Last week I attended my first International Association for Contract and Commercial Management ( IACCM ) Australasia conference at the Crown hotel in Melbourne.
I had been invited to participate in a panel discussion on the subject of Contracting for Success in Complex Projects. The organisers had also been kind enough to provide a space for Brackenway Consulting in the Startup Hub to introduce our new Virtual Commercial Manager service.
It was an incredibly busy and productive two days where many interesting topics were presented, debated and continued to be discussed during breaks in proceedings by commercial professionals from a broad range of diverse industries such as defence, construction and telecommunications
Whist a great many subjects were covered, the following are my 5 main take outs from the conference along with a few quotes from the proceedings.
The Rise of the Machines
Machines may not be ready to take over the world they are certainly at the stage where they can and already are preparing simple contracts. Under the banner of Common Accord (think Wikipedia for contracts), contract terms and templates are being simplified and standardised by people like James Hazard and Marc Dangeard to allow the process of contract formation to be automated.
Contracts are written by lawyers for lawyers in the expectation of litigation.
Dennis the Menace can Help Explain Rights & Obligations
Well maybe not Dennis but comic strips in general can be used as a simple form of contract where the main aim of the contract is align expectations , guide behaviours and improve relationships – especially where one party to the contract may be illiterate or have a limited understanding of the local language.
Strong Relationships are the Key to Project Success
There are many factors that can influence the success of a project, such as choosing an appropriate form of contract, thoroughly detailing the scope of work and assigning risk to the party best able to manage it but projects can still fail if not enough effort is made to build and maintain strong relationships between the key project stakeholders. This was one of the main conclusions from the panel discussion I participated in with Sally Hughes (COO of IACCM) and Mike Desmond (Director of Supplier Relationship Management at the Australian Department of Defence) to discuss contracting for success in complex projects but this finding is equally applicable to all projects, complex or otherwise, big or small.
Whilst some contract models are written with the express aim of fostering relationships, such as Alliance contract forms, strong relationships can still be built on projects using the most traditionally adversarial forms of contract such as lump sum construct only or design and construct. In fact it is arguable that strong relationships are even more important in these circumstances if disputes and potentially litigation are to be avoided.
Contracts are too focused on control rather than the mutual achievement of value.
Sally Hughes
Take Care of the Principles and the Lawyers (or Robot) will Take Care of the Terms
Negotiations of the future will be based on principles rather than terms Tim Cummins
How often do contract negotiations get bogged down in the minutia of the same old procedural terms such as indemnities , limitations of liability, confidentiality? Whilst these terms are undeniably important they do not drive value or substantially reduce the likelihood of dispute.
A presentation by Scott Alden and Dr Cyril Jankoff (above) discussed the findings of a recent IACCM survey of the contractual terms that are most fought over during contract negotiations and those that are perceived to be the most valuable in terms of influencing project success. It is notable that the most fought over terms relate to what happens when things go wrong or ‘matters of divorce’ whereas the issues deemed important relate to the definition of scope and responsibilities or ‘matters of marriage’.
A number of speakers at the conference were of the view that in future more time would be spent negotiating matters of marriage and divorce terms would be pulled off the common accord shelf by the terminator or his contract writing equivalent.
IACCM is Leading the Debate and Driving Change
I have a big admission to make – until recently I had not heard of IACCM or their work and only became a member a few months ago. Since then I have been making up for lost time, reading many interesting articles in the IACCM members’ resources library and connecting with other members.
I have seen that IACCM is a strong and passionate advocate for change to improve contract outcomes, not just within the commercial and contracting profession but across the industries which the profession serves and with other professional bodies as well.
Whatever is gained by specialist silos is outweighed by integration failures James Odell
IACCM also works closely with younger members of the contract and commercial management community and during the conference, nominated ‘leaders of the future’ worked in small teams to prepare a presentation titled “What value will the contract and commercial management function be delivering in 5 years’ time and how?”.
Next year the IACCM conference will be held in Brisbane.
I will be there – will you?
