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Accelerating Sales Through Better Contracting

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  • There is significant data that shows how automating contract management processes and data can benefit a company. Point solutions aren’t good enough however. This table illustrates the step change increase in capabilities for various contracting functional requirements in moving from a contract management automation solution to one that is integrated with a CRM system. The significant increase in Process Management isn’t all that surprising…integrating two formerly disconnected processes will have a positive process impact. But look at the significant increase in opportunity management, security, and fulfillment. Have you ever had a contract automatically renew that you wanted an opportunity to re-sell? A business case for a solution could be built on better renewal management alone.
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    • 1. B S Accelerating Sales Through Better Contracting Thermo Fisher IACCM Ariba© 2012 Ariba, Inc. All rights reserved.
    • 2. Abstract Accelerating Sales Through Better Contracting Youre charged with bringing in more revenue, so youre working hard to make your sales team faster and more efficient. But you keep hitting a wall when it comes to finalizing your sales agreement. Contracting can be a slow, frustrating process that can delay or even risk deal closure. Join this session to hear about what best-in-class companies are doing to accelerate revenues through faster contracting cycle times.2 © 2012 Ariba, Inc. All rights reserved.
    • 3. Our Speakers Lori Lichtenwalter Tim Cummins Dan Ashton Contract Manager CEO Sr. Mgr. Solutions Marketing ThermoFisher International Fisher Clinical Services Association for Ariba Contract & Commercial Management3 © 2012 Ariba, Inc. All rights reserved.
    • 4. B S Accelerating Sales Through Better Contracting Lori Lichtenwalter Thermo Fisher Scientific Inc. BioPharma Services Division Contract Manager – North America© 2012 Ariba, Inc. All rights reserved.
    • 5. About Thermo Fisher Scientific • Thermo Fisher Scientific is the world leader in serving science. The company enables its customers to make the world healthier, cleaner and safer by providing analytical instruments, equipment, reagents and consumables, software and services for research, analysis, discovery and diagnostics. With annual sales of $12 billion, Thermo Fisher Scientific has over 39,000 employees and serves more than 350,000 customers in pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental, industrial quality and process control settings. • The focus of the BioPharma Services Division includes clinical trial supply services and supply chain management, biological storage and logistics, bio-analytical chemistry testing, commercial biopharmaceutical product sample management, and pharmaceutical logistics.5 © 2012 Ariba, Inc. All rights reserved.
    • 6. History - The Pain • Global • Multiple Templates • Multiple Processes • Agreement Location Knowledge Accessibility6 © 2012 Ariba, Inc. All rights reserved.
    • 7. Ariba Solutions Deployed • Ariba Contract ManagementTM Professional Contract Creation and Repository Contract Process Management – Version Control – Negotiation – Approvals Contract Authoring Contract Analysis and Reporting7 © 2012 Ariba, Inc. All rights reserved.
    • 8. Implementation/Go Live • Implementation Commencement March 2011 • Go Live November 7, 2011 (4 + 1 NA site) December 5, 2011 (Switzerland) March 5, 2012 (1 Additional NA Site) Others TBD (2 Additional main sites + 14 other sites)8 © 2012 Ariba, Inc. All rights reserved.
    • 9. Flow Process Development • Map Process To Do/Reviews/Approvals • Condense into buckets • Example: Contract Creation Negotiation/Approvals Finalization/Signature Contract Completion9 © 2012 Ariba, Inc. All rights reserved.
    • 10. Flow Process Development - Lifecycle Requestor Submits Contract Request Repository / Contract Monitoring Professional Approves Request Contract Workspace Finalization Created – Approved Template Provided Required Reviews Negotiation / Approvals10 © 2012 Ariba, Inc. All rights reserved.
    • 11. Solutions/Process, Part I • Contract Request Creation Date Contract Needed by Date Project Start Date Client Information (name, address) Ability to Upload Third-Party (Client) Template Ability to provide important information relative to the project Contract Professional – Approve/Deny Request Additional Information (Project Details; Approx Quote Value)11 © 2012 Ariba, Inc. All rights reserved.
    • 12. Solutions/Process, Part II • Contract Workspace Generates Template – Based on Internal Entity and Questions/Answers Third-party (Client) Templates – Ability to review and maintain tracking and approvals Negotiation – Send Template for Negotiation – Unload Counter-proposal – automatic redlines – Reviews/Approvals (Several ways to obtain approvals) » Flow Process Defined (―Required‖) and Ad Hoc Completion of Contract – Sign; Repository – Notifications Complete – Monitoring12 © 2012 Ariba, Inc. All rights reserved.
