1 Contract Management The Mavericks Won t Like This! Keith Wallis
2 How Much Did That Project Cost? Real Life Example Original contract amount $500K Variations scope changes not visible Total variations = $2m Contract delivery and performance monitoring negligible Only when project was completed was the disaster discovered Your contracts are your business
3 Agenda Take The Contracts Test What is Contract Management? The Golden Triangle Key Statistics Contract Management Business Processes The Solution Contract Management Some Key Rules Benefits Implementation
4 Take The Contracts Test 90% of enterprises view effective creation, monitoring and management of contracts as either very important or critical to their overall business success.
5 Take The Contracts Test Can you see all your contracts, consumption & spend against each contract? Can you find your contracts at any point in time? How much did you spend against any specific contract last year? Do you have full visibility of agreed service levels? Are your suppliers invoicing accurately based upon the contracted pricing? Are your purchase orders raised prior to the contract being approved? Can your organisation gain efficiencies through process standardisation? Do you want to reduce contract negotiation timelines? How easy is it for you to update all contracts with a single clause?
7 What is Contract Management? Studies have shown that more than half of all companies cannot even locate signed copies of 10% or more of their contracts!
8 The Contract A contract is a mutually binding agreement that obligates the seller to provide the specified products or services obligating the buyer to pay for them Contracts clarify responsibilities and define key deliverables Contracts are used because they are more legally binding, there is more accountability There is a current trend to outsource work subsequently requiring a contract
9 What is Contract Management? The process of managing the contract and the relationship between the buyer and the seller, managing contract related changes and when appropriate, managing the contractual relationship with the outside buyer of the project. PMBOK (3 rd Edition)
10 Project Contract Management Begins at project inception with the appointment of project manager and team with development of project s outputs, benchmarks and risk allocation with an understanding that things will change down the road Success depends on planning, good monitoring and flexibility from all parties involved
11 Collaboration OLD WAY minimal collaboration NEW WAY collaboration access to contracts portal
14 The Golden Triangle Key Statistics Most organisations have multiple contracts with the same vendor stored in filing cabinets at different locations. These contracts often expire at different times, have been negotiated for different prices, and apply to different territories.
15 The Golden Triangle Maverick Spending Fragments Supplier Leveraging Asset Accounting Plant Maintenance Strategic Planning Resource Portfolio Management Investment Management Business Planning & Consolidation Labour Services 20% 30% Materials 50% Best Practice - 70% of spend is on contract Module Project Systems cprojects
16 Contract Management Aberdeen report 2007 Your contracts are your business
17 Contract Management Aberdeen report 2007 Your contracts are your business
18 Contract Spend Analysis - Benefits Contract Analysis Best in Class Industry Average Laggards Annual spend 500m 500m 500m Non contract spend 161m 219m 308m On Contract Spend 339m 281m 192m Purchasing transactions compliant 300m 180m 93m Purchasing transactions not compliant 39m 101m 99m Move to contract 59m 147m 5% savings - based upon increased compliance and move to contract 6M 10M
19 Contract Management Business Processes Procurement organisations believe that 70% of negotiated savings are actually realised. Chief Financial Officers view savings with only 35% realised.
20 Contract Business Process Renewal or Termination System Alerts / Paramaters Contract Adjustment & Extensions Change Guidelines New Contract Creation Enterprise Contract Repository Templates / Libraries Contract Negotiation Negotiation Guidelines Contract Review / Approval Workflow User Groups Contract Storage & Access Notification & Contract Distribution Contract Execution Signatories Distribution Lists
21 Procurement Process Identification of need Specification Supplier qualification and appraisal Accounting: whole life costing Contract management and review Tendering and tender evaluation
22 The Solution Contract Management Consider a $200 million spend agreement which offers a 10% discount on contract spend. Reducing maverick spend in this case by just 10% yields $2 million in real savings.
