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Skip to 0 minutes and 16 seconds GHISLAINE GUNGE: At the end of the day, you know, we are human beings. So a business relationship is about, you know, dealing with others. And you know, for me, it’s very important to understand each other. So it’s part of the expectation management in the forming, but also in the managing of the business relationship. I think sometimes we spend too much time in the forming of the relationship, which is a very transactional-based activity. You know, you understand each other, you write it down, you negotiate. You end up with a piece of paper that people signed and that’s it. But the most important is also the managing of the relationship through the life cycle of that contract or that tradition.

Skip to 0 minutes and 58 seconds That could be six months, two years, 10 years, 20 years, whatever. So what is very important is to balance both, you know, the time you spend in forming, but also the time and the appropriate skills you need to put in the management and the managing of the relationship.

Skip to 1 minute and 15 seconds KATHERINE KAWAMOTO: We at IACCM see that there’s quite a overlap between them. And in fact, we encourage our contract management professionals to learn more about relationship management. We’ve offered a supplier relationship management programme, which incorporates many of the concepts from contract management, but extends those. Because really, at the end of the day, it’s the relationship that matters. It’s not the contract. It’s not the legal terms. It’s the relationship between the parties and the understanding that they have of each other’s needs and requirements.

Skip to 1 minute and 48 seconds NILS SVANBERG: We rely an awful lot on our suppliers. I have a rule that I’ve been using with many people. I call it the 70, 80, 90 rule. And that is 70% of the people that makes the wheel go around for us as a company are not our own employees. They are suppliers, contractors that come in to us in many different forms, either as contingent labour or mostly as a service we buy.

Skip to 2 minutes and 13 seconds JIM BERGMAN: So, yeah, there is, to some extent, a difference between the contract and the relationship. Obviously contracts have somewhat of a tangible four-corners of a document type of element to it. It is a tangible item. And yet, the relationship is somewhat intangible. The relationship is obviously going to be fluid. The complexities of a relationship are going to be there. Yes, there may be complexities in a contract. But the complexities within a relationship may be evolving and changing. Individuals within an organisation are going to change. They, themselves, will somewhat develop a greater maturity. But they may exit or enter into that organisation. So there’s a continual change of cast. There’s somewhat of a churn of the individuals.

Skip to 3 minutes and 3 seconds Whereas the document tends to be relatively stable and static. You’re going to see, yes, amendments, addenda, et cetera change orders that will occur to the document. But the relationship is going to be much more fluid. And it’s really within that relationship where we see greater challenges to ensure that there’s consistency and that there is compliance to the overall business purpose, commercial purpose, of that commercial relationship.

The importance of relationships

In this video, contributors from both the UK Civil Service and major commercial businesses worldwide discuss relationships in contract management.

Note how they see the importance of:

  • business to business relationships

  • the need to improve the capability to deliver the required user needs

  • developing more trusting and mutually supportive relationships.

After watching this video, what are your thoughts?

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This video is from the free online course:

Contract Management: Building Relationships in Business

University of Southampton