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Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
Building A CFO Ready Business Case For Contract Management
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Building A CFO Ready Business Case For Contract Management

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  • They approved the message – might need to pull logo
    They aren’t presenting with us but put on inside
  • How are you managing your contracts?

    All organizations currently manage their contracts in some fashion. But for many it’s a haphazard process. That this mix of manual and automated systems is almost always DISCONNECTED … It’s not uncommon to find individual business units or departments responsible for creating or executing a contract to be doing so manually, often with home-grown processes that have evolved as much by accident as by intent.

    Much of the time there are no procedures for central oversight of the process, no corporate standards, and few enforcement mechanisms. Even where effort has been made to put systematic processes in place, they often don’t get followed, let alone protect the company from the risk associated the agreements made in those contracts. With little visibility into the management process, it’s hard to determine accountability when something, heaven forbid, should go off-track.



  • When talk to customers about we find most organizations are still grappling with the basic problem – “where is that contract?”
    Even when enterprise content management has been successfully implemented in other areas of the organization, most are still not managing contracts within a controlled repository – they are still using file shares and hard drives and have paper-based agreements in the mix that are not stored in a cohesive, electronic manner – and then somewhat manual methods to keep track of it all
    Or we find that point solutions are being used to manage some contracts at a departmental level within the organization, but there is still a general lack of centralized consistency and control throughout the organization.
    This is still the challenge we continue to hear about most often – the need to improve how contract knowledge is stored and make it easily accessible to those who need it - when they need it.
  • The next challenge relates to the need to improve control of the processes related to creation, approval and execution of the contracts.
    Most of the time our audience are looking to solve the problems associated with lack of centralized procedures and oversight of the complete process, no corporate standards, and few enforcement mechanisms. The financial risks of litigation and non-compliance due to lack of control is driving the market to find new and better ways to manage in this area.
  • There has been a large uptick in executive level interest over the past 18 months related to effective post-award contract and relationship management. This exposes the need for better performance management and metrics that offer greater insights and understanding of the contractual relationships and associated processes.

    Because of this many organizations are looking for new ways to extend effective contract management principles, processes and shared knowledge across a broader audience within the organization – extending the reach of a contract management system to all business users who play an active role in the longer term customer, supplier, partner & employee relationships.
  • Contract Management is an enterprise-wide issue with benefits to be had across the organization—if it’s handled in a strategic manner.
    Our goal is to provide access to the knowledge that is contained in contracts and then ensure that the knowledge is incorporated into the distinct processes related to those contracts, to build the best possible value for our customers.

    The Open Text Value Engineering Team has developed a set of assessment tools that provide an overview of the challenges you face, the formulas for determining cost, and the projected benefits that your organization can expect when committing to taking a best practices approach to contract management at your organization.

    To schedule a consultation with our Value Engineering consultants, contact your account representative or email us at value@opentext.com. For more information on Open Text Contract Management visit www.opentext.com/contractmanagement.

  • Open Text Contract Management enables you to centralize, organize and prioritize all contract activities guiding processes from draft creation, through negotiation and approval stages to execution of the negotiated obligations culminating in renewal or termination, retention and ultimately disposition of the contract and associated content.

    Contract Management provides an enterprise-wide solution—handling all contract types on a single platform. Managing the contract lifecycle provides tremendous opportunity to save money, increase revenue and decrease risk to the organization.

    Our solution dramatically increases the transparency of your contracts. Stakeholders will be able to view and share real-time information about contracts from a singular, centralized location. You will be able to monitor the efficiency of your contract tasks and refine processes accordingly for continuous improvement. And you will be able to search, audit, and report on all contracts, including monitoring terms, conditions, expiry, renewals, vendors, and more.

