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.
AcceleratingB S Sales Through Better Contracting From reactive to proactive capability Tim Cummins CEO, IACCM
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.
Focus on Supporting the StrategicNeeds of the Business
Become ‘Supplier of Choice’ throughSuperior Performance 0% 50% 100%
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
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]%
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
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%
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+
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%