Our newest PI European Edition columnist Tim Cummins offers interesting insight into IACCM’s Negotiated Terms Study by Jon Hansen

As our Procurement Insights European Union Edition takes off under the deft and insightful management of Chief Editor Colin Cram, I am very pleased to announce the addition of another new contributing columnist to the team.

IACCM’s Tim Cummins is one of those individuals who bring a much needed perspective to an industry in transition.

In this his first post, Tim will offer interesting insights into IACCM’s 11th Annual Negotiated Terms Study.

Be sure to follow Tim as well as our other industry thought leading columnists as they cover the world of procurement overseas in Procurement Insights European Union Edition.

Contracting and commercial capability have risen in importance on the Corporate agenda – and IACCM’s 11th Annual Study of the Most Frequently Negotiated Terms explains why. Continued turmoil in global markets, coupled with a wave of regulation and shifting economic power, are creating an environment of increased complexity and risk, which is having a major impact on contract negotiations.

This year’s study reveals changes that are far more dramatic than at any time since inception of the report. Among the highlights:

· Markets are fragmenting; major corporations are either choosing or being forced to shift the focus of their negotiation in international markets as local issues or concerns challenge standard templates.

· The buy-side / sell-side agenda has become more polarized, reflecting a growing divergence of concerns and increased focus by Legal and contracting specialists on supplier risk.

· The frequency of negotiation and of post-award claims and disputes has increased, driven by a combination of rapid power shifts within industries and between countries, and economic conditions that result in cost-cutting and adversarial behaviour.

· There are encouraging signs that negotiators are placing greater focus on terms that impact risk probability. However, there are also indications of diminished trust between buyers and suppliers, with collaboration occurring only between a select few.

These changes have significant implications for workload, skills, operational management and risk. They demand revised contract and commercial strategies and increase the urgency of steps toward ‘intelligent contracting’

© IACCM 2012 www.iaccm.com

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