    Improved control will enable you to better drive internal, regulatory, and supplier compliance. Streamline your contract processes that used to be ad hoc by establishing and enforcing standard policies, procedures, language and terms. A standard approach mitigates the risk of renegade contracts and leads to fewer errors, faster negotiation, shortened time to closure, and improved net revenues from business transactions.
  • Working together with the IACCM, we have identified 4 keys to ensuring the success of your contract management projects.
  • Making impactful change requires much more than approval of a contract management project and requires much more than throwing technology at the problem. In many situations it actually requires a significant shift in business culture. And that cultural shift will effect how many people get their work done on a day to day basis.

    Making the commitment to adopting a best practices approach to Contract Mgmt is no small thing… it takes effort & alignment across the organization. And continuing to fine-tune those efforts is an ongoing process

    But with some well planned discussions and investigations upfront not only will you better pinpoint where your most significant pains are today, you will also learn which of these problems pose the biggest return if they can be resolved. And based on our experience – focusing on solving the problems that cause the biggest perceived pains does not necessarily equate to the biggest return.

    Having a greater understanding of the potential impact of change will not only help build the business case to get your project approved, it will also help pave the way to gain buy-in from stakeholders across the organization, it will help you to identify implementation priorities and set the stage for the required change management activities and will help pinpoint, from the beginning, the benchmarks that will determine how project success should be measured.
  • The problem for professional managers and their supervisors is not that they don’t know there’s a problem with the way assets are being managed and distributed, it’s that they don’t fully understand the organizational impacts and so can’t communicate enough value to implement process change. What this presentation attempts to show is that the pain can be articulated, and just as importantly, that the benefits of process change can be demonstrated in a way that will gain CFO buy-in and get your project off the ground.
  • Contract Management is already being done at your organization. And contract management costs money every day. So how well are you managing contracts? Is the current method of managing contracts good business? How much does it cost? And what’s the point of knowing; it’s just the cost of doing business, isn’t it? But there is a point because by better managing your contracts and contract management costs, you can have a huge impact on the company’s bottom line.

    Contracts exist everywhere and there are many different types of contracts. All of them need to be processed and this takes time. Time equals money.
  • Also impacted is the cost of goods purchased by the organization, net revenue, infrastructure costs, and strategic factors like the length of the sales cycle and the cost of litigation. The costs for each area can be in the millions of dollars annually and when added together, the costs would make anyone cry.
  • But there is hope. Contract Management methods have been widely studied by various analysts and trade groups and a set of Best Practices has been identified, tested, and the benefits measured. If you could implement these Best Practices, then you would see real benefits in productivity, cost and revenue impacts, and litigation cost avoidance.
  • The Open Text Value Engineering Team has developed a set of assessment tools that provide an overview of the challenges you face, the formulas for determining cost, and the projected benefits that your organization can expect when committing to taking a best practices approach to contract management at your organization.

    To schedule a consultation with our Value Engineering consultants, contact your account representative or email us at value@opentext.com. For more information on Open Text Contract Management visit www.opentext.com/contractmanagement.


