Our Strategy

2. Our Purpose: 
Better business, better contracts, better society

Why we exist

In 2018, the value of global trade was around US$22.5 Trillion^[1]. From the earliest days of barter, humans have progressed from exchanging products of nature to products of manufacture, to complex services and now even ideas. 

[1] Source: UNCTAD secretariat calculations based on COMTRADE and UNCTADStat data.

Trade and trading relationships are at the foundation of human society, enabling prosperity and driving social benefit. Its success depends not only on the continuous invention of products and services but also on establishing appropriate and innovative rules and practices and behaviors to govern the exchange of those products and services. 

We live in a world of rapid change. The growing speed of invention, the greater diversity in the types of exchange that occur, and our increasingly global markets have all contributed to a far more complex environment for trade. This turbulent environment has led to a need for constant innovation in commercial rules and contracting practices which has in turn led to a need for far greater commercial competence and emotional intelligence. 

Historically, there was no single body that recognized ‘commercial management’ as a discipline. That changed in 1999 when IACCM was founded as a not for profit association.

The association’s Purpose is to support in shaping the rules for global commerce and increase organizational, individual and institutional capability in commercial practice, in particular through effective contract and relationship management. 

The importance of distinguishing between Commercial Management and Contract Management

Both commercial and contract management are influenced by regulation and legislation, whether at a global, regional or national level. Trade therefore operates within a growing framework of such rules that are increasingly in need of revision and reimagination.

Commercial Management

Commercial management is the discipline that both informs and implements strategy and policies in the context of legal and regulatory frameworks. It informs through testing and aligning market requirements with organizational capability. It implements through ensuring effective and efficient operational procedures that establish and maintain those capabilities.

In going to market, any product or service needs to be supported by performance commitments that are relevant to its customers and consumers. Those commitments may be specific to the product or service (for example, price, delivery, maintenance and support) or generic to the organization (for example, brand values, ethical standards or regulatory compliance). Commercial management is the process through which required performance commitments are gathered, assessed and reconciled, taking account of the needs and interests of all relevant stakeholders and ensuring their affordability and sustainability.

As an association, we seek to influence and contribute to the growing body of rules and practices within which global trade operates while inspiring and encouraging commercial innovation. Together these represent the commercial competence that is critical to any organization.

Contract Management

Contract management is a discipline that supports commercial management through the preparation, negotiation, implementation and oversight of legally enforceable performance commitments and risk positions, both outbound (to the market) and inbound (from the market). It converts commercial policies and practices and technical capabilities into specific terms and conditions that are offered to or required from its suppliers, customers or business partners, ensuring compliance or gaining approvals for non-compliance. Through active monitoring of performance needs and outcomes, contract management informs commercial management with regard to actual and required commitment capabilities, together with their financial and risk impact.

Contract Management and analytics is not simply an operational function overseeing transactional negotiation, implementation and management of contracts. Increasingly it is a critical vehicle for high value management information that supports strategic decision-making.

As a part of commercial policy and practice, contracts play their own critical role in binding our world and our society. In 2016 the awarding committee for the Nobel Prize observed that:

“…modern economies are held together by innumerable contracts… and since such relationships typically entail conflicts of interest, contracts must be properly designed to ensure that the parties take mutually beneficial decisions.”

Yet it is fair to say that today contracts are increasingly fractured and threatened by the disruptive forces that we have referred to.

As an association, we seek to transform contracts and the contracting process, such that they become instruments of fair dealing, that they themselves, and the process surrounding them, promote trust, generate economic benefit and support social inclusion.

Our unique position

There is growing executive awareness of the value that comes from excellence in contract and commercial management. In many respects this overarching discipline is today coming of age. Because of our connected world. Because the variety and complexity of commercial relationships has just exploded and will continue to do so. Because we live in a world where social trust continues a steady decline, where the impacts of inequality and competition are increasingly visible. And with all of that, comes an ever-increasing need for people to demonstrate strong commercial capabilities, to navigate through those environments and deliver that value. 

As well as being the world’s only association to recognize the critical competence of commercial management, we are also the world’s only association that seeks to unite the many stakeholders in a commercial relationship. We remain steadfastly committed to raising the quality and integrity of commercial relationships around the world and it is through the incredible functional, industry and geographic diversity of our membership that this is enabled.

