Recently, SIG had the pleasure of hosting Nitin Khorana, Vice President from Icertis for the September CPO & Executive Virtual Series. It was a very engaging discussion that lasted nearly two hours with tons of excellent takeaways. Let’s get into it!

Contract Intelligence Driving Visibility into Supply Chain

Nitin kicked off the day discussing the impact that COVID-19 has had on supply chains and bottom lines. As Nitin highlighted from one particular study, 97% of supply chains reported that their workforce was impacted by COVID-19. The resulting question from organizations became "how do I manage risk and how do I react quickly to maintain supply chain performance post-pandemic". 

This is where Chief Supply chain officers have come to the forefront. These key players for the business have become increasingly recognized for their ability to deliver profitability & long-term business objectives. What helps these supply chain leaders elevate this supply chain performance? Visibility into their supply chains.

As Nitin points out, contract management plays a vital role in supply chain performance. Contract intelligence is able to set qualification benchmarks and processes for existing and new suppliers. By using blockchain framework delivers visibility into tier 2 and tier 3 suppliers by quickly being able to identify contracts that don't align with risk & category strategies. 

A More Resilient & Efficient Supply Chain Starts with Contracts

Corporations are increasingly using their financial strength to address supply chain performance through contract-driven supply chain visibility and diversification. There are three ways that contract lifecycle management (CLM) can drive this visibility. 

As access to COVID-19 vaccines increases and covid variants become increasingly concerning, companies around the world are actively discussing how to build a hybrid work culture, somewhere along the continuum of fully returning and fully remote, with many options in between.   

After a year of working from home, the employee mindset has shifted with many people discovering that they enjoy the additional flexibility to balance their family lives while others are “Zoom fatigued” and eager to get back to the office for face-to-face interaction and personal growth.  The answer probably lies in a range of options and the phasing of return to office (RTO), creating the “new normal”.  

At SMC Squared we’re actively discussing and preparing for RTO for our own teams and guiding many clients.  The goal is to continue to maintain a safe environment for an engaged and highly productive workforce. I’ve challenged our management team to rethink how we listen, remain flexible, and importantly retain our employees.  We are working to ensure they feel safe returning to the office while also maximizing their opportunities for career growth, collaboration, and mentorship.

It’s not going to be easy as the workplace mindset has rapidly shifted over the last year.  Companies must define what a hybrid working model means for them while putting in place different options to balance the needs of the organization and of their people. In addition to the internal challenges,  organizations face external factors such as vaccination availability, COVID-19 caseloads, work-life balance, and the highly active and competitive job market.

SIG University Certified Third-Party Risk Management Professional (C3PRMP) program graduate Kyle Brown discusses the value proposition and responsibilities for the key players in an effective third-party risk management program.

Each business unit owns the risks associated with the contracts they decide to enter into.  This is a fundamental principle built into third-party risk management (TRPM) programs. In large organizations, the program's success is highly dependent upon each Business Unit fulfilling their responsibilities.

The Business Unit Structure for Risk Management Success

The business unit needs to ensure they have a suitable organizational structure and resources to fulfill their third-party risk management program responsibilities. This includes having team members trained in specific competencies and adequate capacity based on the level of risk associated with the business unit's third parties and sufficient capacity based on the level of risk associated with the business unit's third parties.

Once the contract is set, the business unit is responsible for the activities and tasks related to owning the relationship ( “relationship management”), including communication, contract, performance, and risk management. Team Members who reside within a business unit who perform relationship management activities comprise the largest internal population of team members who should manage risk due diligence activities with third parties.

Recently, SIG had the pleasure of hosting a panel of Everest Group experts for the July CPO & Executive Virtual Series. The panel included Vice President, Sourcing and Vendor Management, Amy Fong, Chief Research Officer, Michel Janssen, Everest Group Partner, Jimit Arora and Pricing Assurance Partner, Rahul Gehani. It was a very engaging discussion that lasted nearly two hours with tons of excellent takeaways. Let’s get into it!

Trends of the 2020 & 2021 Service Provider Wages

The focus of the meeting was BPO and IT services and the industry trends related to the supply market and successful buy-side organizations. Jimit Arora kicked the roundtable off with the findings from 2020 and early 2021 regarding the rates of IT and BPO services. One of the major points of emphasis was the renegotiating of rates after the dust settled from 2020.

Many of the suppliers realized that the previous rate discounts that were granted during the work-from-home scramble weren’t sustainable. As Jimit stated from Everest Group’s findings, “we are seeing situations where suppliers are going back to their clients saying, Hey, we need to re-up these rates, right?”

A major reason for this change is due to the inflation of the labor market. The question many companies are asking themselves is “how do you get your resources for what you need to accomplish at the correct pay rate, while still making it feasible to where people want to work versus just going on unemployment”. This issue is causing a constraint in general on the market and the talent pool that's available right now. And this remains true whether you view this from a United States perspective or an offshore international perspective.

As demand continues to rock supply chains, we prepare for the future of procurement and risk mitigation with a host of exciting resources, industry research and webinars to elevate you in your role.

August Microlearning by SIG University: Contracting and A Holistic Approach to Risk Management

On August 4, University of Tennessee Faculty, Graduate and Executive Professor Kate Vitasek, and CEO of Commercial Officers Group, Jim Bergman, will explore key concepts around contracting in the new economy. That session will be followed by SIG Hall of Famer and Faculty Member, Lawrence Kane who will join negotiation expert and commercial contracting coach, Jeanette Nyden for a deep-dive discussion on a holistic approach to risk management. 

Join your sourcing, procurement, and risk management colleagues in this two-hour interactive virtual environment to be challenged with topics related to our industries!

Power Hour Webinars

Demystifying eAuctions – How to Source Smarter, Faster and Better

eAuctions are a great method for helping firms maintain speed to market in an economic environment riddled with scarcity, increased sourcing risk and complexity. The problem? Despite the many benefits that eAuctions offer, they are a grossly misunderstood and underutilized strategy. 

In this webinar moderated by SIG, GEP’s Director, Marin Aravind and Senior Associate, Lavanya Krishnan, will demystify eAuctions and share best practices that enable procurement to function as a profit center by improving cost visibility, driving incremental savings, enhancing compliance and optimizing efficiency.