23 Contract Management Components
24 Contract Management Key Features Generate, negotiate and manage contracts with a single searchable contract repository Create a library of standard clauses & contract templates enforces legal standards Workflow based approval Automate all contract activity Track rebates and thresholds Executive dashboards Multiple reporting options
25 Contract Management Key Features Packaged integration Requirements, awards and contracts to ensure employees maximise leverage negotiated contracts and purchase from preferred suppliers Supplier collaboration Discussions Respond to bid requests Auction functionality Scorecard performance Negotiate contract terms Supplier Performance Management Analysis by activity and defined metrics
26 Contract Management Integration of all Project contracts and documents (drawings, scope, plans, risk analysis) Reality Check Side Issues Contract Administration Notice Changes Performance Reporting/Monitoring
27 Reporting Regular/ad-hoc reporting on various aspects of contracts, including: Supplier information Contract value Usage Savings Performance Improvement opportunities Key performance indicators Exceptions
28 Simple Consultant Contract All Online, real time, full history recorded Information to relevant departments
29 RFP / Tender Based Process Online / Templates / Libraries Auto / manual assignment All records recorder Online / supplier portal Online scoring, weighting showstoppers Discussions, opinions recorded Reasons
30 Variations May be necessary due to contractual arrangements: Changes to specified personnel; Changes to contract milestone dates; Changes to supplies quantities; Change in scope of the requirement Changes to specifications; and Introduction of new technology. Stakeholder consultation required
31 Variations Example SAP PS Simulate variation Gain approval (CM) Update project Plan Budget Schedule Execute Monitor Contract Management Create variation to contract Workflow Approve Supplier Approval Execute Monitor
32 Some Key Rules An organisation s proactive management of the creation, execution and analysis of its contracts will increase its financial and operational performance while reducing risks. Today s highly competitive economy demands contract management become a core competency.
33 Contract Management Activities Activities include: Keep documentation up to date Establish administrative processes around documentation and processes Managing the relationship Identify and manage of risks Monitoring Key Performance Indicators (KPI s) Motivate suppliers Protect the interests of the organisation Document and report on contract performance
34 Monitor Performance Effective Performance Monitoring requires the Contract Manager to: Advise Contractor of performance issues Develop effective feedback mechanisms Keep written records of all dealings with Contractor and administration of the contract Maintain comprehensive documentation
35 Benefits Studies have shown that for each dollar earned by an organisation, as much as 80 cents can be lost to procurement costs. The strategic importance of contracts becomes immediately apparent.
36 Contract Management Optimisation Standardisation templates / terms Enterprise wide contract process Enterprise repository Collaboration between buyer and seller Improve ability to analyse contract performance, compliance and risk Automation of lifecycle F i n a n c e L o g i s t i c s L e g a l Enterprise Contract Repository O p s U n k n o w n
37 Benefits Improved compliance with procurement terms Reconciliation of procurement and sales orders to the contracts Reduced legal support through standardisation Reduced time to contract & contract research time More efficient audit processes internal / external Visibility and transparency of the process Reduction in quick renewals and maverick buying Platform for customer and vendor profitability performance
38 Implementation Discussion Surveys indicate approximately 67% of company revenues are based on contracts. Revenue leakage, estimated at 5% to 9% of revenues, was at the top of the list of concerns driving these organisations toward improved contract management.
39 Implementation Low Cost quick payback immediate benefits Short duration - e.g. 3-6 months Staggered rollout of functionality Unique implementation methodology Trained up front maximise knowledge transfer Preconfigured data load templates Value prototyping using your data reducing implementation costs (Go / No Go decision) Only experienced consultants SAP relationship / delivery partnership
40 Questions Delivering PS Solutions Keith Wallis Head of Solution Strategy and Development TAMS 56 Berry Street North Sydney NSW 2060 Australia M: E: W: Methodology Portfolio and Program Management Investment Management RPM and cprojects Structuring Projects Scheduling Solutions Lifecycle Budgeting, Planning and Forecasting Integration Reporting Entire PLM Solution Map
SM Perfect Commerce s suite is an On-Demand solution that supports best-in-class supply management, from RFx s to contracts to results. provides visibility and control to strategic decisions made before
Emptoris Contract Management Solution for Healthcare Providers An Emptoris White Paper Emptoris, an IBM Company www.emptoris.com CMS-HP-4/12 Emptoris Contract Management Solution for Healthcare Providers
Product Overview ebid exchange Vendor Management Your branded vendor portal for vendor self-registration and inquiry. Sourcing and Bidding Tools for bidding, price analysis, reverse auction, and team scoring
Current Challenges in Managing Lifecycle Management s are the bloodline of your business. Due to increased pressure in volume, complexity and regulatory compliance, contracts have evolved from a simple
One Government Contract Framework September 2014 One Government Contract Framework Table of contents 1 Introduction... 4 2 Purpose... 4 3 Scope... 5 3.1 Contract management planning starts before a contract
How to Set Up and Use PeopleSoft Procurement and Supplier Contracts Keith Olander Director Product Management SCM PeopleSoft Copyright 2014 Oracle and/or its affiliates. All rights reserved. Oracle Confidential
Develop Project Charter Develop Preliminary Project Scope Statement Develop Project Management Plan Scope Planning PROCESS GROUP: INITIATION 4.1 The project charter serves as the input document for the
How Automation is Driving Strategic Sourcing Transformation at Citi Michael Krassos SVP Strategic Sourcing & Procurement Services Procurement Systems / Applications Management July 2012 Agenda Who We Are
Best Practices in Spend Analytics, Sourcing, and Contract Management Emily Rakowski, SAP SAP Procurement Summit: Newtown Square July 31-August 1, 2012 Sourcing best practices 2011 SAP AG. All rights reserved.