  • Transcript

    • 1. Michael Serulneck ECM Value Strategist Get The Project Funded! Build a CFO-Ready Business Case for Enterprise Contract Management Rev 2.0 01102010 Copyright © Open Text Corporation. All rights reserved. Alison Clarke Product Marketing Manager November 11, 2010
    • 2. Well managed, are an asset; inefficiently managed – a liability 2
    • 3. A few roadblocks get in the way… How do you navigate these barriers? 3
    • 4. Do you have visibility into your contracts and the associated history? Top Problems of IACCM Members 1. No Searchable Contract Repository 2. Inability to Effectively Manage Milestones 3. Paper Isn’t Captured 4. Ineffective Security & Version Control – 2009 Contract Management Software Market Sentiment Survey 4
    • 5. Do you have adequate control of the creation of new agreements? “Litigation around customer and supplier contracts is the strongest common thread amongst our surveyed organizations” – 2010 AIIM State of the ECM Industry Report when asking about the compliance benefits of ECM & RM 5
    • 6. “Organizations that don’t manage their contracts effectively will be at a tremendous competitive disadvantage” – Tim Cummins, Director IACCM Are you actively managing the commitments your company has made and those made to you? 6
    • 7. For a large organization, best practices contract management can equate to millions of dollars in annual savings
    • 8. With Open Text you can proactively manage all contract types across the enterprise improving control of risks, obligations and benefits associated with every agreement 8
    • 9. 9 Gain control of risks and liabilities; ensure compliance with policies and regulatory guidelines Maximize time for legal focus on high risk, high value agreements
    • 10. Accelerate process-cycle times and reduce operational costs through improved efficiency 10 Enforce use of approved contract language and standardized processes
    • 11. Automate monitoring of contract milestones empowering teams to identify cost savings and revenue generating opportunities 11 Reduce maverick spends Enforce commitments Deliver on promises Proactively manage renewals
    • 12. Keys to a Successful Project  Critical Success Factor #1 – An Executive Sponsor  Critical Success Factor #2 – Gaining Support from other functions and groups  Critical Success Factor #3 – Credible ROI statistics  Critical Success Factor #4 – Project Management 12
    • 13. What’s the Finite Value of Best Practices Contract Management? 13
    • 14. Taking the Business Approach  Quantifiable Value:  Insight into the scope, the potential stakeholders, the hurdles, and the costs of the current business problem  Understanding of potential process changes and their likely benefits  Ability to focus on areas of maximum value  Determine apples-to-apples costs and benefits  Ability to articulate a CFO-ready business case to secure funding  Metrics for measuring investment success 14
    • 15. Everyone Already Does Contract Management Create Review Negotiate Approve Store Track Resolve Report Audit Procurement Sales Finance Legal Services Operations Support Marketing Human Resources Purchases Proposals Real Estate Insurance NDA IP Partner Product Employment … And Processing Contracts Costs Money X X 15
    • 16. Copyright © Open Text Corporation 2008 - 2009. All rights reserved. Slide 16 Revenue and Infrastructure Impacts  Off Contract Spending  Auto-Renewing Contracts Savings Leakage (from negotiated prices, rebates, discounts and penalties) Cost of Goods Lost Revenue Infrastructure Strategic Costs Revenue Leakage (penalties paid, unearned discounts taken, unearned rebates taken, and maverick pricing)  Cost to IT for supporting the current system  Proliferation of Information silos  The Length of the Sales Cycle  The Length of Days Sales Outstanding  Contract Related Risk and the Cost of Litigation 16
    • 17. Copyright © Open Text Corporation 2008 - 2009. All rights reserved. Slide 17 Best Practices (…to name a few)  IACCM  Gartner  Forrester  AMR Research  Accenture  Financial Exec’s International  Aberdeen Group  PWC  Goldman Sachs  Executive Counsel  Provide a central repository for all contracts  Standardize contract types  Enforce approved clauses and language  Simplify and Automate the creation process  Enforce and Automate the review process  Democratize and Control Access  Enable Collaboration  Centralize oversight  Increase Visibility and Measurement  Automate Safeguards and Alerts Organizations that have implemented Best Practices around Contract Management have seen 50% improvements in Key Performance Indicators – Aberdeen Group, Aug 2008 17
    • 18. Copyright © Open Text Corporation 2008 - 2009. All rights reserved. Slide 18 Building the Business Case
    • 19. The Business Case Copyright © Open Text Corporation 2008 - 2009. All rights reserved. Slide 19
    • 20. Discussion Questions  Which part of your organization would benefit most from implementing contract management best practices?  What types of pain do you have around contract management in your organization?  What roadblocks have you encountered?  Do you have centralized policies and procedures in place to control creation/execution of contracts across your organization?  Do you have a project team in place to help implement best practices contract management?  Do you have any tips or suggestions for success based on your own experiences to share with the group?
    • 21. Click to visit the Open Text ECM Suite 2010 Site and discover how to Do More With Your Content.

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