    • 13. Global Process • Templates Certain provisions modified based on global site chosen – Governing Law – Country requirements • Process Flow Same – different reviewers/approvers Certain • Access Control13 © 2012 Ariba, Inc. All rights reserved.
    • 14. Benefits/Results, Part I • Increase contracting productivity and ―ease of doing business‖ Correct templates utilized Correct information No duplication • Leverage favorable client terms and conditions Avoid ―work-arounds‖ Non-standard terms accessibility • Accurately track contractual obligations and milestones Custom Headers Due Dates Contract Values • Reduce contract cycle time (from development through execution) Contract Requests Approvals within system14 © 2012 Ariba, Inc. All rights reserved.
    • 15. Benefits/Results, Part II • Standardize ―best practice‖ contracting process across the BSD business units (globally) Same Process Flow and Approval process utilized Traceability and accountability • Improve compliance, driving increased profitability and reduced risk Approved Templates Quick accessibility Determine status of Contracts • Gain visibility into client contract risks and opportunities through a single repository All Contracts within Division (Global) • Search Capabilities Search boilerplate terms (e.g. creation date; expiration date; project owner) • Robust reporting capabilities Keep up to date on Expiring Contracts Track Requests15 © 2012 Ariba, Inc. All rights reserved.
    • 16. Benefits/Results - In Sum • Drives Compliance • Quicker Turnarounds • Faster Contract Finalizations16 © 2012 Ariba, Inc. All rights reserved.
    • 17. Statistics – As of November 7, 2011 (By Number) • Contract Requests – 72 Confidentiality and Master Agreements [Note – Do not need a Request to have an Agreement] • Current Negotiations – 79 (50*) • Current Negotiations (Amendments) – 29 (26*) • Finalized (Effective date Nov 7 – May 7) – 61 • Approval time shortened17 © 2012 Ariba, Inc. All rights reserved.
    • 18. Lessons Learned, Part I • Data Collection • Mapping the Process (Internally) • Language (Ariba / Fisher Terminology) • Robust System - System Limitations • Microsoft Word Compatibility • Global acceptability (adoption)18 © 2012 Ariba, Inc. All rights reserved.
    • 19. Lessons Learned, Part II • Simplicity Is Best • Know Your Process • Know Desired Output • Flexibility • Locate Documents – PDF/OCR • TEST, TEST, TEST19 © 2012 Ariba, Inc. All rights reserved.
    • 20. AcceleratingB S Sales Through Better Contracting From reactive to proactive capability Tim Cummins CEO, IACCM
    • 21. Contracting Capability Is a Sourceof Competitive Advantage• Contracts are core business assets. The faster we win them and the better we perform against them, the greater the value of our business.
    • 22. Competition Speed of change Regulation Shifting supply Complexity baseTechnology Financial Increased pressures Globalisation scrutiny
    • 23. Focus on Supporting the StrategicNeeds of the Business
    • 24. Become ‘Supplier of Choice’ throughSuperior Performance 0% 50% 100%
    • 25. Create a Framework for Success Indicator Time Cost DefectsMutual objectives 8 7 4Gain and pain sharing 2 9 8Trust 10 6 2No-blame culture 4 3 6Joint working 1 10 3Communication 9 1 5Problem-solving 6 5 1Risk allocation 3 2 7Performance measurement 7 4 9Continuous improvement 4 8 10Source: Int’l Journal of Project Management, Issue 30, Vol. 2, 2012
    • 26. Accelerate Decision-Making Risk index exists for each contract type: Working Penalties Liability Scope General Capital Content and weightings based on previous margin impact in legacy contracts. CONTRACT TERMS RISK INDEX Working Capital Penalties Liability Scope General TOTAL [XX]% [XX]% [XX]% [XX]% [XX]% [XX]%
    • 27. Proactive Commercial Management Contract Risk Index - Product/Service Areas• In-depth knowledge of risk 70% within/across categories 60% 50% 40% Product/Service Area A• Defines future negotiation 30% Product/Service Area B strategies 20% 10% 0% Scope Working Capital Penalties Liability General• Defines post-sales Customer Contract A mitigation strategies 100% 80% Initial Customer Requirement• 60% Provides a dynamic view 40% Negotiated Position of customer’s changing 20% requirements 0% Scope Working Penalties Liability General Capital
