there could be some guidelines that business owners or procurement could use when dealing with the suppliers. As a minimum, standard terms and conditions are usually mandated centrally and used in all third-party contracts. For 77% of the organisations in the survey, standard terms and conditions are set and used in all contracts.
Figure 54: DO YOU HAVE STANDARD TERMS AND CONDITIONS THAT ARE USED IN ALL CONTRACTS WITH SUPPLIERS?
Don’t know No Yes
77%
17.2%
5.7%
0
10%
20% 30% 40%
50%
60%
70%
80%
Effective contract management can bring a lot of benefits to organisations – namely, reduced risk, higher quality, better value products and services, shorter contracting cycles and reduced procurement costs. However, contract management is not always efficient. The main challenges reported by survey participants include off-contract spend (59.7%), followed by long contracting cycles (49.4%) and ‘maverick’ spend (32.5%). We believe that these challenges can be addressed through implementing a contract management policy that is adopted across the organisation.
Figure 55: WHICH OF THE FOLLOWING CHALLENGES HAVE YOU ENCOUNTERED WITH CONTRACT MANAGEMENT?
There is spend that is not covered with a contract with suppliers
59.7%
There is maverick spend (spend outside existing contract(s) with suppliers) Low quality of products and services Higher than agreed payments to suppliers Non effective negotiations with suppliers Long cycles of drafting and signing a contract
49.4%
32.5%
16.9%
16.9%
10.4%
Lost opportunities to terminate a contract
7.8%
Other Non effective storing or / and losing of contracts Breach of contractual obligations
5.2%
5.2%
2.6%
0
10%
20%
30%
40%
50%
60%
68
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