80 per cent of time negotiating contracts is wasted....

Some interesting comments regarding contract terms and negotiation from Martin Brenig-Jones, author of Lean Six Sigma for Dummies; Alex Hamilton, CEO of Radiant Law and Ed Owen at Three, at the latest CIPS Contracting for Real Value event.

Speaking at a CIPS Contracting for Real Value event, Martin Brenig-Jones "believes that typically 20 per cent to 30 per cent of steps in a process “can be seen to be not adding value”.  he also added "we find organisations are over-processing, perhaps because something went wrong before. Alex Hamilton suggested “It can be upwards of 80 per cent of time is not spent in value-adding activity. Delegates were told limitation of liability, price and indemnification were the three most commonly negotiated contract terms. "Contracts needed to be more tailored, The contracts we are creating are too complex, they are too long, they are hard to use and no-one likes them” delegates were told.“The negotiation process crushes relationships rather than creating them.”He said people were “really, really bad” at evaluating risk and that for strategic suppliers buyers should move to “relational” contracts, which are contracts “that can’t be enforced”. “The parties can walk away. The relationship is built on that,” said Hamilton. “People who use this have created high value".

Ed Owen, head of technology procurement at Three said when drawing up contracts you "should use the contract process to build up relationships." "It’s really important that when you are head down in a room negotiating contracts that you use the opportunity to build a relationship rather than destroy it. The goodwill, the trust that you build at the contracting point will serve you well for the next few years.” - To see more go to Supply Management News