Turn Your Sell-Side CLM or Buy-Side CLM into Enterprise Contract Management
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Your vision for enterprise-wide contract management is a single technology and process for all kinds of contracts. However, if you are like many companies, today your contract software is only used for some of your contracts. This session shares stories and best practices for deploying contract management to accommodate all contracts.
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Turn Your Sell-Side CLM or Buy-Side CLM into Enterprise Contract Management
- 1. © 2018 Apttus Corporation #AccelerateMO Robert Xu Robert Couch Charmel Rhyne May 16, 2018 Turn Your Sell-Side CLM or Buy-Side CLM into Enterprise Contract Management
- 2. © 2018 Apttus Corporation Robert Xu Enterprise Application Solution Manager Robert Couch VP, Contract Management Advisory Services Charmel Rhyne Senior Principal Sales Engineer
- 3. © 2018 Apttus Corporation 6 Employees $12,000 Funding 1 Product 1 Workshop Varian: In the Beginning
- 4. © 2018 Apttus Corporation 3,000,000 Patients Served Annually ~7,000 employees Varian Today
- 5. © 2018 Apttus Corporation Results • Automated processes • Enhanced advantage in negotiations • Reduced admin overhead • Better managed security and risks Execution ECM to integrate procurement from request, RFx to contract execution with one consolidated process worldwide. Objectives Varian needed to consolidate disparate procurement processes across the world to achieve cost savings.
- 6. © 2018 Apttus Corporation We Saw Challenges Across the Company Compliance Lack of clarity on contract ownership Lack of central repository Finance Lack a single view of obligations Too hard to track payment obligations Sales Too much time spent in contract discussions Negotiating from scratch without factoring in history and consistency Legal No control over agreements Contract negotiation slow and frustrating Lack of visibility into active contracts Risk Lost $$$
- 7. © 2018 Apttus Corporation Our Tipping Point
- 8. © 2018 Apttus Corporation Developing Our Minimum Viable Product
- 9. © 2018 Apttus Corporation Benefits from Enterprise Contract Management AGREEMENT TYPES Customer Master Ag., MSA, BAA, NDA, Licensing, Reseller/Distributor Ag., Security, PSA- HCP, Joint Development, Research, Consulting 30 BUSINESS AREAS Streamline business processes around Sales, Strategy Alliance, Legal, Engineering, Product Management, Marketing, Finance, Procurement and Supply Chain 8 ENTERPRISE SOLUTION Creates consistency in the customers’ eyes 1
- 10. © 2018 Apttus Corporation Lessons Learned User Friendly • SSO • DocuSign/SAP integration • Less training, more awareness Contract Portal • Provide mass access without increasing license cost • Seamless integration with SFDC-Apttus Data Cleaning • Prep work starts earlier • Data quality matters
- 11. © 2018 Apttus Corporation Success Is the Key to CLM Expansion Use Your Success to Expand Your Use Identify Success Measure Success Achieve Success Celebrate Success © 2018 Apttus Corporation
- 12. © 2018 Apttus Corporation Contract Management is at the Center of Your Business Buy-Side and Sell-Side Processes Are Built Around Contracts ENTERPRISE CONTRACT MANAGEMENT RevenueContractQuoteOpportunity ERP PaySourceSupplier ERPContract
- 13. © 2018 Apttus Corporation© 2018 Apttus Corporation You Can Do It A Real Apttus Customer Example • Started with 3 sell-side agreements • Celebrated success • Apttus went viral: Team members began to exchange stories • Other teams wanted to join in • Expanded into buy-side agreements and leases • Today they use Apttus across their entire enterprise for any contract that is requested!
Editor's Notes
- Good afternoon, everyone. I am Robert Xu, application manager from Varian. Recently we implemented Apttus ECM and have some stories to share. Before we directly dive in, I would like to start with a story about Varian.
