Process Improvement

Why Poor Contract Management is the Ultimate Productivity Killer (and How to Fix It)

Do you spend time reading through long and complicated contracts, after they've been signed, just to understand what you’ve committed to? Does it take forever to retrieve contracts when it's time for a renewal or negotiation?

Are you, like so many others, managing your renewals using spreadsheets or Smartsheets?

If you nodded yes to any of these questions, you're probably wasting way more time on contract management than you realize.

The good news is it doesn't need to be this painful.

Check out today's video to learn how to get back some of that time you've been spending on manual, tedious contract management processes.

How to Avoid Implementing Expensive Software You Don't Need

Last year, we were brought in to assist a client who was in the midst of a procurement transformation.

Specifically, they needed help designing a contract management process for the Contract Lifecycle Management (CLM) software they were implementing.

When we spoke to the executives, they were all in agreement that one of the biggest gaps in their procurement process was the lack of a robust contract management system.

At least that's what their consultants had told them — the same consultants who had advised them to purchase a well-known, expensive CLM software solution.

Which begged the question... why did they need us?

You'd think an army of experienced business consultants and software developers could develop a contract management process that incorporates and optimizes the functionality of a robust CLM solution.

But there was the rub. The consultants weren't developing a process to suit the needs of the client, and then implementing a technology solution to work within the process.

Instead, they were installing software and then asking everyone to change the way they do things in order for the software to work properly.

Tasked with the responsibility of designing a new contract management process from scratch, we had to begin by debunking the terrible lies the client was being told.

Mergers and Acquisitions: Don’t Forget About the Suppliers

“According to the findings of the 2015 M&A Trends Report, an overwhelming majority of the 2,500 surveyed executives at US corporations and private equity firms expect the robust pace of mergers and acquisitions to extend–or even accelerate–in 2015. This momentum is expected across the board, in private and public businesses, in multiple industry sectors, in companies and private equity firms large, small, and in between.”

-Deloitte

It seems like every week we’re hearing about a new merger and acquisition between two entities or one corporation acquiring another.

As a Canadian I’d never thought I’d see the day when Tim Horton’s would merge with another fast food entity, especially Burger King.

King Horton’s or Burger Tim’s? What do I call them?

Or that Tata Corporation in India would acquire the venerable British car manufacturer Jaguar. How do I react to a Tata S-Type rolling off the assembly line?

And we don’t even hear about the thousands of other mergers and acquisitions that take place every year. 

We also don’t hear about the tremendous amount of planning, due diligence and negotiations that must take place for a successful merger and acquisition, or the disastrous aftermath when they don’t. 

As a contracts negotiator, I’m sometimes asked to assist clients in the due diligence phase or during negotiations. However, most of the time I’m brought in once the deal has been finalized and the parties are in post-acquisition, which I like to call the “Panic” phase.

Because the morning after the ink’s dried and the two parties begin rolling up their sleeves for the real work, a third party shows up. The supplier.

And they’re usually waving around a contract with one of the party’s that says it can’t be assigned to the other party without the supplier’s consent. So they’ve shown up to give their consent…in exchange for a small fortune.

Even the Best Technology Needs Good Process

We know that technology is the backbone of any successful organization and, as a company grows, it must constantly add and change the internal tools that will enable it to stay competitive and profitable.

This applies as much to Procurement as to any other department within an organization.

But new technology on it’s own can’t overcome gaps in a broken or non-existent Procurement process.

In fact, some Procurement groups will actually create redundant steps when forced to incorporate new technology solutions into an overly complicated, inefficient procurement process

Case Study: Procurement Process Redundancy

Replacing Staff Doesn’t Always Increase Efficiency

Organizations that once viewed Procurement as tactical, administrative departments are now looking to these same groups to not only reduce spend by way of better negotiation and supplier management but by also increasing efficiency and driving cost savings within their own department.

Some organizations will attempt to do this by centralizing Procurement and moving from transactional purchasing to a more dynamic Strategic Sourcing function, and replacing reactive purchasing agents with category-specific Procurement professionals.

These Strategic Sourcing experts have a deep understanding of their category and can also pre-emptively engage internal business partners to understand the multiple facets of business requirements, including the legal and financial parameters of an acquisition.

However, one thing to keep in mind is that the people in a Procurement organization are only as good as the tools and processes they have to work with. Simply changing one without addressing the other two will create the same problems for new staff.

Case Study: Procurement Transformation Gone Wrong