How much has the UK’s energy market changed over the past decade?
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Will there be a new entry straight in at Number 1?
The most heavily negotiated terms, according to research conducted by the International Association for Commercial Contract Management (IACCM), and published in last years results, are as follows:
The majority of the remainder are commonly referred to as “boilerplate terms” and do not typically attract much, if any, attention and debate when contracts are negotiated; this includes the Force Majeure clause. As a result of such an unprecedented and unforeseeable worldwide event as COVID-19 Pandemic, previously overlooked and historically generic words that comprise most Force Majeure provisions are surely now going to attract massive attention going forward…and will presumably already have jumped to the top of the Top 10 most negotiated terms when they are published by IACCM later this year?
Anecdotally, there is a real focus on the future and more positive collaborative relationships in the future as a result of COVID-19. IACCM have recognised the maturity of contract management space has improved. However, adjusting to the “new normal” will require:
COVID-19 has impacted contracts worldwide, however, some geographies much more than others. Those geographies whose organisations have adopted digitisation over the past decade are those who have been better equipped to survive and maintain relationships. For example, although the US have been hugely impacted, their ability to negotiate, remain agile and maintain relationships online has enabled them largely to uphold deliverability in many areas.
Thus, when managing your own organisation it is essential to analyse all contracts, identifying geographies, evaluating their potential impact, recognise alternative suppliers if necessary, consider clauses within contracts and determine whether it is possible to delay or terminate / exit contracts if necessary.
To survive it is necessary for organisations to implement their best practices in business continuity. Therefore it is essential to continue business in a changing environment where possible, to remain focused on capability and deliverability, to ensure employees are provided with the correct equipment to recommence services to clients from home and to reach out to the supply base and ensure lines of communication are effective and uninterrupted.
During these times, the effectiveness of technology and Artificial Intelligence (AI) will prove more and more valuable if implemented effectively. In terms of mapping and understanding complex problems and solutions and removing inefficiency in the supply chain.
IACCM have undertaken many surveys and research having surveyed over 500 companies ranging in size. A lot of organisations have different systems in place for buyer and seller sides of their organisation.
Well over 80% of the community have been working from home and we are as country now looking at protocols for returning to work, which is a huge test of the resilience of business processes. However, in order to pivot to the new normal, contracts must be digitised and global teams must collaborate on cloud platforms. There will be far greater concentration on relationships and mitigation processes and of course all organisations should prepare for the future by adopting these practices to the best of their ability – as this might be top of the Top 10 for some time to come.
