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How Contract Management Add Value to Business?

Contract Management gain its significance after the 2008 financial crisis. Companies started to sit up and noticed rather belatedly that terms and conditions and management of contract were not the top most priority and became more of a bane rather than an asset during the crisis.

A realisation that much value has been left untapped in the management of contracts that would have mitigated if not entirely cushion the debilitating crisis came too late. An immediate impact for commercial improvement is by giving Procurement leaders a seat at the table in many corporate boardrooms is a testament of the significance procurement can play in bottom line improvements, governance, risk mitigation and innovation.

Fast forward 2018 and since the low oil era beginning of 2013/14, globalisation, Brexit and not forgetting the nascent trade war currently being played out daily on national news, blogs, on-line that send chills down the spine every business and economy. There is a silver lining that procurement can play and in fact can lead. Testing times like these are the best opportunities that beckons forward looking leadership to drive and explore new areas to capitalise value proposition.

Industry 4.0, Internet of Things, Artificial Intelligence and Blockchain are changing the world at a speed never been seen before in history. Procurement is right smack in the middle of this innovation and the time to lead is no more urgent now than ever.

How procurement innovate embrace the technological advances are crucial for procurement leadership to stay permanently at the table. Contract Management becomes even more important and in fact crucial for the sustainability of any organization present and future.

There are no hard and fast rules to achieve success in contract management. What is required is the fortitude of procurement professional to collaborate, open to ideas, alleviate supplier relationship to partnership level and turn the turbulence world over as an avenue to tap into and extract the abundance of opportunities that deliver value to business.

A study conducted by International Association of Commercial and Contract Management (IACCM) shows that this can be achieved when we focus among other things;

  • Identify and address factors typically undermine performance

  • Drive greater visibility and control throughout the journey

  • Ensure compatibility of interest are established and maintained

  • Selection criteria that focus on supplier capability and quality

  • Facilitated approach to negotiation

  • Joint workshop to support implementation

  • Relational principles are embedded in contract and supported by committed resources

By linking contracts and economics a company can improve its bottom line through clear objective and drive with purpose to be the recipe for success.

To find out more how Contract Management adds value to your business and to learn more from our experienced trainer, contact us at or visit for more information.

About the Author

Sudhakaran Ayyappan is a Contracts and Procurement professional with 15-years’ experience managing procurement and overall 28-years working experience in oil refining business. His hands on experience puts him is unique position as a trainer that understands the business needs and objectives, market movement and the latest in procurement and supply chain related trends.

He specializes in contracts, purchasing, material management, warehousing, negotiations, coaching, Train The Trainer (in-house trainer), contract management, contract and procurement auditing, leadership and management. His vast experience in oil and gas has exposed him to wide array of category management for static equipment, rotating equipment, pipes, valves, flanges, tank seals, engineering and maintenance services as a regional Procurement Manager with Shell Malaysia Trading supporting refineries in Malaysia, Singapore and the Philippines.

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