Three ways contract management technology can add value to complex project management

June 13, 2011

We are delighted to invite guest editor, Ian Furlong who has extensive experience in managing contracts as part of major program project management with Intel.  Ian has recently written a white paper outlining three ways in which contract management technology solutions can add value to complex project management.   This article summarizes the key ways in which Contract Management software solutions, like Dolphin Contract Manager, can help major program managers to maximize the value that can be extracted from long term contracted relationships.

In the contract management world we sometimes overlook how managers responsible for project delivery engage with contracts. After all Project Managers govern work with budgets as big as the turnover of a medium size corporation and the contracts are the fabric of what needs to be done.

In this white paper we take a visionary look at the interaction of Project Mangers and their project contract portfolios, in particular three ways where we believe Contract Lifecycle Management software can help deliver business value.

At the highest-level contract management software helps to master the complexity both of managing multiple contracts for a single business relationship as well as in building a portfolio of sub-contractors to deliver the work. The ability to shine a light on the interdependencies of these relationships is important in reducing the risk associated with interrupting the flow of the project once work has started.

Looking within the contract documents themselves we see Contract Lifecycle Management software as a means to document unstructured as well as structured obligations. This rich picture of obligations gives the project team greater leverage in its exchanges with contractors at all touch points but particularly when renegotiation of the contracts takes place.

And finally we look at the different management perspectives on the contract documents and how Contract Lifecycle Management software can help project team members to communicate more effectively with one another and with project support functions.

Dolphin Software wrote this white paper together with Ian Furlong a co-founder of Oxford Major Programmes Ltd. Oxford Major Programmes, a new company specializing in establishing ways of improving the management of the largest projects and programmes, has been established by a group of experienced industry leaders participating in the Masters in Major Programme Management at the Oxford University Said Business School.

A free copy of Ian Furlong’s white paper: Three ways contract management technology can add value to complex project management can be downloaded at:  http://www.dolphin-software.com/downloads_ian_dl.htm

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Does your contracting process make it difficult to close out business at the end of the quarter?

May 31, 2011

Closing out business at the end of a quarter or at the end of a financial year can put a huge strain on the commercial and legal contracting process, particularly if your contracting process involves manual effort and inefficient use of technology.

For many companies, the traditional way of requesting contracts from Legal and waiting for several days to receive a first draft of the contract, is the norm.  The problem that businesses encounter is not the desire to contract effectively with third parties, but in the outdated ways in which departments like Sales, Legal and Commercial Contract Management functions use technology to support the contracting process.

It is still common in many leading organizations for business users to have to wait for days, or weeks in some cases, from first request to final draft of a new contract.   This is because the contract management process is perhaps one of the last key business processes to be automated and it is ironically accepted to be the norm that contracts should be drafted manually in MS Word, with terms and conditions being copied from past contracts and for review copies to be distributed internally via email.

All of this creates delay, inefficiencies and duplication of effort.  For businesses that are focussed on delivering quarterly targets, the emphasis must surely be on contracting faster, but effectively.

A new generation of Contract Lifecycle Management solutions, like Dolphin Contract Manager, aims to radically improve the contract request-to-final draft cycle time through the use of technology that automates the manual phases in the contracting process.

Dolphin Contract Manager introduces the concept of Self-Service Contract Authoring, where business users – like Sales Managers, can create tailored and compliant contracts for their customers in a fraction of the time that would have previously been possible through manual drafting.  The use of electronic workflows to speed up contract reviews and approvals has also had a major impact on the ability to get contracts drafted and negotiated on time, without the Legal department being seen as a corporate bottle-neck.

Dolphin Software and Perficient are hosting a free-to-attend webinar on how Contract Management software solutions are being used to help sales teams to contract faster.  For further information and to register for this event, please visit:  http://www.dolphin-software.com/lp_quarter_end_Perficient.htm


“Only 50% of contracts are counter-signed” …

January 26, 2010

This staggering claim was made by the General Counsel of a global Marketing Services agency that Dolphin Software met earlier this week and highlights the very real issue facing legal teams and contract managers around the world.

Perhaps this is a statistic that not many General Counsels will admit to, but it is a well known fact that, despite all of the time and effort that goes in to the drafting and internal approval process for contracts and agreements, once a contract is sent to a third party (customer, partner, supplier, etc) you lose almost all of the control that you had. 

For many companies, contracts are drafted manually in Microsoft Word, emailed as attachments to internal colleagues for reveiw and approval and then emailed to the external party.  This is where things can often go wrong.  The process is inherently inefficient.  By emailing contracts outside of your organisation, you are effectively giving up any hope of controlling the contracting process.  You are dependent on the external party following your guidance on timelines, information security and amending drafts – not to mind the administrative burden of having to deal with mutiple versions of draft contracts been sent back to you via email.  In fact, the external contract negotiation phase in the contacting process is one of the biggest causes of delay in contract cyle times.

Lets face it, it is inconvenient to print out contracts, sign them, and scan them.  Many signed paper contracts sit on the desks of managers for days, and in some cases, weeks before they are forwarded on in an email or uploaded in to a contract repository.  This is bad news for commercial contractors who are looking to conclude business and bad news for purchasers who are looking to bring a new supplier on board.

