The Transformation Needed for CCM: Part 1

• Part 1: Transformation is a Necessity
• Part 2: The Centrality of Value
• Part 3: Value Management – the Missing Piece
• Part 4: How to do it

Everything we do is under the banner of “Value Management”. It’s what’s needed to truly achieve the transformation needed for the CCM role – and the relationships it’s responsible for – to not only survive, but thrive, in today’s complex world.

But why is transformation needed? And why is “Value Management” the answer?

In this first part, we look at the state of play with contract management, and why transformation isn’t just a nice-to-have; it’s a necessity.

There’s a lot of focus at the moment on where the Contract and Commercial Management (CCM) role might be heading.

At last week’s WorldCC EMEA Summit in Edinburgh, for example – which I spoke at – there was (rightly) a lot of attention on things like the continued and accelerating rate of change, the need for adaptability, and the impact of AI.

As we’ll see in Part 4, there is a real transformation opportunity here for CCM professionals.

But before that, transformation is more basically a necessity for CCM, given the state of play.

Let’s see why, beginning with the challenges.

The Challenges

The challenges we face are familiar and obvious.

A sense of building on shifting sands; the challenges of unforeseen disruption; the accelerating rate of change; strategy not keeping up; capability lagging behind; and so on.

But what might be less obvious is that it’s Complexity that’s driving these challenges.

And it’s also – as we’ll see in Part 2 – what guides us as to how to respond effectively.

So we need to start by understanding what Complexity is.

And the first thing to say is that it’s absolutely fundamental to today’s world:

• The familiar “VUCA” acronym (Volatile, Uncertain, Complex, Ambiguous) suggests it’s one aspect of several.
• But Complexity is the root of all the others: our world is volatile, uncertain and ambiguous precisely because of Complexity.
• (And so whilst it’s less catchy, C-UVA would be a more accurate acronym.)

Now, “complexity” is a familiar word, but what is it?

Well, at its most basic, Complexity begins with interconnected people and organisations, with rich information flowing between them, acting and reacting, based on their different perceptions and priorities.

The result is called “emergence” – change that’s bottom-up, self-reinforcing, exponential, and (crucially) that creates something greater than the sum of what was there before: something new emerges.

Complexity is therefore the source of all unpredictability, disruption and risk:

And in recent decades, technology has accelerated and fuelled every aspect of complexity to exponential levels.

With the Internet, smart phones, social media and – most recently – AI arriving in the public sphere, the amount, speed, and availability of information have all shot through the roof.

This has powered unprecedented interconnectivity, unprecedented ease of interaction, unprecedented interdependence… and ever more rapid change.

The resulting disruption we experience is often then summarized as PESTLE.

PESTLE disruption and its impact

I’m sure you all recognize these pressures:

But compounding all this is how we currently work.

Because, in our mostly vertical organizational structures, or in the nature of most of our contracts, we’re primarily working top-down… when, as we’ve just said, Complexity means that things are increasingly happening bottom-up.

We’re trying to define, control and optimize in the face of constant and unpredictable change, which just can’t work.

And so there are also challenges that flow from how we’re working:

Is it then any wonder that our key relationships often end up really struggling?

Struggling relationships

As you can see here, they usually begin fairly enthusiastically, but then reality bites and difficulties set in. 18% then fail, and of the remaining 82%, not even half – barely a third overall – fully realize expectations (and that’s probably generous):

The waste and cost – not just financial, but in human terms, too – are extraordinary.

That’s already an existential threat.

But there’s more:

• If anything, it’s getting harder.
• WorldCC reported back in 2023 that 40% of the CCM profession was considering leaving within 2 years.
• Since then, we’ve seen the advancement of AI which – yes- brings great opportunities, but also poses a threat to more traditional CCM roles.

So all of this is why transformation is essential.

But if that’s the case, why is managing value – Value Management – the way forward?

And how will it transform the focus, practice and profile of CCM?

That’s what we’ll start looking at next time, beginning with the centrality of value.