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Global Contract Management

Global Contract Management. Ron Smith Commercial Contracting Conference 2003. Global Contract Management. Management processes & cycles Project cycles Contract cycles Contract management relationships Organization options Global Contract Management issues. Project Cycles.

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Global Contract Management

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  1. Global Contract Management Ron Smith Commercial Contracting Conference 2003

  2. Global Contract Management • Management processes & cycles • Project cycles • Contract cycles • Contract management relationships • Organization options • Global Contract Management issues

  3. Project Cycles Reference Text, pg. 78

  4. Project Cycles (cont.) Typical High-Tech Commercial Company Reference Text, pg. 78

  5. Project Cycle Phases Control Gates New Initiative Approval System Concept Approval System Specification Approval Production Approval Operational Approval Reference Text, pg. 78

  6. Contract Management Cycle World-Class Contracting, by Gregory A. Garrett, CCH, 2001

  7. Contract Management Relationships (organizational) Executive Management Law Department Product Management Maintenance Support Contract Manager Factory Consulting Services Professional Services Non-Standard Terms & Conditions Pricing

  8. WW Pricing D. Mol / Global Bus Mgmt Group Service Bid/Win & Sales Service Manager Mfg., IM, EDI, ExtraNet, Delivery, etc. Leasing Compaq Capital Gerry Miller / FAM Direct Model P. Hashway Senior Financial Approval Other GEO's for global capabilities US Pricing AM, NASM & RFM Global Issues B. Seidle Global Product Div. For $ and roadmap input Product / Technical ETSS / SE Legal Attorney Miscellaneous BEM / Account Team Product Marketing ETSS / BEM Acct Mgmt Issues Account Team Contract Management Relationships – Interpersonal Contract Manager

  9. Organization Options: Functional (Skill Centers) • Strengths • Skill Development • Technology Development • Technology Transfer • High personnel loyalty • Weaknesses • No dedicated customer interface • Unclear Project Priority • Confused communication • Difficult Schedule/cost controls Adapted from Reference Text, pg. 136

  10. Organization Options: Functional (Product/Services Centers) • Strengths • Product/Service development • Technology development • High personnel loyalty • Weaknesses • Unclear customer interface • Difficult technology transfer • Unclear project priorities • Confused communications • Difficult schedule/cost controls Adapted from Reference Text, pg. 137

  11. Organization Options: Pure Project • Strengths • Clear Accountability • Clear Customer interface • Strong Controls • Strong Communication • Dedicated resources • Weaknesses • Talent duplication • Less Technology awareness • Reduced functional development • Irregular workloads • Higher staffing levels Adapted from Reference Text, pg. 138

  12. Organization Options: Conventional Matrix GeneralManager ProjectMgr. A1 Engineering Manufacturing Marketing &Sales Contracts &Legal Finance ProgramMgr. A ProjectMgr. A2 ProjectMgr. A3 • Strengths • Single point of contact • Clear Customer interface • Quick response • Reduced duplication • Technology transfer • Disbanded easily • Weaknesses • High management skill required • Competition of resources • Management cooperation required • Reduced employee recognition Adapted from Reference Text, pg. 140

  13. Organization Options: Collocated Matrix GeneralManager ProjectMgr. A1 Engineering Manufacturing Marketing &Sales Contracts &Legal Engineering Manufacturing Marketing &Sales Contracts &Legal • Strengths • Single point accountability • Clear customer interface • Good control • Single location • High level of teamwork • Weaknesses • Reduced technology awareness • Reduced management support • Reduced functional sharing • Staffing irregularities • Higher costs (Relocations) Collocated Adapted from Reference Text, pg. 141

  14. Organization Options: Summary • Numerous possible organizational structures/designs • No single-best solution for all situations • Organizational structures must vary depending upon the size, complexity, and phase of the project cycle OrganizationalSpectrum Functional (Skill Centers) Organization Functional (Product/Services Centers) Organization Conventional MatrixOrganization CollocatedMatrixOrganization (Hybrids) Integrated Project Team Organization PureProjectOrganization

  15. Global Contract Mgmt Issues • Centricities: Language, culture, time-of-day • Span of Control • Command and Control • Priorities, processes, policies • Training • Institutional support: Logistics • Interpersonal support: Coaching, Counseling, Mentoring • Fundamental challenge: Corporate governance vs local empowerment/control

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