Our role is to support our members, to help them and their organizations to navigate the change happening all around us and prepare for a purpose driven and sustainable future.  

Our Strategy outlines how we plan to continue supporting our growing membership and help them to realize the Vision of the association.

In simple terms, there are four forces driving the evolution of trading relationships and demanding increased focus on contracting and commercial capabilities.

Globalization. The most significant is the continued disruption caused by the evolution to a global networked economy, not only has this destroyed many traditional trading patterns, but (as highlighted above) it is creating dynamic and unpredictable market and geopolitical conditions, including the rapid formation and dissolution of complex supply networks.

Shift to Services. At the same time, society and business are increasingly focused on the quality of outputs and outcomes, as we move from a world of traditional products to one of customer experience, services and solutions.

Regulation and Transparency. There is also continued growth of regulation and associated levels of transparency and accountability. In all cases, organizations have recognized the need to make better decisions in selecting their trading partners and they need to improve the oversight and segmentation of those relationships. Commercial judgment and contracting competence are fundamental to financial returns, business controls and management visibility.

Digital Revolution. Finally, the digital revolution is having an impact on all businesses. For example, the growth of connected devices through the Internet of Things (IOT) is starting to force businesses to rethink how they are structured and organized, and the growth of social media is challenging the way businesses deliver to customers and how they interface with, and work with, their supply chains.

In our 2019 strategy paper we identified the following key challenges:

1. to raise awareness of the role that the association can play in enabling digital transformation, automation and re-skilling, on boarding and upskilling, thereby raising the quality and value achieved from commercial relationships;
2. to support and inspire our current members in a way that raises their credibility as agents of change and leaders of future commercial capability.

While these activities remain fundamental to our relevance, we have recognized the need to expand our ambition and to demonstrate a level of leadership and influence at a higher level in order to raise the status and perception of Contract and Commercial Management as a discipline. 

Delivering our Strategy

Our Strategy is delivered in four distinct contexts, consistent with our Vision and Mission statements. Each tier is supported by specific activities and offerings:

1. Policy Shaping and Advocacy

We influence, shape and contribute to commercial policies and practices. Examples range from our involvement and collaboration with such organizations as Open Contracting Partnership and OECD, our multi-jurisdictional public procurement research and our involvement with working groups such as Commercial Confidentiality, Modern Slavery and Social Value. 

2. Industry Enablement

We contribute to global efficiency, ethics and commercial innovation. This includes our work on industry standards, principles and practices (including public procurement), academic research, publications, conferences and Innovation & Excellence Awards, together with participation in relevant committees and with Non Governmental Organizations (NGOs).

3. Organizational Capability

We help organizations to raise their skills or competencies through Capability Maturity Assessments and Executive Briefings, technology tools and advice, corporate learning programs, commissioned research projects (plus selective inclusion as a Research Forum member), Corporate Skills Assessment, Relational Contracting Workshops, recruitment support, Contract Design and Benchmarking.

4. Individual Performance

We support the individual practitioner community through individual learning, certification, mentoring, continuing professional development, member library, expert and thought leadership webinars, ‘communities of interest’, conferences and local member meetings.

Association Goals

Reputation and Influence

Market awareness of the importance of contract and commercial management is increasing and has contributed to the growth of our reputation and outreach. It has also led to an expansion of interest from multiple other sources.

We see this expansion of interest as a significant opportunity on which we can build and grow our ambition, demonstrating a level of leadership and influence at a higher level that will raise the status and perception of Contract and Commercial Management as a discipline. This is at an industry body level, through NGOs and academia and with global, regional or national regulators and policy making bodies.

Our continued research activities remain fundamental to the association’s reputation and influence and must be communicated effectively to all, from practitioners to the Board.

We will continue to raise the profile of our work through marketing and communications and via the nature and influence of our connections and partnerships. Our team and our partners need to feel inspired by the importance of our ‘Purpose’.

Membership Engagement

With a growing membership it remains of vital importance for the association to remain connected and to demonstrate its relevance. 

It is still the case that only a relatively small number of practitioners in this field have a directly relevant qualification. Providing the education, training and support required for competency development remains a core focus together with encouraging commitment to lifelong learning.

