Three easy steps to reduce contract cycle time

On average, the cycle time to conclude many contracts is increasing. This is counter to business needs and strategies. So what can you do about it? Here are three easy steps – at least easy to explain, but often harder to get through the innate resistance to change that’s endemic to so many organizations.

Simplify your contracts. Make them easy to understand. One global consumer goods company reduced supplier in-boarding from an average 14 weeks to 4 weeks just by making its terms easy to understand. A multi-national telecoms provider cut the frequency of business customer negotiations by 60% through a similar initiative. For inspiration, visit the IACCM Contract Design Library at http://www.iaccm.com.

Start from a different place. The battle of the forms is alive and well – and in most cases just a pointless tradition. Challenge yourself and your trading partners to think and act differently. Start from a position of balance, from where you’re likely to end up. Big corporations are starting to adopt the IACCM Contracting Principles for many of those contentious, hard-fought terms that bring little intrinsic value. Take a look at the principles and how to use them at http://www.iaccm.com.

3.Think the opposite. Rather than asking ‘what can I stop reviewing?’ ask instead ‘why do I need to review anything?’ Become serious about streamlining the process. Analyse what you are reviewing and why. Identify methods to truly eliminate or reduce the need for review – for example, market-appropriate terms, dynamic playbooks, effective risk scoring, fall-backs, practical use of technology.

It’s time to bring contracting into the 21st century and free up time from low value activities that simply delay and frustrate the business. Others are doing it. So can you. If you need help or advice – or links to those leaders – get in touch.

This article by Tim Cummins was originally published on IACCM.com.