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The importance of relationships

This video provides a range of very experienced speakers addressing why relationships are even more important than the contract document.
You know, at the end of the day, you know we are human being. So business relationship is about, you know, dealing with with others and you know, for me it’s very important to understand each other. So it’s a part of the expectation management in the forming, but also in the managing of the business relationship. I think. I think sometimes we spend too much time in spending too much time in the forming of the relationship, which is 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 other relationships through the life cycle of that contract or the tradition 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 informing, but also the time and the appropriate skills you need to put in the management and the managing of the relationship. We rely an awful lot on our suppliers. I have a rule that I’ve been using with many people. I call him the 70/80/90 rule and that is 70% of the people that makes the world go round for us as a company are not our own employees, they are suppliers.
Contractors that come to us in many different forms, either as contingent labor or mostly as a service we buy. 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, and the complexities of a relationship are going to be there. This may be complexities in a contract, but the complexities within a relationship may be evolving and changing individuals within an organization are going to change. They themselves will somewhat developed a great maturity.
But they may exit or enter into that organization, so there’s a continual change of cast. There’s somewhat of a churn of the individuals, whereas the document tends to be relatively stable and static. You’re going to see yes, amendments, addenda, etc 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.

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

You will hear from: Ghislaine Gunge, Commercial and Contract Management Director, CSC; Nils Svanberg, General Manager Europe & North Africa, Supply Chain, IT, Real Estate and Facility Services, ConocoPhillips; Jim Bergman, CEO, Commercial Officers’ Group.

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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Contract Management: Building Relationships in Business

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