    • 28. Drive Improvements through Benchmarking Sales and Customer Owned Support Team Owned Sales and Customer Owned *will involve Support Team and/or Avg Customer Contract Cycle Time* = 30 calendar days Legal if rework is requested July, 2011 – December, 2011 Generate InitialAFTER Draft Document Internal Approval Negotiation and Draft Signature Understand Customer Rework Needs/ Develop Deal 41% 13% 36% 4% 6% Avg Customer Contract Cycle Time* = 41 calendar days January, 2010 – June, 2011BEFORE Generate Initial Draft Document Internal Approval Understand Customer Needs/ Develop Deal Signature Negotiation and Draft Rework 25% 6% 56% 5% 8% 0% 100% 50%
    • 29. What is the average cycle time from the initiation of the bid to contractsignature for each contract type (in weeks) Domestic contracts? Sell Side Buy Side Low complexity 0-25% 4 or less 4 or less 25-50% 4 or less 4 or less 50-75% 5 5 75-100% 8 8 Medium Complexity 0-25% 5 5 25-50% 8 7 50-75% 9 11 75-100% 19 16 High Complexity 0-25% 10 8 25-50% 17 15 50-75% 21+ 19 75-100% 21+ 21+
    • 30. What are the major improvement initiatives that are being observed or considered in your organization? (Sell side) Adoption of Contract Management… 64% Development of term and contract… 45% Skills development, certification 34% Increassed role in risk management /… 32% Role to be expanded 30% Knowledge management systems 25% Relationship segmentation, strategy 16% Revised measurement systems 16%Growing awareness and use of external… 15% Organizational change 14% 0% 10% 20% 30% 40% 50% 60% 70%
    • 31. B S Accelerating Sales Through Better Contracting Dan Ashton Ariba© 2012 Ariba, Inc. All rights reserved.
    • 32. 33
    • 33. Companies Integrating CRM and Contracts Drive Greater Value Average Percentage Improvement – Companies Assessing Capabilities as ‘Good’ to ‘Excellent’ moving to an Integrated Contract Management Solution Source: IACCM, Selling Power, “State of Sales Contracting”, 201134 © 2012 Ariba, Inc. All rights reserved.
    • 34. What if you could? • Make contracting easier • Allow reps to request contracts from CRM opportunities? • Collaborate better? • Be mobile?35 © 2012 Ariba, Inc. All rights reserved.
    • 35. 36 © 2012 Ariba, Inc. All rights reserved.
    • 36. Contract Creation37 © 2012 Ariba, Inc. All rights reserved.
    • 37. Dashboard38 © 2012 Ariba, Inc. All rights reserved.
    • 38. Reporting39 © 2012 Ariba, Inc. All rights reserved.
    • 39. Share This Session…NOW…from your mobile! • All presentations are posted: Guidebook mobile app – Search Apple or Android app store for Guidebook – Enter code ―collabor8‖ Or at Slideshare.net/Ariba • Share via email or social media **Come back soon – we are syncing #AribaLIVE audio and video interviews to the presentations**40 © 2012 Ariba, Inc. All rights reserved.
    • 40. Speed and Collaboration Benefits Improve Sales Contracting Function Challenges Solutions Results • Required to generate large • Selection criteria included • Drastically reduced time spent Company volume of contracts on a ability to integrate well with on reporting—able to generate LiveVox weekly basis Salesforce.com, company reports in minutes that • Challenge of keeping up with reputation, and pricing previously required 30-45 Profile contract demands on a timely • Implemented Ariba Contracts minutes The leading provider of cloud contact center solutions, basis, due to number of sales on Force.com • Reports are significantly more reps accurate and reliable than prior Ariba Solutions manual process; Ariba Contracts on Force.com • Limited reporting capabilities; managed manually • Established easily populated • Challenge of tracking and templates in the organizing pre-contract Contract Workspace conversations • All-in-one Contract Workspace and executive approvals provides repository for all relevant documents, approvals, contract attributes; ensures peace of mind “We were immediately impressed with Ariba and continue to • Enhanced collaboration across be today. Ariba Contracts on Force.com is built natively on the Legal team Salesforce.com which was critical for LiveVox. The Ariba “With Ariba Contracts on Force.com, I can go into the team has been very responsive to what we are looking for reporting function and in a matter of minutes generate the and works on formulating a solution that fits our needs.” same amount of information that would have taken 30 to 45 Mark Mallah, Corporate Counsel, LiveVox minutes—at a minimum—before.” Mark Mallah, Corporate Counsel, LiveVox41 © 2012 Ariba, Inc. All rights reserved.

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