Contract management planning strategy – procurement guide Why consider contract management upfront? Contract management is traditionally seen as an activity that takes place at the end of the procurement process. In other words, everything that happens after the contracts are signed. There are similarities in the way contracts within a category of goods and services are managed in terms of process. This gives an organisation the opportunity to define upfront how contracts will be managed as part of their overall procurement strategy. The CMPS is referred to in the VGPB’s Governance policy. For more information on complexity quadrants, refer to the VGPB’s Complexity and capability assessment policy and the Guide to complexity. What is a contract management planning strategy? A contract management planning strategy (CMPS) defines upfront how procurement categories and individual procurements will be managed at the contractual stage based on their complexity level. It is a high level document that is part of your organisation’s procurement strategy. Once your organisation has a detailed picture of its spend and has developed procurement categories, you will carry out complexity assessments, assigning one of four levels of complexity (transactional, leveraged, focused and strategic) to each category and to any individual procurements. Each level (quadrant) of complexity is supported by a single contract management strategy. This ensures that the most appropriate contract management framework is consistently applied across all procurement activity within a category. The CMPS tells your organisation what resources, systems, processes, tools, reporting and capabilities are needed to manage contracts in each of the four complexity quadrants. It provides a consistent reference template for the head of your organisation and chief procurement officer (CPO) to measure the ability of your organisation to manage its contracts effectively. Consult the CPO before developing a CMPS for an individual procurement activity. A CMPS also indicates supply market factors to consider when formally engaging with the market. A CMPS does not determine how individual contracts will be managed at the operational level. This requires a more detailed assessment of the procurement risks and supplier management issues related to a particular procurement activity. For example, performance management of supplier(s) is defined for each individual contract.
Contract management planning strategy – procurement guide Why consider contract management upfront? Contract management is traditionally seen as an activity that takes place at the end of the procurement process. In other words, everything that happens after the contracts are signed. There are similarities in the way contracts within a category of goods and services are managed in terms of process. This gives an organisation the opportunity to define upfront how contracts will be managed as part of their overall procurement strategy. The CMPS is referred to in the VGPB’s Governance policy. For more information on complexity quadrants, refer to the VGPB’s Complexity and capability assessment policy and the Guide to complexity. What is a contract management planning strategy? A contract management planning strategy (CMPS) defines upfront how procurement categories and individual procurements will be managed at the contractual stage based on their complexity level. It is a high level document that is part of your organisation’s procurement strategy. Once your organisation has a detailed picture of its spend and has developed procurement categories, you will carry out complexity assessments, assigning one of four levels of complexity (transactional, leveraged, focused and strategic) to each category and to any individual procurements. Each level (quadrant) of complexity is supported by a single contract management strategy. This ensures that the most appropriate contract management framework is consistently applied across all procurement activity within a category. The CMPS tells your organisation what resources, systems, processes, tools, reporting and capabilities are needed to manage contracts in each of the four complexity quadrants. It provides a consistent reference template for the head of your organisation and chief procurement officer (CPO) to measure the ability of your organisation to manage its contracts effectively. Consult the CPO before developing a CMPS for an individual procurement activity. A CMPS also indicates supply market factors to consider when formally engaging with the market. A CMPS does not determine how individual contracts will be managed at the operational level. This requires a more detailed assessment of the procurement risks and supplier management issues related to a particular procurement activity. For example, performance management of supplier(s) is defined for each individual contract.