Means to Simplifying Contract Negotiations
- A Practitioner’s View
John Fenton
Attorney and Senior Contract Manager
Sourcing Group, Cincinnati Bell
Cincinnati Bell
Founded in 1873
Publicly traded on NYSE (CBB)
$1.5 Billion in Revenue (2012)
Traditional landline telephon...
Agenda

2010 status quo ante
Contracting challenges
How to address challenges
State of work in progress
2010 State of Affairs

 Homegrown static contract database
► Equivalent to an Excel spreadsheet
► Store, search, and retr...
2010 State of Affairs

 Almost no templates
► A poorly accepted NDA
► A general non-professional (usually real estate) se...
2010 State of Affairs

 Manually match requisitions and purchase
orders to contracts
►Poor Compliance

 Multiple entitie...
Contracting Challenges

Visibility

Compliance

Challenges

Standardization

Cycle Time
Visibility
Challenge 1

Renewals
• Auto renewals
a key issue

Key Contract
Terms
• Termination for
convenience,
payment te...
Visibility
How to achieve it
Implement a central
repository to store
and manage your
contract information

Identify key te...
Compliance
Challenge 2

Contract
execution

Purchase price
compliance

• How do make
sure that we get
fully executed
contr...
Compliance
How to achieve it

Match established contracts
with actual spend
transactions to identify non
approved vendors....
Standardization
Challenge 3

Different categories need
different templates

Most of spend is services
and we don’t have
st...
Standardization
How to achieve it
Standardize your terms
and clauses by working
with different
stakeholders.

Present your...
Cycle Time
Challenge 4

Approvals
take too
long

Redline and
negotiation
is a tedious
process.

I don’t know
the
approval
...
Cycle Time
How to achieve it

Automate the approval
process though a CLM tool
• Predefined approval
hierarchy based on
cat...
Questions?
john.fenton@cinbell.com
Horizon 2013 Means to simplifying Contract Negotiations – A practitioner's view
Horizon 2013 Means to simplifying Contract Negotiations – A practitioner's view
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Horizon 2013 Means to simplifying Contract Negotiations – A practitioner's view

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"As organizations seek to drive greater efficiency and value from their trading relationships, the approach to negotiation is coming under scrutiny. Streamlining and optimizing negotiations continue to be an area generating significant return. In this session, John Fenton, Attorney and Contract Manager Purchasing & Supply Chain Management group at Cincinnati Bell has shared insights into;
• An increasing focus on industry and commercial standards.
• Strategies for reducing low value negotiations and reducing cycle time
• An increased use of technology in the negotiations process
"

Published in: Technology, Business
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  • 1878, acquired exclusive license to Bell telephone service within 25 miles of Cincinnati.1931, opened Cincinnati and Suburban Telephone Company Building with 88 operator straight switchboard, longest in world.2007, purchased City of Lebanon, Ohio cable company.Still effectively owns 69% of CyrusOne.
  • Have vendor sign contract first.Use e-signature.
  • Horizon 2013 Means to simplifying Contract Negotiations – A practitioner's view

    1. 1. Means to Simplifying Contract Negotiations - A Practitioner’s View
    2. 2. John Fenton Attorney and Senior Contract Manager Sourcing Group, Cincinnati Bell
    3. 3. Cincinnati Bell Founded in 1873 Publicly traded on NYSE (CBB) $1.5 Billion in Revenue (2012) Traditional landline telephone business (ILEC, CLEC, long distance, business services) Regional wireless carrier (GSM, 3G, 4G HSPA+, but no LTE) (owns spectrum) Internet Service Provider (Via DSL over copper and via Fiber) Multichannel Video Program Distributor (small traditional cable plant, IPTV via Fiber and via DSL) Completed IPO of CyrusOne datacenter business in January 2013
    4. 4. Agenda 2010 status quo ante Contracting challenges How to address challenges State of work in progress
    5. 5. 2010 State of Affairs  Homegrown static contract database ► Equivalent to an Excel spreadsheet ► Store, search, and retrieve ► No alerts ► Limited, legacy metadata fields ►Poor Visibility ►Poor Compliance
    6. 6. 2010 State of Affairs  Almost no templates ► A poorly accepted NDA ► A general non-professional (usually real estate) services MSA ► An imposing outside-counsel generated 100+-page construction contract ► Overreliance on supplier contract forms ►No Standardized Terms ►Poor Compliance ►Slow Cycle Time
    7. 7. 2010 State of Affairs  Manually match requisitions and purchase orders to contracts ►Poor Compliance  Multiple entities and multiple accounting systems make determining spend by supplier a manual process ►Poor Compliance
    8. 8. Contracting Challenges Visibility Compliance Challenges Standardization Cycle Time
    9. 9. Visibility Challenge 1 Renewals • Auto renewals a key issue Key Contract Terms • Termination for convenience, payment terms, risk mitigation Contract Ownership • Who is the Sourcing manager? • Who is the contract owner? Contract Hierarchies • SOW’s, Prime and Sub Agreements, Amendments
    10. 10. Visibility How to achieve it Implement a central repository to store and manage your contract information Identify key terms which need to be tracked for key contracts Reports to provide trend analysis Ensure all evergreen contracts are reviewed with business owners and identify opportunities for renegotiation Auto renewal reports and contract expiration alerts to prepare for sourcing projects
    11. 11. Compliance Challenge 2 Contract execution Purchase price compliance • How do make sure that we get fully executed contracts back? • How do we know they are what we negotiated? • How to we ensure that we get the pricing we negotiated for? Control Maverick Spend • How do we ensure that people buy from these contracts? Visibility of existing contracts • How do we ensure that people are aware of existing contracts for products and services?
    12. 12. Compliance How to achieve it Match established contracts with actual spend transactions to identify non approved vendors. Ensure that you track utilization of the contract. Increased visibility of contracts with integration with your ERP system • PO should refer to a contract to get pricing Match purchase information with contract to identify purchase price compliance as well as rebates.
    13. 13. Standardization Challenge 3 Different categories need different templates Most of spend is services and we don’t have standard templates • Supplies, Widgets, Network equipment • Professional Services • Software Development and Licensing • Video Programming • Professional Service Agreements • Software Development and Licensing Agreements • Affiliation Agreements (Video programming) We are global (or We are too small) so can’t standardize our templates • Multi-lingual, multilegal support • Present your template first
    14. 14. Standardization How to achieve it Standardize your terms and clauses by working with different stakeholders. Present your template first. Leverage important clauses from templates. Implement a process which automatically guides sourcing managers to the right template. Identify services which are bought repeatedly and define your own templates based on third party boilerplate. Track what terms are often negotiated and change those terms in the base templates. Define a clause hierarchy based on the different region requirements.
    15. 15. Cycle Time Challenge 4 Approvals take too long Redline and negotiation is a tedious process. I don’t know the approval hierarchy Signatures and scanning executed documents takes too long
    16. 16. Cycle Time How to achieve it Automate the approval process though a CLM tool • Predefined approval hierarchy based on category, spend, etc. Use e-signature to automate the signature process. Implement clause-level approvals • Don’t send entire contract for review , define clause ownership and automate this process. Track the efficiency of contracting process and make adjustments.
    17. 17. Questions? john.fenton@cinbell.com

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