Open Connections

• 1: Home
• 2: Services
  • 2.1: Support
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  • 2.5: Project Implementation
• 3: Products
  • 3.1: Enterprise Content Management
    • 3.1.1: IBM FileNet P8
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    • 3.2.1: Kofax
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• 4: Solutions
  • 4.1: Contract Management
  • 4.2: IVA and Debt Management
• 5: Corporate Profile
• 6: Contact Us

Contract Management

The Business Challenge

In today’s economic climate driving efficiencies in internal processing and managing supplier costs are both significant business challenges. Contract lifecycle management is at the heart of this challenge.

Organisations find themselves with contracts related information, in both paper and electronic formats, scattered across many stakeholders. This is generally accompanied by ambiguity concerning which is the most current version of a document. Many times approvals are not tracked and managed, allowing critical paperwork to get lost in the shuffle. Relevant information resides in, and arrives from, disparate sources – making integration, accessibility and management of contractual information a challenge.

Appropriate and timely approvals of contracts are essential. Industry studies indicate that a one day reduction in the sales cycle is worth, on average, £50,000. Organisations must properly archive and manage contracts throughout their entire lifecycle to comply with Government regulations and to avoid negative sanctions in the event of litigation. There is an ongoing need to mitigate risk and lower operational costs while maximising revenue opportunities. In one industry study, respondents report that, on average, their enterprises lose 9 percent of their revenues due to regulatory penalties, missed deadlines, lost sales, “maverick" pricing and transactional errors.

To maintain a strategic advantage, corporations need the ability to access knowledge found in a multitude of contracts. This enables them to effectively negotiate favorable terms, and have the ability to manage project milestones. Many organisations struggle to track contract compliance and renewals.

While it’s critical to have access to contract information for analysis purposes, many organisations have limited ability to actively track spend against contract terms and milestones. Lack of awareness of inconsistencies in contracts administration can cost organisations time, money and resources. Decentralised purchasing and contracts administration may inhibit organisational control and visibility that may lead to missed opportunities for volume discounts. Organisations are often unable to leverage contracts information that would facilitate internal reporting and monitor expirations and renewals.

The Solution

Drafting the Contract

Applying BPM to the contract drafting and negotiating steps enables an organisation to exercise consistent contract processes, providing a greater of confidence that contracts have been drafted by the appropriate persons in the appropriate sequence using the correct contract templates and standard terms and conditions. In the event that there is an unexpected delay in the creation of the draft, the status and state of the contract can quickly be determined using BPM.

ECM enables an organisation to consistently and securely create and update the templates, clauses, terms and conditions that are used to draft contracts. The advantage of applying ECM to this process is to ensure that only approved content is made available to the individuals who will utilise the content in the contract creation process. Additionally, whenever updates need to be made to any of the standard contract content, ECM/BPM can ensure that a consistent process is used to update, review and approve any changes.

Microsoft Word is the standard tool for creating contracts. The advantage of applying ECM to the contract process is that the persons responsible for drafting, negotiating and approving the contract can access the current version of the contract, update it and save the updated version entirely from within Word. Because ECM automatically manages the versioning process, it is very easy to revert to a previous version of a contract draft if necessary.

Negotiating the Contract

ECM/BPM can manage the negotiation process as efficiently as it manages the draft process. The current version of the contract can be made securely accessible to outside parties involved in the contract negotiation process. Alternately, the current version of the contract can be automatically emailed to the outside negotiating party for their review and updates. When the updated contract is returned via email from the outside negotiating party it can automatically be captured and the person(s) responsible for negotiating the contract are automatically notified to begin the next contract review step of the negotiation process. Any additional supplementary information that is provide or added during the negotiation process can also be captured, associated and stored with the contract, thereby maintaining a complete history of the contract and its supplementary information

Approving the Contract

Employing ECM/BPM to manage the approval process allows an organisation to establish a consistent and predictable process for approvals. An approval process can be defined for each type of contract. The approval sequence can be established based upon the individuals, roles and/or authorisation levels required to review and approve a contract. Should there be any question as to the current status of a contract, BPM can be used immediately determine status. In the event of an unexpected delay in the approval process, automatic notification can be sent to a manager with the goal with the goal of escalating or remedying the problem. Individuals with approval authorisation may delegate to subordinates in the event of absence or inability to review/approve in a timely manner. BPM can automatically record who approved what contract when, should there be a need to audit the process. Organisations that process large volumes of contracts may use BPM’s metrics to determine the overall efficiency of the contract process and identify tasks or areas which could be executed with greater efficiency. Managers responsible for the overall contracts process can use business performance metrics to demonstrate the need for more resources or more efficient processes in anticipation of an increased workload.

Managing the Supplier

IBM’s Analytical capabilities from the Cognos family of products can be used at this stage to draw together the information required to assess the actual performance of the supplier against the contract terms and be used as leverage to renegotiate contract at the point of renewal or as data points for competitive contract award – all of this can be done from the same Contracts Framework providing a uniquely integrated spolution to managing the whole contract lifecycle.

Summary

The Open Connections’ Framework for Contracts Management provides comprehensive, centralised and cost-effective capabilities for organisations to create, track and manage all types of contracts across the entire organisation. By using the solution, companies are assured that all related contract documents are properly filed, secured and accessible. The system ensures that users are always working on the most current version of documents and maintains the appropriate audit trail of version, reviews and approvals.

Approvals are tracked and monitored so that process bottlenecks are quickly identified and remedied. Automated reminders and notifications prompt users for actions that help to meet key deadlines and program milestones.

To find out more call us now.....

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