If someone asks you, “What do you do?”…how do you reply? Do you say, “I work in procurement” or “I work in contract management”? Paul Rogers explores procurement’s big identity crisis in this exclusive article for PASA.
Just as personnel became human resources and then people & culture, some procurement teams now call themselves “commercial” or “commercial & contract management”. This may be to emphasise a broader commercial focus, but each new term just adds to stakeholder confusion, doesn’t it?
The latest map of the contract management world
Unlike HR, we haven’t seen one label emerge as the consensus term. Instead, we have an alphabet soup: procurement, purchasing, sourcing, contract management, commercial management, supplier management…
Ask 10 people and you’ll get 10 different answers (and perhaps an eleventh eyeroll for good measure)!
Last month saw the release of the Contract Management Standard (CMS) Fourth Edition. This ‘global standard’ is designed as a map of the contract management world, defining phases, tasks and competencies from the earliest procurement planning to the final contract closeout.
Standards like this are meant to give practitioners a structured way to think about their work; a blueprint for how contracts should be managed from cradle to grave.
The framework depicts the contract life cycle in phases (pre-award, award, post-award), with detailed sub-processes under each, yet these frameworks also reveal the profession’s fault lines.
In the entire 20-page CMS Fourth Edition document, the word ‘procurement’ appears only three times (yes, I checked!). This minimal nod to the ‘P-word’ is telling. It’s as if the authors of the standard went out of their way to make contract management sound like its own universe, largely separate from traditional procurement.
For a document that’s supposed to unite “the broadest range of subject-matter experts” in a consensus, it’s interesting (and a bit ironic) that one of the most common functions associated with contracting barely gets a mention. It almost side-steps the term procurement, as if contract managers operate in a parallel dimension where procurement only plays a cameo role.
In the red corner: Pre-award is procurement vs. Post-award is contract management
This quirk highlights a deeper issue: the ambiguous nature of the ‘profession’ of procurement and contract management. Are we procurement people? Contract managers? Both? It’s surprisingly hard to pin down. Different organisations – even different parts of the same organisation – treat these roles in inconsistent ways.
In some companies (and especially in government), ‘contract management’ is understood as what happens post-award: making sure the contractor delivers, handling variations and closing out the contract.
All the ‘up-front’ work of sourcing and bidding is labelled as ‘procurement’, and once the contract is signed, the ‘procurement process’ is done and the contract managers take over.
This view is quite common in government procurement circles where a contracting manager (or a program manager) might say “procurement” for everything up to award, and “contract management” for everything after.
In the blue corner: Contract management is one phrase to unite them all
Contrast that with the perspective baked into frameworks like CMS Fourth Edition – and championed by groups like National Contract Management Association (NCMA) and World Commerce & Contracting (WorldCC). Here, ‘contract management’ is an umbrella term covering the full gamut of contracting – from developing RFPs and offers to awarding and performing the contract.
Under this broader view, a contract manager’s domain starts at the very beginning (drafting RFPs or negotiating deals) and goes all the way to the end (closeout and renewal).
Procurement, in this paradigm, is seen as just one element of the pre-award phase. It might also be a minor label that doesn’t capture the whole picture. No wonder the word only appears three times in the standard! And no wonder procurement practitioners are scratching their heads asking where they fit in.
Do the Inuit really have 40 words for snow?
The Inuit in Greenland are believed to have over 40 words for snow, while those living in Alaska could have in excess of 70!
Ask any recruiter and they’ll tell you that there are more than 70 common job titles in procurement, and not one of them is a reliable guide to what the job actually does. The result is an identity crisis.
Depending on whom you ask, a person handling contracts could be seen as part of the procurement team, part of the legal team, part of project management or in a standalone contracts function.
This lack of clarity over who does what, what is our job title and whether we work in the ‘procurement process’ or the ‘contract management process’ means that the profession hasn’t cleanly defined its own boundaries.
It’s as if a bunch of players are on the same field, but some think they’re playing soccer and others think they’re playing rugby. What could possibly go wrong?
Accountants know who they are and what they do
To appreciate just how nebulous the procurement/contract management world is, consider the accounting profession. Accountants, no matter where they are globally, generally agree on what accounting entails.
They have international standards that are widely adopted – for instance, over 120 countries use the same financial reporting rules (IFRS). An accountant in New York and an accountant in Tokyo might follow different national regulations at times (hello, GAAP vs IFRS), but both recognise the same core concepts and scope of their field.
The profession has a shared understanding, reinforced by common education and certifications. As professions go, accounting has genuine ‘global standards’ and a consensus about its purpose.
How many ‘maps of the world’ do we need?
Procurement and contract management have multiple professional bodies (CIPS, NCMA, WorldCC, ISM, etc.) and an ecosystem including consulting groups and other players (including PASA) each with their own capability, competence and excellence frameworks.
The CMS Fourth Edition is pitched as the first “truly global standard” for contract management. Organisations like WorldCC have been working for decades to solidify a professional body of knowledge for contract management, but how many more maps do we really need?
Perhaps it’s time we confront this honestly. The ‘P-word’ appearing only three times in a flagship standard is almost symbolic. Whether we end up calling it procurement, contract management, commercial management or invent a catchy new name, it isn’t as important as reaching a shared understanding.
Until then, we’ll keep working in this odd professional limbo, with some practitioners boldly following a route on their map, while a different group set out in a different direction following a different map.
As the Cheshire Cat (almost) said to Alice, “if you don’t know where you’re going, any road will do.”
We cannot be surprised that our stakeholders are confused when we don’t know who we are or what we do. Perhaps the peak bodies might sit down and develop a common roadmap for harmonisation of standards, labels and frameworks? That’s the only map we really need.
