IVI Framework Viewer

Representative POMs are described for Contract Preparation and Closing at each level of maturity.

1Initial

• Practice

  Best endeavours of available personnel.

2Basic

• Practice

  Prepare contract terms and conditions on a case-by-case basis focused on a limited set of primary variables, such as cost, security, quality, and legal recourse.

  Outcome

  Whilst a consistent approach may not be evident, the basis for more generalised terms and conditions begins to emerge.

  Metric

  % of contracts that are based on the same template % of failed sourcing dealsAverage duration of a Tier 1 supplier partnership

• Practice

  Prepare and close large sourcing contracts with some input from the procurement function.

  Outcome

  The involvement of the procurement function in contract preparation and closing benefits the large sourcing contracts by the addition of a stronger business perspective.

  Metric

  % of contracts designed in co-operation with corporate procurement

3Intermediate

• Practice

  Adapt sourcing contracts to reflect the specific requirements and circumstances of the sourcing context, including consideration of the supplier's own success criteria .

  Outcome

  Contracts reflect the overall goal of a value-creating supplier partnership, not just a cost-saving one.

  Metric

  Average duration of a Tier 1 supplier partnership% of sourcing partners that are not meeting performance targets

• Practice

  Ensure that contract preparation and closing routinely includes input from the procurement function.

  Outcome

  The IT sourcing contract is aligned with the procurement function and the wider organization's contracting process.

  Metric

  % of contracts designed in cooperation with corporate procurement

4Advanced

• Practices

  • Confirm that all pertinent contract elements reflect the organization's risk appetite and strike a balance between incentivizing innovation by the IT supplier and ensuring cost-effective IT product and service delivery.
  • Consider clauses that specifically address the supplier's own success criteria in sourcing contracts.

  Outcome

  Sourcing contracts provide win-win opportunities for both the organization and the supplier.

  Metric

  Average duration of a Tier 1 supplier partnership

• Practice

  Fully integrate IT contract preparation and closing with the procurement process.

  Outcome

  Potential synergies can be realized.

  Metric

  # of synergies realized

5Optimized

• Practice

  Ensure inter-supplier operational level agreements (OLAs) can support agility and innovation for the organization in sourcing and multi-sourcing contexts and are included in contracts.

  Outcome

  Suppliers are incentivized to co-operate with one another for the benefit of the organization and for themselves.

  Metric

  % of multi-sourced spend for which inter-supplier OLAs are in placeThe frequency of reviews of OLA/SLA templates

• Practice

  Continually review contract preparation and closing activities on an organization-wide basis.

  Outcome

  Realized synergies can be optimized.

  Metric

  # of joint meetings with procurement on contracting improvement# of synergies realized