We seek to inspire our members through the sharing of innovations and success stories, and we seek to enable them by providing intuitive platforms to ensure professional resources are accessible and to facilitate their engagement.

Recent initiatives in creating the Global Council (with a strong geographic and industry focus) and greater outreach to our Fellowship are important steps that support closer and sustained connection to our membership. Indeed, to fulfil our influencing ambition and participate on a growing number of external bodies we hope also to encourage a greater level of volunteers amongst our members.

Membership Growth

Our membership is diverse. This diversity is in part a reflection of the current fragmentation of contracting and commercial process, which also helps to explain why organizations are today struggling to address weaknesses in the process.

Diversity of role and function also represents a challenge as it means we are not a natural home for a pre-existing and well-defined group of professionals. However, it is our view that the diversity of the membership remains a critical contributor to the achievement of our Vision and that this current diversity will steadily reduce as Contract and Commercial Management is increasingly appreciated as a discipline, rather than a job.

The last 20 years has in many respects shown a shift from us making outreach to the world to the world coming to us. We continue to grow on average at about 1,000 members a month and with every new member we take pride in the fact that we continue to add power to our voice and demonstrate our relevance.

There is a steady increase in commonality of understanding that Contract and Commercial Management is a unified area of practice which should be applied on both sides of any commercial relationship. Our unique value proposition is that we act as the convener of those people who represent this competence.  

Member growth will continue to be driven by the awareness and excitement that we generate because we truly represent the future of Contract and Commercial Management.

We grow because we stay ahead of our members and offer hope and aspiration for the future. This is a fundamental attribute that we must not lose.

A shift to ‘influencing and advocacy’  

In 20 years, IACCM has grown from a handful of participating companies to a truly global organization with over 65,000 members. Yet there is still so much more to do.  

Commercial and contract disciplines have always struggled to achieve the balance between their legal and compliance role and their contribution to economic value and financial returns. Market volatility and changing needs to provide social value and sustainable outcomes, to be transparent, fair and reasonable, has made this struggle even more pronounced.

We will continue to work on providing our growing community with the material and insights that support them in their roles and in their promotion of contract and commercial excellence within their organizations. We will also continue our efforts to inform and inspire senior management, however we now believe that the time has come to supplement these ‘push’ and ‘pull’ strategies with a growing focus on advocacy.  

Our commitment to our members

In the Vision and Mission section of this Strategy we set out how we fulfil our Mission and seek to achieve our Vision.  

1. Raising Awareness (research, publications, communications, public speaking and working groups)
2. Increasing Insight (events, member networking, benchmarks, analytics, education and inspiration)
3. Creating Standards (certification, models, working groups)
4. A Strong Team (a core team and a network of partners)

1. Raising Awareness

Our reputation for thought leadership, responsiveness and in-depth expertise are sources of competitive advantage.

As the only global association focused on contract and commercial management, from inception World Commerce & Contracting has been a ‘thought leader’ in its field. Over the past 20 years we have worked tirelessly on building a practitioner community, supported by robust research and resources, helping them to raise awareness of the potential value achieved from this discipline.

We will continue to provide and evolve services and offerings that meet the needs of our membership to support their growth and to put in place a robust marketing plan that helps us to continue to generate the association’s core revenues.

Increasingly we have recognized the need to advocate at a different level, including working more closely with industry bodies, NGOs, academia and working groups. Our involvement in these sort of activities raises awareness of the importance of commercial competence from a different standpoint allowing our members and their management to view the role with a different lens.

2. Increasing Insight

We aspire to create a sustainable global membership, inspiring and empowering individuals through the member networking that we facilitate including conferences and events, the education that we provide and the research, benchmarks and analytics that our members can gain access to.

To achieve our Mission, we actively encourage, support and serve a diverse range of markets and interest groups where knowledge sharing is paramount.

3. Creating Standards

We created the world’s first common body of knowledge to support coherent and consistent definitions around the disciplines of Commercial Management and Contract Management. This body of knowledge has led to globally recognized certification programs which support fulfillment of our Mission.   