- This year happen to be Varian’s 70th birthday. 70 years ago, Varian brothers, Russell & Sigurd started this company with 6 employee and $12,000 dollars funding. They started off from a small warehouse down in San Carlos- 30 minute drive from San Francisco. At that time, Varian had only one product- Klystron - a specialized linear-beam vacuum tube . (evacuated electron tube) developed by Sigurd and Russell Varian while at Stanford University. *note: One side story here - one earlier employee is bookkeeper Clara Jobs – mother of Steve jobs . Marvin Chodorow, Dorothy Varian, Richard Leonard, Esther Salisbury, Edward Ginzton, Fred Salisbury, Don Snow, and Myrl Stearns
- Today 70 years later, Varian has became a world leader to provide oncology solutions with 7000-employee, 3 billion-dollar revenue . Every year around 3 million patients are being served by different Varian solutions, including – Radiotherapy, radiosurgery, Medical Oncology, Proton Therapy, etc. This transformation does not take place over night. Instead, it rooted itself from the incremental innovation people bring in on daily basis. Just like Varian’s brother did 70 years ago, today we embarked the journey of Enterprise contract mgmt. (ECM)– starting from the simple but powerful seed to think how can we do better with contracts, how to serve customer better, how to make operation more efficient. Through this historic lens of Varian own growth path, we are cautious and optimistic about the difference ECM will make for Varian, as a matter of fact, it has.
- Back to February 2017, Varian had a spin-off: The X-Ray business unit became another public company called Varex. As the result of spin off, Varian faced a challenge to reduce $50M SG&A cost. One of the options lies in “Indirect Procurement”. Different divisions and different international subsidiary runs their own indirect procurement operations, different processes, buying opportunities were not consolidated and not leveraged to advance negotiation position. The procurement cost was not well monitored. These separated processes need to be consolidated into one integrated system. We started ECM implementation for Indirect procurement in October 2017 and completed in March 2018. Today, we are migrating these segregated processes into one central platform. Worldwide employees are able to submit the indirect procurement requests and check the status from the portal; Indirect procurement team can manage the workflow of RFP/RFI, gain the total visibility of the vendors, consolidate the buying opportunities to achieve the cost saving. Now we are well on track to deliver the cost saving required by the last year spin off. Q- Glad to see that applying ECM into the procurement area, does Varian have the plan to extend ECM to other areas? A- Good question. this actually tees up nicely for the opportunities beyond procurement.
- Besides procurement, we do look into other areas across our company. For Legal, we saw the frustration due to the lack of control over the clauses; the negotiating can be slow and frustrating; For sales, many painful time consuming steps , lot of overhead in Sales operation; moreover, the lack of consistency did not serve our customer well. For our finance operation, people have difficulties to track the contractual obligations and impact the payments to the vendors. On the front of compliance, as a medical company, we are under FDA regulation. The lack of central contract repository created many hurtles and unnecessary manual works in the audit and compliance area. Healthcare provider compliance would be a good example. The pain is REAL. In nutshell, these disconnection, the manual work, the lack of visibility did not serve us well. They impacts our ability to deliver the medical solution to the physicians and patients. Q: As you have been moving forward with these other groups, how has your approach for deploying ECM changed? A- we have two scenarios. The first one we call it “vertical” where there is a single agreement type and single business process owner. NDA would be a good example. In Varian, Legal operation owns NDA provisioning process. Legal Ops is able to define the new process, the metadata and workflow from design aspect. The implementation would be straightforward. The change management is relatively light. The second scenario we call “ Horizontal” where there are multiple agreement types and cross multiple business function owners, For example Sales contracts would fall into this use case. Sales contracts is a portfolio of different agreement types including the standard T&C, negotiated T&C, Customer master agreement, different product schedules, etc. Its lifecycle involves pricing, biding, negotiation, accounting, service. obligation delivery teams. The design is heavy on the business process re-engineering and change mgmt. In the beginning of May, we’ve just done a “design session” with our global commercial operation team to map out the to-be processes. – not a trivial task. To address complexity, we use the two models to align all parties’ expectations.
- The first tool is the ‘tipping point” which is not new, but powerful concept. It provides the “right expectation” guideline for the duration of the deployment - bigger efforts and small result in the first half and vice versa in the second half ”. The first half is a uphill battle , painful hard work, the peak is deceivingly remote. At this phase, persistence, focusing on the end goals, keeping team motivated will carry us far. In the case of ECM, the tipping point would be the first use case where people started getting value from ECM. Once pass the tipping point, it would be much easier and happier path moving forward. Even you might hit some speed bump, but the momentum and confidence built from the earlier success will push forward.
- The second framework we would like to follow is the MVP approach – the minimal viable product – starting with skating board, scooter, bicycle, motorcycle and car…. User can get something to play in their hands at earlier stage, instead of waiting for a Long long time to get a car. One stone two birds here: One is the learning opportunity for business user to get their hands wet with the new system . In fact, once they know how the “scooter” works, they would provide better advice on how to build a bicycle next. With better informed users, you get better performed system. Secondly, it provides some value as earlier as possible. It will not be perfect in day 1, but value is here. This very earlier-delivered value can keep people engaged and motivated for the next better release.
