With approximately 8 000 suppliers, contract management is a necessity, says Ian Russel, Absa's chief administration officer.
Having joined Absa following the Barclays deal in July 2005, when Barclays acquired a controlling stake in the group, Russell decided it was a good opportunity to adopt the Barclays approach to contract management. "We wanted to focus on leveraging Barclays' intellectual property best."
According to Russell, "Procurement needs contract management."
He says Absa uses SAP for their contract management, but before the system was fully implemented, they had to organise their contracts a bit more primitively. "The basic principles can be implemented almost immediately. Initially, we used Excel spreadsheets."
Russell says the main benefit of contract management is control. "We now know that we're spending with our suppliers of choice."
He explains that the danger with contract management is that it is crucial to keep everything up to date. If the contract management database isn't kept up to date, "then everything gets out of step."
Being empowered
A benefit unique to SA, as Russell explains, is being able to keep track of BEE. Absa works according the Financial Services Charter, and Russell says Absa is comfortably over the required 50% of procurement spend that must go to black-owned companies.
He says one can see the BEE levels easily in the suppliers database and adjust the business and spend accordingly. "How can you accurately attest to BEE without the data?" Russell asks.
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