Arjen van Berkum
By Arjen van Berkum

Author: Arjen van Berkum

Running any large enterprise comes with its challenges. And one of the big challenges is that you simply do not know everything; that you simple cannot control it all. If you want to stay ahead of the pack, you should think on creating value for others. Especially if you want to create value for yourself.

Suppliers know better

Let us be honest. We have done lean. We have squeezed the suppliers to the max and we have optimized a lot within processes. If you are really ahead of the pack, you have embarked on toc and do not rely on classical supply chain mechanisms.

In order to innovate and change, you highly depend on the fact that there is more talent on the outside than in-house. Your suppliers and clients usually know better than you, whether it is about why your customer experience is failing or industry or technology best practices that you are not using.

Contract policy

This means that contractors need to rethink what they need from their suppliers to stay relevant and vice versa. To be frank, that usually does not seem to be a part of the contracts in many organisations. Let alone make it part of the sum of contracts. This calls for something called a strategy, a contract policy.

Focus on the real important stuff. How to drive value from any contractual relations? This means tying your entire set of contracts on your total stack of enterprise targets. These might include goals in relation to compliance, innovation and many others. In retrospect, how do you manage any set of contracts from day one? Well, make sure that you have the desired outcome and objectives included in the purpose of the contract .

If you don’t understand the power of the sum of your contracts, your contracts will become the “sum of all fears”. And every Tom Clancy fan knows, that this usually does not bode well.

 

This article was previously published on www.arjenvanberkum.com.

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