'Most Admired Global Companies' In Contract Management
RIDGEFIELD, Conn., 23 October 2008 -- The International Association for Contract and Commercial Management (IACCM) has announced the results of a study highlighting the top 25 most admired contract management performers in the world. Five of the top 10 organizations are among the largest global providers of consulting and IT services.
Close to 10,000 contracts, procurement, and legal professionals worldwide, representing more than 2,000 major international organizations, were asked to nominate the companies they most admire for the quality of their contract management performance. They identified more than 400 top-performing organizations.
According to an oil industry executive surveyed, "Contracts are one of the primary vehicles through which companies identify and define opportunities and manage risk. In a complex, networked world, many believe that the quality of contract management has become a key indicator of a company's performance and integrity. World class companies must have world class contracting performance."
Organizations realize that defining and managing successful trading relationships helps deliver on shareholder expectations, and minimize litigation and negative publicity. The corporation's reputation and performance are closely linked to the complex web of relationships that span multiple jurisdictions and regulatory environments for global companies.
The top-performing organizations identified by their clients understand these relationships and have taken the extra steps to enhance governance, balance risk, and share opportunities, ensuring the trust of key stakeholders. IACCM points out that making and managing responsible commitments is fundamental to that issue of trust.
"It is not surprising that services-based companies top the list of IACCM's findings," said Jason Busch, Editor of spendmatters.com. "But other companies on the list such as Boeing suggest the importance of contract management to overall business success in the manufacturing world as well. As global business relationships become more complex and varied across industries, contract management becomes the tool by which top performing organizations define success and reduce risk with key partners. More than a legal tool, contract management is a foundation for overall relationship management."
IACCM notes that today's contract management techniques stretch beyond the administrative tasks of the past. Leaders understand the critical role effective contracting plays in relationship building and corporate governance.
The contracting process provides a framework for regulatory compliance, reputational risk management, and effective change control, as well as providing an opportunity for innovation and added value beyond price cuts and cost reduction. Superior contract management skills can also help drive safety and reliability performance of contractors, and ensure continuous upgrading of speed and quality.
"As governments worldwide debate regulatory responses to the banking and credit crisis, they should consider the extent to which contracting policies and practices represent a key line of defense for corporate behavior and ethics," said Tim Cummins, IACCM's CEO. "They would do well to study the companies and business sectors that have adopted robust self-regulation through high quality management of their trading commitments."
IACCM's GLOBAL 25
1. IBM
2. Accenture
3. Hewlett Packard
4. BT
5. Boeing
6. Cardinal Health
7. EDS
8. Intel
9. Qualcomm
10. Bechtel
11. Centrica
12. Procter & Gamble
13. Chevron
14. BAE Systems
15. CH2 M Hill
16. Johnson & Johnson
17. Lockheed Martin
18. ABN Amro
19. Coca-Cola Enterprises
20. Fluor Corp.
21. Saudi Aramco
22. Bank of America
23. EXL Holdings
24. Capgemini
25. General Motors
IACCM completed the research for this study in June and July 2008. Researchers asked participants to nominate companies with whom they had professional dealings that exhibited excellence in their post-award contract management performance.
In many cases, those experiences were with specific groups or divisions of a company. For example, in some instances the nomination was for sales contracting, in others it was for procurement. IACCM has agreed to make information on the nominated group or division available on request by contacting [email protected]. IACCM will also share the criteria that it believes represents the core attributes required to achieve high performance in these areas.
IACM says that given the focus of the study and the make-up of the respondents, nominated organizations tended to be those dealing with relatively complex, high value and long-term contracts. The study is based on the opinions and experiences of 10,000 participants at 2,000 IACCM member organizations. There is potentially a study bias toward North American and Western European companies, based on the makeup of the organizations surveyed.
This study is the first in IACCM's on-going series related to contracting and relationship management excellence. IACCM plans to conduct in-depth interviews with many of the winners to understand the approaches they have taken to develop best practices for working with key trading partners. IACCM will issue a more detailed report on the steps to achieve contract management excellence later in 2008.