Business outsourcing is still on the increase.

Today, it is not unusual to find organisations spending fully 70% of their income with third party suppliers for goods and services to help them, in turn, deliver their core services to the users of their products and services.

So most organisations are, literally, depending upon their suppliers more and more.

And, ultimately, the MORE we outsource, and the LESS we directly control, the greater the risk we bear. Because, in the end, you cannot outsource RISK.

Indeed, as the GFC reminded us so dramatically, RISK is the biggest issue in business. And so, today, organisations of all sizes are working hard to manage risk out of their business – especially on their supply side, as organisations strive to assure vital supply lines in a world growing ever more complex and volatile.

What makes this task so difficult, is trying to achieve so much MORE for our organisations at the same as assuring vital supply lines:

• To simultaneously manage down total costs – and yet still do MORE for LESS.
• To avoid protracted delivery delays – and quality problems and cost blow-outs on vital projects
• To ensure safe and secure supply lines – under good governance with robust process and strong risk management
• To build sustainable supply lines with higher provenance integrity to assuage stakeholders – that is, build confidence about WHERE things come from, and HOW they get to us?

Yet these benefits are largely gained AFTER the contract is signed – in managing contracts. Not just in the upstream STRATEGIC PROCUREMENT work we do upstream before signing a contract. Increasingly, the key to hard benefits realisation for many organisations dependent upon their supply base will be  hands-on proactive contract management.

There are THREE key strategic supply lines, in particular, which often need proactive and close post-contract hands-on management:

• Firstly, the supply of DIRECT categories of goods to our organisation – which we use to directly support the products and services we in turn supply to our consumers.   Without these things we just cannot deliver to our customers.
• Secondly, where we rely on critical service contracts to support our business over the longer term, and,
• Thirdly, where we have long lead time projects in place with key milestones and decision points especially construction or capital works projects  FOR EXAMPLE.

Open Windows software can help you realise the business benefits of pro-active management of the supply side of your organisation through automation – leaving you more time and space to work strategically rather than administratively.

Traditionally, procurement fulfilled the upstream strategic sourcing of supply lines, and then the business managed contracts implementation; not so well as it turned out. Delivering the SIX RIGHTS has never been more critical for most organisations – ensuring that the right things are at the right place, to the right spec, at the right time, for the right cost and from the right source.

Increasingly, a 7th RIGHT will evolve – ensuring that the supply network is contracted and managed in the RIGHT way.

Already today, a raft of new compliance requirements are adding to the ongoing burden of ensuring supplier performance. Moreover, benefits-realisation is attained NOT JUST from proactive category management work upstream …. Specialised CONTRACT MANAGEMENT is increasingly essential downstream to capture meaningful business benefits:

In the past, it was tempting to stop the supply side role at the “HALF WAY point” at contract signature, with delivery left to the supplier to manage and the Operations teams to implement. But that is when the work truly starts – not when it ends. When the utility of what we have invested in truly begins. When our organisation becomes dependent on turning contractual commitment into real business benefits. This responsibility can no longer be left to chance.

To ensure satisfactory delivery in a complex and volatile world, we must manage important supply contracts proactively …. The Open Windows modular procurement system helps you do that quickly and easily, and can even be designed to mirror your exact workflow processes to ensure compliance as well as heightened efficiency and effectiveness.