Procurement General Session: Empowering Modern Procurement Business Driven. Technology Powered. Marco Rossi SCM Product Development Director - EMEA Safe Harbor Statement The following is intended to outline
Enhancing Your Bottom Line by Optimizing AR/AP Processes Romil Turakhia, Director & COO, Automated Workflow email@example.com www.aworkflow.com We shall talk about Automation so far Solutions to Choose
IPAA PROFESSIONAL CAPABILITIES PROJECT Procurement Capability Standards Definition Professional Role Procurement is the process of acquiring goods and/or services. It can include: identifying a procurement
Adopt a Combination and Enhancement Approach to Deliver a World Class PPM Solution Keith Wallis Head of Solution Strategy & Development Who Remembers? When we went to work to: Enjoy SAP or use mysap About
ORACLE SERVICES PROCUREMENT KEY FEATURES Create contracts for services with complex payment terms Incorporate progress payment schedule into services contracts Track and report progress based on schedule
Procure-to-Pay How Finance and Procurement Can Join Forces to Drive Significant Savings Contents 3-5 6-7 Introduction Q1. How Do We Go About Understanding, Qualifying, Monitoring, & Engaging With Our Suppliers?
VISA COMMERCIAL SOLUTIONS BEST PRACTICES SUMMARIES Profit from the experience of best-in-class companies. Introduction To stay competitive, you know how important it is to find new ways to streamline and
J A N U A R Y 2 0 1 4 ECM for Supplier and Contract Management Maximize the value of your procurement partnerships This paper looks at current challenges and trends in supplier and contract management;
Solution in Detail Enterprise Asset Management Executive Summary Contact Us Real Estate Lifecycle Management Boost Your Real Estate Portfolio Portfolio Management Optimized Management Managing corporate
Request for Proposal Contract Management Software Ogden City Information Technology Division RETURN TO: Ogden City Purchasing Agent 2549 Washington Blvd., Suite 510 Ogden, Utah 84401 Attn: Sandy Poll 1
Taking Control of Your Contracts: Best Practices for Contract Management and 1 Richard Waugh VP of Corporate Development at Zycus > Richard Waugh, VP Corporate Development at Zycus, has an extensive background
web3 esourcing Product Paper web3 esourcing Functionality Wax Digital web3 esourcing is a powerful toolset for the professional purchaser looking to drive best value and optimise strategic sourcing outcomes.
