CONTRACT MANAGEMENT PLANNING KIT
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- Noreen Dixon
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1 CONTRACT MANAGEMENT PLANNING KIT KEEPING UP IN A CHANGING ENVIRONMENT In an ever changing regulatory environment, it is imperative to have transparency and visibility built into your contract management process. Pipeline Magazine Across the energy value chain, the oil and gas industry is rife with complicated contracts. In order to remain compliant with policies and reduce wasted productivity, companies can t just manage their projects well; they also need to ensure timely contract execution and be aware of contract expirations and provisions. The typical Fortune 1000 company maintains between 20,000 and 40,000 active contracts, so filing them in a place they can be found again and controlling versions can also be a big factor in the success or failure of strategic operations. COMMON BUSINESS PROBLEMS Below is a list of common business issues related to contracts that we ve solved for clients: 1. Contract execution takes too long 2. Agreements auto renew without appropriate notification 3. Contracts expire without appropriate notification 4. Special contract provisions, and resulting dates surrounding these provisions, aren t tracked 5. Document retention policies are unclear or not being applied at all 6. Document versioning is cumbersome 7. Excel is being used to maintain contract details UTILIZE A PLATFORM YOU PROBABLY ALREADY OWN SharePoint is utilized by 86.3% of large companies, so the chances are good your company already has this platform in place. Why not look into leveraging SharePoint to solve your contract management issues? Not only do features like alerts, versioning, and workflows solve the problems mentioned above, they also connect your department with the company as a whole.
2 The below worksheet will help you get started planning what the ideal contract management system would look like. NOTIFICATIONS During a contract s lifecycle there are usually critical moments where action needs to be taken start dates, end dates, renewals etc. Let s define the critical scenarios where someone needs to be notified to take action. What dates are important for contract milestones, renewals, expiration, disposition etc.? How far in advance do you need to know about the dates above? Are there specific dates that could be used to create alerts for contract administrators, legal, or records management? Where could your organization benefit from automatic reminders? i.e. approval or execution processes Are there deadlines you are trying to meet during the execution process? REPORTING Contract reporting is often overlooked. With tightening regulations and increased focus around contract compliance, improved reporting processes make it easier to react in the event of a breach or audit. What systems/locations do you access to create contract reports? i.e. CRM, SAP, Filing Cabinets 2 of 6 fluent in energy
3 How long does it take to gather information about your contracts or their associated documents? Is there a process for reporting on contract progress? Are there metrics the contract team is being measured by? COLLABORATION Contracts are hard to keep track of even within the contracts department, not to mention the gaps that often appear between those who make the contract and those who implement upon it. Where is the legal verbiage for your contract maintained? How many different types of contracts is your organization creating? Do multiple users create supporting documentation that is maintained as part of the contract record? i.e. insurance, correspondence, MSA Who needs access to contracts, either current or legacy? Do all stakeholders have ready access to contracts? Are your contracts being stored in filing cabinets and/or being 3 of 6 fluent in energy
4 scanned into an electronic records solution? VERSIONING The latest version of your MSA is probably buried: Z:\Corp\Safety\Planing14\Gulf\Safety_Agreement_5_ltB. A system for managing versioning can help even a new user find what they need. Do you know where to get the most up to date contract verbiage? Do you know where to get the most up to date version of a contract being collaborated on? What is the process around change order tracking? How do you know what a contract s status is? BUSINESS PROCESS AUTOMATION We usually find that contract wording can be reused, risk scenarios can be commonly identified and some provisions are standard industry practice. Make sure you re not reinventing the wheel! What patterns have you seen that could identify risk in advance? What terms/provisions are standard to the average contract? 4 of 6 fluent in energy
5 How are contract numbers being managed? What systems/locations do you access to create contracts? i.e. CRM, SAP, Filing Cabinets, Online Systems How many different users must approve a contract before it is sent out for execution? How do you determine who has the appropriate signature authority? Do you still require contracts be wet inked or are you utilizing digital signatures? How are you currently associating supporting documentation with contracts? i.e. correspondence, change requests, insurance FLEXIBLE SOLUTIONS FOR CONTRACT MANAGEMENT Below is a partial snapshot of the flow of information in SharePoint for one Entrance client: 5 of 6 fluent in energy
6 Each contract workflow is unique, but hopefully this shows you the type of information salient to SharePoint workflows. The beautiful thing about SharePoint is that it can be customized to work just like you do. Call us today at , or see an example of a streamlined SharePoint solution we developed for one client: 6 of 6 fluent in energy
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