- With these framework in mind, we are taking the initiatives to examines around 30 agreement types including MSA, BAA, Development, research agreements. Sales Terms and conditions, etc. These agreement are across 8 different business areas from marketing, sales, legal to finance, quality. The vision is to bring them into one platform, integrating the upstream and downstream processes; set up the single source of truth, provide the reporting and visibility. All Varian folks are excited about this.
- Introducing changes is a pain itself. ECM is no exception. This reminded me what Karate coach told me son about good pain and bad pain. Good pain makes you stronger and bad pain makes you weaker. Deploying ECM is a good pain for the organization. While how to it less painful , even a bit happier path for the folks? “User Friendly design” is the one of these keys. It requires the up front investments in the design and development, but it will pay back nicely later on – saving big on later on training cost and time. people knows how to google naturally. We hope people will pick up how to use ECM naturally too. In our case, we enabled OKTA SSO and DocuSign integration. So people can log in without additional password and complete eSign without jumping over to another hoop. Happy users, productive employees. The second lesson learnt I would like to share is the data cleansing. Apttus provides the powerful dynamic reporting. While it needs to be built upon the solid ground, not loose sand. The clean data is such solid foundation. Without the clean data, people will not have the confidence on the report, that will compromise the value of ECM in a big way. Data matters here. However, data cleansing is not trivial task and will require the effort, the big efforts. As a rule of thumb – 3 times more efforts than to build the system alone. The good news is that business can take this on in parallel, even earlier while the solution build is going on. Thirdly, I am the big believer of platform. More people access to it, more value it provides. AIC portal is such the platform . We like it for a couple of reasons: 1) license is based on usage and no named user license is applied here. A big cost saving for us. 2) the portal provides the “consumers” of the contracts an easy way to request for it and check the status. And no training is required. People love it. If AIC portal is not in your radar yet, maybe it is the time to check it out now . In a nutshell, user friendly design, data cleansing and leverage AIC portal could put the ECM deployment on the fast track. I hope you all will find them handy as I did. Thank you!
- Identify Success – as part of any deployment or expansion is the need for Executive sponsorship for top down driven priorities, Governance Council for ensuring support from functional and business stakeholders, and Stakeholder Ownership, the persona champions for all respective aspects of the contract lifecycle being addressed and - Company Goals/Objectives – top down expectations for success, justification for the cost - Stakeholder Issue/Challenges - Don’t Boil the Ocean – Focus on a Business Unit or a Contract Type – high volume contract types or business unit with most pain, adaptable to change – where it is you have the best chance of visible success. Measure Success – as proof of value Success Indicators will need to be established to gauge your success – It’s not enough just to have Company Goals/Objectives and/or Stakeholder Issue/Challenges – process owners expectations of success – those emotionally connected – and Business Metrics – objective indicators of success, something which can be measured CLM Goals/Objectives/Issues/Challenges to CLM Feature Sets Business Metrics to Goals/Objectives/Issues/Challenges and Feature Sets CLMS implementation plan through Metrics and Maturity Achieving Success – due diligence pays off, end-user training, usability reviews, documented gap protocols, Celebrate Success – hard work pays off, spread the word, entice others to want it
- This illustration shows how contracts fit into your business process, at a high level, for both buying and selling. As you can see, when selling, you have an opportunity come in, you then must quote the customer, contract with the customer, collect revenue & manage the accounting in ERP. When buying, you must engage the supplier, source, contract, pay the invoice, and manage the accounting in ERP. These processes meet at the center in contract management. So you should take away a few things from this. Even if you are planning to automate only sell-side or buy-side contracts today, you should consider your process in terms of the entire enterprise, and make sure you can accommodate both types of contracts later. Apttus provides a single repository for all kinds of contracts. You should consider your business processes extending out from the contact. So you will want to have a contracts solution, ideally, that is built on a common platform with sell-side and buy-side solutions for the broader business processes. Apttus does this too, offering complete quote-to-cash and supplier relationship management product suites that connect to CRM and ERP platforms. (Since your interest today is in contracts we don’t need to discuss these related product suites any further—however you should consider the importance of having them available if and when you need them later. This is one of the key advantages of working with Apttus.)
- If this is your journey then you are not alone. Others have gone before you with great success. Start slow, get momentum, get key people to tell the success story; Think of the old Faberge commercial with Heather Locklear – I used it, then I told 2 friends then they told 2 friends and so on!