Protecting the Single Source of Truth: Effective Contract Management as a Core Business Strategy The source of truth for all critical financial and operational corporate data can be found within the underlying
The case for improved Procurement and Vendor Management The current market environment is calling for increased operational efficiency and effectiveness, where value for money and market contestability
Standard Operations Business Operations process forms the core of all our business activities SMS-GS-O1 Operations December 2014 v1.1 Serco Public Document Details Document Details erence SMS GS-O1: Operations
Health Purchasing Policy 4. Contract Management and Asset Disposal Ensuring value for money outcomes are realised with effective and efficient contract management 26 June 2014 1 Health Purchasing Policy
Business Unit Finance Effectiveness Efficiency An overview Agenda Page 1 Efficiency - An overview 1 2 Our services 7 3 Case study 14 Section 1 Efficiency - An overview 1 Section 1 Efficiency - An overview
SOLUTION BRIEF: CA IT ASSET MANAGER How can I reduce IT asset costs to address my organization s budget pressures? CA IT Asset Manager helps you optimize your IT investments and avoid overspending by enabling
Plan to Pay (P2P) Optimize your process to Manage your Contractors with Oracle Primavera July, 2012 Agenda Oracle View of Plan to Pay (P2P) Composite Process Component Review Project Planning & Portfolio
RDTL MINISTRY OF FINANCE Procurement Service BEST PRACTICE GUIDE 7: MANAGING CONTRACTS 1 RDTL Procurement Guidelines The Procurement Legal Regime Decree Law sets out new procurement processes which must
White Paper Contract Document Management with SharePoint Nobody wants to be kept awake at night by a contract management nightmare. Contracts can be complex with multiple draft versions, signed copies,
Project Services Many organisations struggle with inconsistent or poor project management performance across their business. Sometimes the failure to deliver on time and on budget (or at all!) is simply
IBM Emptoris Procurement SaaS Service Service Definition IBM Emptoris Procurement SaaS Service 1 1. Summary 1.1 Service Description IBM is focused on providing Best in Class Supply and Contract Management
POSITION INFORMATION DOCUMENT Position Title: Senior Manager, ICT Contracts Classification Code: ASO8 Division: ICT Services Directorate: ICT Contracts & Performance Management Type of Appointment: Branch:
WHITE PAPER Better Contract Management: Less Paper, More Connections How do I get off the paper chase? The top priorities for busy purchasing executives are improving efficiency, reducing costs and building
ORACLE SOURCING & SOURCING OPTIMIZATION KEY FEATURES Two Stage evaluation of RFP Support for Two Stage RFQ surrogate bids Automatic knockout of suppliers from shortlist Support for contracts with complex
PROACTIS Solutions & Services for Procurement What we do for you as the person responsible for procurement How We Help increase savings, reduce risk and improve efficiencies by increasing your organisation
YARDI Procure to Pay SuiteTM Go paperless with our centralized procure to pay solution. Reduce costs with online catalogs, electronic invoice processing and vendor, bid, and contract management. Gain valuable
3 Contract Find, store and manage all your supplier s Procurement Professionals: The Big Picture & The Things You Can Address Today The Spend Control environment you really want one that maximises savings
THE BENEFITS OF TELECOMMUNICATIONS LIFECYCLE MANAGEMENT INTRODUCTION In today s business environment, technology is changing at a rapid pace All organisations must consider which Telecommunications services
Adoption of a PPM Solution Using An Agile Approach Andy Robinson 1 Agenda Drivers for using a Portfolio and Project Management system Organisational maturity Where to start Planning, delivery, realisation
SAP Brief Ariba s Ariba Contract Management Objectives Accelerate Time to Value and Innovation Through Complete Contract Management Objectives Drive spend compliance across all contract types Drive spend
15-Minute Guide to Contract Lifecycle Management Table of Contents Contracts: The foundation of business.................................... 4 Contract lifecycle management..........................................
Case Case Study Forrest General Hospital Drives Greater Process Efficiency and Compliance through Contract Management Centralization Organization Forrest General Hospital Hattiesburg, Mississippi GHX Products
Thought Leadership White Paper Introduction Contracts form the foundation of all businesses and every business relationship. They define every aspect of a business s activities procurement, sales, marketing,
CONTRACT MANAGEMENT COURSES Principles and Practices Administration of Commercial Contracts Commercial Applications Risk Management in the Sourcing Environment TM Principles and Practices Identify contract
Fleet Management Services Welcome to Smartfleet What is Smartfleet? Overview Managed Services Powerful Modules Reporting Overview Smartfleet is a leading Australian fleet management company, helping organisations
Procurement guidance Managing and monitoring suppliers performance Procurement guidance: Managing and monitoring suppliers performance Page 2 of 16 Table of contents Table of contents... 2 Purpose of the
Resource Manager Service for provision of ICT contractors CPO 798-11 Whole-of-government procurement arrangement Briefing for suppliers QGCPO Department of Housing and Public Works Key messages Consultation
Enterprise Content Management for Procurement Extending SAP capabilities is a key aspect of advanced Enterprise Content Management Today s procurement departments need extended content management solutions,
CONTRACT MANAGEMENT FRAMEWORK August 2010 Page 1 of 20 Table of contents 1 Introduction to the CMF... 3 1.1 Purpose and scope of the CMF... 3 1.2 Importance of contract management... 4 1.3 Managing contracts...
