Sleepwalking into trouble
Posted by Andrew Moore, Director, DAV Management.
Commercial management is a fundamental for the successful delivery of any technology enabled business change programme. However, it means different things to different people in different organisations. In its broadest sense, it can involve all aspects of the commercial relationship management – from drafting and negotiating major contracts, through supply and purchase, to contractual relationship management, disposals and acquisitions. What’s important is to understand the scope of its potential role within your organisation … and what this then means in terms of personal and team responsibilities.
For example, done well, commercial management can be a cradle-to-grave solution that supports your organisation as it uses technology to: respond to market forces, launch new services and leapfrog the competition. If this is the level of expectation your organisation has, it will need to put an experienced commercial IT team in place that can quickly develop an in-depth understanding of the business parameters that will drive programme success.
Commercial management is essentially a people service. So, as a first step, work out what you want commercial management to deliver for your organisation. Is it a strategic imperative for delivering business-critical change management programmes? Or is it a tactical interim requirement to set the commercial management approach for your organisation and effect a knowledge transfer to existing internal (or newly recruited) resources? Once you are under the skin of your organisation’s needs, you will be well placed to start working out where the potential capability gaps are in your armoury.
Build Your Team with Care
Because successful commercial management is all about prevention not cure, people who understand how to shape, build and maintain successful relationships are critical in this process. Commercial management will never work well if you have a ‘tick-box’ team in place that is only focused on contract detail and not business imperatives.
To get the optimum value from a contract, large-scale technology programmes rely heavily on: the IT knowledge of the team selected, the ‘fit’ between the different cultures of the organisations involved and, to some extent, the chemistry between the personalities involved. Good commercial relationships require teams of people who:
- Bring a detailed understanding of IT and its creative imperatives (what will and won’t work in an IT-oriented commercial management setting)
- Have a common understanding of purpose and are focussed on achieving it
- Demonstrate large amounts of common sense and pragmatism
- Show lots of flexibility to circumvent obstacles without being deflected from the primary objective and critical path
- Offer a solution- (rather than problem-) focused attitude (i.e. ‘we can’t do that … but we can do this’).
So, take time to build your commercial management team with care and bring in independent, third party experts if you don’t have the right experience in-house. People who are worth their weight in gold will be able to:
- Understand the intricacies of a project without getting hemmed in by the detail.
- Be ‘professionally assertive’ without alienating the project teams they rely on.
- Demonstrate creativity while operating within legal guidelines.
Focus On The Business
Commercial management is a specialist skill that requires an in-depth understanding of the business and its aims and objectives, as well as the technology requirements the organisation is trying to address. However, all too often, organisations rely on supplier led contracts and the people who are brought in to lead contract negotiations are either whoever is least busy internally (rarely the person with the requisite skills required) or people from outside the business (with little knowledge of the organisation’s history – for example:
- Procurement staff unaccustomed to commercial transactions of such complexity and focussed on the bottom line price without factoring in the value add or the wider organisational benefits/issues …
- Or legal advisors who can advise on legal and contract issues but do not have the business context).
For a transaction to be successful there needs to be strong leadership from the business owner and the person in the organisation who will be responsible for the successful operation of the contract after it is signed. The commercial manager can help guide the business owner with scenario planning and options.
To maximise your potential success, it is always preferable to have people involved from within that:
- Bring a detailed understanding of the needs of the business.
- Are experienced in IT contract and commercial management.
- Have direct experience of the kind of contract they are trying to create.
- Can focus on working with all parties to get the contract working optimally.
- Are able to be involved from the early stages of negotiation and will be around to manage delivery.
If you don’t have the right experience in-house, a third-party specialist will be of great value.