A new generation of contract management software solutions, like Dolphin Contract Manager, aim to make this process easier for contracting parties and more efficient.  Rather than attaching draft contracts to emails for internal approval, many contract management solutions facilitate this process through a managed approval workflow process, where managers access a single copy of the contract that is stored in a central repository; and rather than emailing external parties, secure external workspaces can be created so that contract documents can be uploaded and external parties can collaborate and negotiate amendments to contracts in a secure and time-controlled environment.

Digital Signature solutions, like CoSign from Arx, can also play a big part in reducing cycle time by allowing both internal staff and external parties to review contracts electronically and digitally sign them without having to print, scan and upload.

It is no wonder then, that contracts that are sent to third parties are often not counter-signed and returned.  The current way of doing things is just too inconvenient. 

Is this an issue for you too?  Take part in our poll below:


IACCM research: World recovery shows patchy progress

October 1, 2009

2009 has been an ‘annus horribilis’ for many, with the deepest recession and toughest trading conditions in living memory, that nobody had accurately predicted; but a new survey published by the IACCM (International Association for Contract and Commercial Management) indicates that market conditions are beginning to stabilise.

More than half of the top contract negotiators and managers who were polled by the IACCM expected economic conditions to improve in the next six months.

IACCM Oct 2009 last 60 days

The research shows that 50% of the respondents noted that they were still experiencing significant pressure to reduce or renegotiate prices on existing agreements, with the same proportion of contract professionals entering in to new contract negotiations.

However, the IACCM research indicates that much of this new activity is due to buyers entering in to negotiations with vendors to switch incumbent suppliers in an attempt to reduce and streamline procurement spend. 

The big casualty of the economic recession seems to have been corporate ethics – with 34% of the survey respondents suggesting that ethical standards in contract negotiation had fallen since the beginning of the recession.  The main ethical issues at stake here are:

  • customers who unilaterally extend payment terms
  • unreasonable pressure to cut prices on existing agreements, and
  • overselling by salespeople to win business

IACCM Oct 2009 - impact of trading conditions on ethical standards

Many companies are now looking ahead to what 2010 will bring and best-in-class organisations are already positioning themselves to take advantage of new opportunities to streamline their contracting processes as trading conditions improve.   This will lead to a flurry of activity to improve and streamline contracting processes with tools, like Contract Management solutions, that help to automate and manage contract commitments and obligations more effectively.

If you are planning your 2010 budgets right now, don’t forget to include a contract management software project in to your strategic plans.

The IACCM research was conducted in September 2009 and surveyed 13,000 business negotiators and contract management professionals from 2,000 companies worldwide.


Aberdeen Group survey: Contract Management as critical as Customer Relationship Management

August 7, 2009

Quote to cashA recent Aberdeen Group survey conducted with CRMToday highlights the strong feeling that many respondants have about the need to streamline and manage the sell-side contract management process to maximise revenue opportunities.

Aberdeen Group suggests that around 18% of a typical sales cycle is spent in contract creation, internal approval processes and external negotiation.

The Aberdeen study shows that on average respondants to the survey estimate that 9% of sales revenue is lost due to regulatory penalties, missed deadlines and obligations, lost sales orders, ‘maverick’ pricing and transactional errors. 

According to the research, a one day reduction in the sales cycle of company is worth $80,000 on average (this increases to $215,000 for larger organisations).  Best-in-class organisations have sales cycle times that are 10-15 days shorter than other companies.  So you can begin to see how an investment in streamlining the contract management process can have a major impact on the bottom line.

Aberdeen recommends that companies take the following actions to improve the ‘quote-to-cash’ cycle time:

  1. Migrate all current active contracts in to a contract management system and make use of functions like contract clause libraries to streamline contract negotiation
  2. Streamline the quote-to-cash process by integrating your Contract Lifecycle Management system with your CRM and Finance systems.
  3. Use contract management software to track contract milestones and obligations
  4. Utilise reporting and analytical tools to measure contract performance regularly

Contract Lifecycle Management solutions, like Dolphin Contract Manager, provide comprehensive contract management functionality across each stage of the contract lifecycle, allowing sales teams to:

  1. streamline the contract creation process
  2. automate internal reviews and approvals
  3. provide a central repository for all contracts and related documents
  4. provide secure external workspaces to speed up external contract negotiation
  5. allow key stakeholders to proactively manage contract commitments and obligations through alerts and management reports
  6. integrate contract data with back-end systems like CRM and ERP solutions.

In the business world we have become accustomed to identifying manual and inefficient processes and automating them with technology solutions.   However, in many organisations, critical business processes like the Contract process and Quote-to-cash process remain largely paper based, slow and wasteful.  Contract Management software solutions, as the research from Aberdeen Group has shown, have the potential to create a significant and immediate positive impact to the bottom line of a company. 

As companies continue to struggle and compete in a challenging economic climate, now is the time that you should start to think more strategically about how you are managing your contract process.