Kudos to IACCM’s Tim Cummins for surfacing a great topic in a recent post considering the role of Contracts & Social Networkingwithin companies and amongst their suppliers, customers and partners. Here at Spend Matters, we’ve periodically investigated the topic of social networking and procurement from time-to-time (including the power of social networks to help manage supply risk, including machine-driven approaches that securely link industry data across peer and competitive companies such as SAP Supplier InfoNet). But arguably, the topic is best addressed on a specific functional –and even modular — level in the case of different processes such as strategic sourcing, shopping, tactical buying, supplier management, and, of course, contract negotiation and ongoing contract management.
In his post, Tim introduces the topic noting that, there “are the inevitable concerns over the use of networking sites such as LinkedIn or Facebook for posting discussion items and the threat to confidentiality these might entail; or the effectiveness of such sites for recruitment; or their informal use for inter-company communications on contract issues.” Yet it’s clear, for many reasons, including the rise of younger workers accustomed to checking Facebook before they brush their teeth in the mornings (trust me on this one), that social networking is making its way into the workplace and will certainly have a greater impact on contracting whether we like it or not.
But where and how is the question. Drawing on the eHarmony or Match.com online dating analogy, Tim suggests one area is partner selection. Here “the introduction of evaluation criteria allows the creation of short-lists for potential partners, spreading far beyond the traditional limits of geographic boundaries. Monitoring the success of these relationships is starting to generate more accurate predictions of the criteria for successful matching…Finding the right type of partner, who not only offers the right sort of product or service but also shares similar or complementary ethical principles, cultural perspectives, appetite for risk or record for innovation, could certainly be enhanced through computer matching.”
Further, Tim hints that the predictive nature of networks such as these are what lend their appeal, and potentially could be replicated in the world of supplier networks and contract management. In Part 2 of this post, we’ll share a few of our thoughts on additional ways that social networking could play in the world of partner selection and contract management, specifically, including the potential for what we describe as a “Big Step Forward” for social and community aspects in contracting.