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When Contract Policies Do More Harm Than Good

When Contract Policies Do More Harm Than Good

April 29, 2008 Dahna Ori Contract Management  

We've written before about the "one size fits all" approach to contracting, and the problems it can create. Now IACCM President Tim Cummins has blogged about the same problem, with some interesting new research data.

In short, a hard line approach to standard form, take-it-or-leave it contracts seems to be back-firing on the Legal teams that seek to impose it, at least on the procurement department. Why, because suppliers don't like it, they push back and negotiate, and Legal ends up getting dragged into the process more than they would like.

Instead of using flexible tools like automated document assembly to empower procurement and accelerate cycle times, the IACCM research shows that:

  1. Contract cycle times have been increasing
  2. Legal is seen as a "road block" by 40% of procurement teams.

Further evidence that standard form inflexibility really doesn't work for business contracts. Contract automation is a much better solution.

dahna

Dahna Ori is Exari’s Digital Marketing Specialist. Reach out on twitter @ExariDahna