ISO20022 Trade Services Dashboard Description of business processes 1 Trade Services Description of Procurement: Sub-Functions Tendering Ordering Delivering Invoicing Process for buyer to contact potential
Asset Management Software is the last thing you need Asset management is finally getting the recognition it deserves particularly in the IT arena. But despite a lot of hard work, especially on the part
Sourcing and Managing Marketing Agency Spend Marika Lindstrom, Director Global Business Services Global Supply Management AMD Inc. Tel. 512/9348465 firstname.lastname@example.org 93 rd Annual International Supply
PSPPROC506A Plan to manage a contract Revision Number: 2 PSPPROC506A Plan to manage a contract Modification History PSPPROC506A Release 2: PSPPROC506A Release 1: Unit Descriptor Layout adjusted. No changes
IBM Software Industry Solutions Management Improving sales effectiveness in the quote-to-cash process Improving sales effectiveness in the quote-to-cash process Contents 2 Executive summary 2 Effective
POLICY CONTRACT MANAGEMENT POLICY POLICY STATEMENT The intent of this policy is to establish a University-wide governance structure for managing contracts and other legally binding documents. The Policy
Page 1 Universal Service Administrative Company (USAC) Request for Information (RFI) for Contract Management Software Solutions and Procurement Front-End System RFI Number: USAC-FI-2016-02-005-RFI Title:
Contract Management in the Mid-Market Better External Relationships, Better Internal Performance July 2006 AberdeenGroup Executive Summary The primary goal for contract management within any company is
Best Practice Performance Measurement of the Procurement Function How to Identify and Measure Key Performance Indicators and Reporting on the Procurement Function Agenda Importance of measuring Procurement
1 SharePoint and Contract Management Alan Weintraub Practice Director ECM Consulting (610) 234-4032 (office) (484) 467-5720 (Mobile) 2 Agenda What is SharePoint MOSS 2007 Contract Management Demonstration
It all Starts with the Invoice Speakers Mel Steals Director of Invoice Automation Solutions PNC Bank Amy Rush Shared Services Controller Courtney Caton Finance Manager Westmoreland Coal Company 1 Agenda
Overview of Primavera Unifier & Contract Management Don McNatty, PSP Jonathan McNatty, PSP August 28, 2013 2013 Technical Webinar Series Thank you for joining today s technical webinar Mute all call in
1. Introduction Background The National e-procurement Project (NePP) and Centre for Procurement Performance (CPP) are working to support and enable schools to meet their e- Government targets and to gain
.. TrackerRMS Customer relationship management The foundation component of TrackerRMS offers an all-in-one solution that can be applied to any type of business that require a mechanism for tracking customer
One source. One amazing service. Procurement Process and the Sarbanes-Oxley Act May, 2005 EXECUTIVE SUMMARY Public companies are spending a great deal of time and effort to comply with the Sarbanes-Oxley
Part of the Deloitte working capital series Make your working capital work for you Strategies for optimizing your accounts payable The Deloitte working capital series Strategies for optimizing your accounts
Product Lifecycle Sourcing enabled by Teamcenter s SRM solutions White Paper In today s era of outsourcing, most companies find that the lack of coordination among suppliers, procurement and product development
Frequently asked questions Suppliers Resource Manager Service for ICT contractors QGCPO Department of Housing and Public Works Frequently asked questions suppliers Page 2 of 21 Queensland Government Resource
Telstra Service Framework Your assurance of first-class network support The Service Framework delivers comprehensive, integrated support Service Frame work SERVICE IMPROVEMENT & REPORTING Performance &
Contract Life-Cycle Management Contract Management Solutions Are Now a Critical Competitive Advantage Enporion, Inc. October, 2008 TABLE OF CONTENTS Introduction...3 Contract Lifecycle Management and its
Sage CRM Contract Manager Gain full control over contract lifecycles with Sage CRM Enbu Consulting has unrivalled, direct practical knowledge and experience with the Sage CRM system over many years. CRM
www.gxs.co.uk SM GXS Active Orders Optimising the Procure-to-Pay Process GXS Active Orders automates the procure-to-pay process for companies interacting with a global and diverse supplier community. Active
J A N U A R Y 2 0 1 4 ECM for Order-to-Pay Maximize Operational Excellence This paper looks at current order-to-pay challenges and trends; what organizations should consider in an order-to-pay solution;