We have been at the heart of some early successes, with initiatives in areas such as the development of contract standards, the promotion of contracting principles, the emergence and uptake of user-based design for contracts and the movement for increased transparency. The forces driving these changes are in part ethical in nature, but more often they are due to a growing appreciation of the economic advantages that accompany increased efficiency and the potential competitive advantages of brand integrity. New technologies underpin this shift and will create added momentum. Our role is as instigator, catalyst, developer and advocate of these emerging standards and practices.

We have previously discussed the opportunity to become a standard-setting body in terms of industry standard agreements and this is a significant part of our strategic focus, building on existing activities and achievements around Contract Design, Standards and Contracting Principles. 

4. A Strong Team

We will continue to foster a highly committed, strongly motivated and appropriately rewarded team.  

We will ensure efficient processes and an organizational design that delivers at scale and secures high levels of member engagement.

We will make effective use of advanced systems and software to support all aspects of our work including global reach.

We will maintain a sufficient body of credible and influential experts and thought leaders that the association can deploy to promote and lead delivery of major projects and change initiatives.

Viewing Contract and Commercial Management through a new lens

Transforming Contracting

Rather than designing for mutual benefit, contracts are more often used as instruments of power and control. 

Our research indicates that contract terms are typically penal in nature – we contract for the divorce rather than the marriage – and they are complicated to understand. They often reflect commercial policies and practices that are defensive and risk-averse in nature, even though market and economic conditions demand different approaches, approaches that are flexible, adaptive and creative.

In addition, contracting and its related policies and practices, whether looked at from a buy or sell side perspective, remains one of the least reformed business processes. This is due in large part, as already indicated, because contracts are viewed as instruments of risk transfer and control.  

Transforming contracting will generate increased economic wealth, it will support higher ethical standards, transparency and it will encourage commercial innovation. To achieve this purpose, we must convince business and political leaders of these benefits and the feasibility of this transformation and we must energize and upskill those who are responsible for contract creation and management.

Relationship Resource Planning

In every commercial relationship, the parties operate within a governance framework, sometimes unconsciously and other times with a great deal of planning, negotiation and documentation. Determining and then operating this framework is Relationship Resource Planning (RRP) – the series of processes and commercial practices through which the parties interact and conduct their trade. The efficiency of RRP has a major impact on the cost, quality and speed of the associated trade. 

RRP governs interactions between trading partners. It establishes the what, why and how of their relationship, supporting data flows, communications, risk and opportunity analysis and resolution, performance management through resource availability or allocation. 

All trade is by its nature relational. The formality that surrounds the governance of that relationship varies. It may or may not include a physical contract. In some cultures, it is managed through reputation and familiarity with the other party. Increasingly, however, it is at least in part managed through contracts. When performance is especially complicated or spread over a long period of time, requiring the commitment of significant resources, its management will be undertaken through the formal contract, supplemented by a traditionally less formal concept of ‘relationship management’.

As we have already observed, trade lies at the foundation of human society, underpinning economic wealth and social wellbeing. It takes many forms – goods, services, intellectual property, ideas. Every form of trade is accompanied by a relationship (between the affected parties), obligations (associated with what each party will do) and rules (laws, regulations and social norms). There is variation in how relationships, obligations and rules are managed. On some occasions, such as when buying goods from a store, they are so well established that the rules and obligations are assumed and ‘the relationship’ may simply be fleeting. But as we go up the spectrum of value and when we see potential for risk, the level of formality increases.

In this context, all contracts are in fact relational, operating as one governance option in a spectrum of commercial relationships. As we move across that spectrum, the extent of required formality grows. 

Ethics and Social Value

At both a social and political level, there has been a steady growth of focus on the ethical and social values demonstrated through an organization’s sense of purpose and its commercial practices. The association and its members clearly have a role to play in responding to this trend.

We have already started to engage in initiatives in this field. Part of our role will be to educate and support our members – for example, how to define, measure and contract for social value. In other areas, such as visibility into the integrity of supply ecosystems, our research will identify and promote good practice. Another key aspect is the extent to which the association may operate as an intermediary for members who have concerns over the ethical practices they observe within their industry or company, becoming an advocate on their behalf.

This latter possibility requires thoughtful consideration and planning, as does the potential role that the association is being asked to fulfill on semi-regulatory bodies.