digital \UKLYZ[HUK V\Y I\ZPULZZ VIQLJ[P]LZ" 0 mindset and the ability to carry out recognize that they need to manage risk ZVWOPZ[PJH[LK ÄUHUJPHS HUK VWLYH[PVUHS I\[T\Z[KVZV^P[O[OLPYL`LZÄYTS`ZL[ modeling. on desired outcomes. Deputy General Counsel, Financial Services CEO, Aerospace and Defense

Identifying and Developing Learning Agility

Learning Agility Learning Agility Enablers Derailer ;OPZJOHY[ZOV^Z[OLJYP[PJHS LUHISLYZHUK[OLZLOH]LILLU YLPUMVYJLKI`[OL]PL^ZVML_WLY[Z ^OVTHUHNLSHYNLVYNHUPaH[PVUZ [LHJOHUKOPYLWLVWSL[VKH`!

INNOVATING REFLECTING Growth mindset. Self aware. Challenges Actively seeks status quo. feedback. Communication capabilities HUK LќLJ[P]L YLSH[PVUZOPW management are funda- mental to the success of our Fixed mindset. DEFENDING Defensive when business. challenged.

VP Supply Management, Oil and Gas

PERFORMING Observation and ‘Progressive risk taker’. listening skills. RISKING Comfortable Embraces under pressure. failure.

0[»ZHT\S[PMHJL[LKYVSL" it requires not only the understanding of the contracts themselves, but an understanding of the bigger picture, the strategy, the Seek out new Counterfactual Acknowledge relationships that are solutions: thinking: failures. established by the ‘What else?’ ‘What if?’ Capture lessons. ‘Why not?’ Ask, and act on, agreements and the Identify patterns regular feedback. PERFORMING metrics that we need to in complex INNOVATING Take stretch REFLECTING situations and assignments, get the most out of our transferable no guarantee contract portfolio. insights. of success.

Commercial Director, Telecoms Alto Partners - 2016

17 ;OL-\[\YLVM*VU[YHJ[HUK*VTTLYJPHS4HUHNLTLU[

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Contracts today provide a framework for business operations.

Deputy General Counsel, Technology

20 *VUJS\KPUN[OV\NO[Z

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Automation/new technologies 4.07

Managing data and data analysis 4.04

Innovation (commercial models, terms & conditions) 4.00

Building collaborative networks 3.99

Managing contract change 3.96

Simplification 3.93

Cost cutting 3.92

Measuring & reporting value contribution 3.91

Reputation risk 3.84

Coping with market volatility 3.78

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Digital Integration of technology contract and relationship

The Future of Contracting

User-centred Process Delivery of simplification outcomes design

Who we are

,$&&0LVDQRWIRUSURıWDVVRFLDWLRQDFWLYHLQRYHUFRXQWULHV,WLVGHGLFDWHG to raising individual, organizational and institutional capabilities in contracting and commercial management, providing research, benchmarking, learning, FHUWLıFDWLRQDQGDGYLVRU\VHUYLFHVWRDZRUOGZLGHFURVVLQGXVWU\DXGLHQFH of practitioners, executives and government. Contact Us

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