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CIPS: “Often an overlooked key skill, Contract Management is not something to be handed to another department such as legal. Contract Management is the engine that drives true value across the supply chain and should stay with dedicated professionals.”

The skill of Contract Management can, at times, be critically undervalued. The Chartered Institute of Procurement and Supply Chain itself recognises that relationship and performance management is often ‘overlooked’, not handled by specialists and an afterthought for professionals with other responsibilities.

Healthcare is no exception to this. Too few Public Health organisations effectively staff their commercial teams with dedicated Contract Management professionals. Cost pressures have forced Trusts to make Contract Management an additional responsibility for Procurement, IT, Estates and sometimes even Clinical teams.

Boston Hale’s Public Health clients were surveyed on Contract Management within their organisation:
Dedicated CM Function:                                                                 9%
Dedicated CM Staff for some areas (E.g., IT Contract Manager):  44%
CM only as a subset of Procurement:                                            40%
CM Managed by non-commercial department:                              7%

Why is Contract Management important in Healthcare?
The technical nature of equipment and consumables purchased by healthcare organisations can mean that their list of potential suppliers is limited and has been for many years. Commercial functions already know where to buy from, what the price will be and have established relationships with suppliers. This is demonstrated by the numerous Framework providers such as CPP, LPP HealthTrust Europe etc. With this in mind, can value be best added by managing these existing relationships, developing efficiencies and improving service levels?

Perhaps a shift in focus from Procurement to Contract Management would reflect the increasing maturity of Healthcare Supply Chains.

The benefits of a dedicated Contract Management function:

  • Maximise cost savings and efficiencies through entire contract lifecycle
  • Free up Procurement to focus entirely on sourcing new suppliers, cost reductions and negotiation
  • Alleviate stakeholders from their commercial responsibilities
  • Effectively engage with complex contracts, especially useful with outsourced clinical services
  • Quickly and effectively solve stakeholder’s supplier issues
  • Manage supply chains through unforeseen circumstances (we’ve had plenty this year! Covid-19/Brexit)
  • Increase focus on improving service delivery, monitoring quality and assessing supplier performance

So, what now?
With the financial year drawing to a close, many will consider how they can make their commercial functions more mature, accountable and effective in 2021. I believe the real growth potential in Healthcare commerce is in Contract Management and those that recognise this have the opportunity to improve vastly.

If you’re interested in building a dedicated Contract Management function or developing your existing team, Boston Hale can guide and support you with this. With specialist Healthcare Recruitment Teams across Procurement, Finance, Supply Chain, and Contract Management, Boston Hale is well versed in providing quick, professional and market-leading solutions to all your staffing needs.

 

Email: mgilbert@bostonhale.com
Tel: 020 3762 2497

 

 

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