better contract governance through workflow · transformation efforts. prior to selectica, bill...
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Better Contract Governance Through Workflow IACCM – Selectica Webinar Tuesday, April 28th 2015
Webinar Agenda
• Presenter Introductions
• Workflow Challenges
• Selectica Perspective
• Case Study
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Our Speakers Today
As CEO of IACCM, Tim works with organizations to support understanding of the role that procurement, contracting and relationship management play in business performance and public policy. Prior to IACCM, Tim's career included executive roles at IBM and a period on the Chairman's staff, leading studies on IBM's global contracting processes. His earlier career involved the banking, automotive and aerospace industries. He led negotiations up to $1.5bn in value and his work has taken him to over 40 countries. Tim's writing is extensively published and he has acted as an advisor to many of the world's largest companies and government bodies including the US, UK, Australia, Canada and Japan. As the Vice President of Contract and Supply Management Solutions at Selectica, Bill drives the go-to-market strategy and works with customers and prospects to aid in their transformation efforts. Prior to Selectica, Bill spent 12 years in the procurement solution space with IBM and Emptoris where he built his expertise in Analytics, Supplier Management, Risk and Compliance while acting across various disciplines. Bill is a recognized Supply Management luminary including having been selected as a “Pro-to-Know” by Supply and Demand Chain, a speaker at events and author of papers. Bill's prior experiences were as Technology Director for consultancies, including Cambridge Technology Partners. Bill also led software Product Management teams in the B2B solution space. Bill has a Bachelor of Science in Computer Science with a Minor in Mathematics from Northeastern University. Eric has 15 years of experience in SaaS enterprise applications. At Selectica, he oversees technology solutions for companies looking to implement contract lifecycle management. His experience at some of the largest SaaS companies in the world includes scaling software engineering, web services business model development, and introducing platforms into new markets. Prior to Selectica, Eric lead the western US region solutions engineering at Netsuite, served as head of sales engineering at Aria Systems, and served as CEO of Doubloon, a SaaS big-data startup aimed at monetizing freemium products.
Tim Cummins Chief Executive Officer, IACCM
Bill DeMartino VP, Solution Strategy, Selectica, Inc.
Eric Gonzalez Solutions Engineer, Selectica, Inc.
Workflow Challenges
What is IACCM?
Copyright © 2015 IACCM
As the leading international professional association, IACCM is at the forefront of change and defining new standards. Its core value is in bringing together the thought-leaders who can address shifting roles and needs - cross-discipline academics, buy side and sell side contract and commercial managers, the legal community and leading technology and service providers.
Lack of clarity
on scope and
goals
1
Result: Cause of
claims/disputes
3 Failure to
engage
stakeholders
Result: Misaligned
interests and future
opposition
Negotiations focus
on the wrong terms
and risks
Result: Performance
management dominated by
blame/fault
7 Contracts
difficult to use
or understand
Result: Users see contract
as irrelevant to business
needs
9 Limited use of
contract
technology
Result: Inefficiency and
loss of quality in
performance and analysis
Average value
erosion 9.2%
Legal/contract
team not
involved early
enough
2
Result: Wrong form of
contract & extended
lead time
4 Protracted
negotiations
Result: Competitive
exposure & delayed
revenues
6 Contracts lack
flexibility.
Insufficient focus
on governance
8 Poor handover
from deal team to
implementation
team
Result: commitment &
obligations missed &
misunderstood
10 Poor post
award
processes and
governance
Result: Repetitive issues
and errors causing value
loss
10 Pitfalls
Copyright IACCM 2015
Result: Loss of
economic benefit;
contract a weapon
5
Copyright IACCM 2015 8
Stakeholder analysis and management
Growing complexity in building and maintaining stakeholder alignment High
Keep
Satisfied
Manage
Closely
Power
Monitor
(Minimum
Effort)
Keep
Informed
Low Interest High
Copyright IACCM 2015 9
Handling workflow complexity
principles-based negotiation;
industry standard agreements;
improved risk assessment through segmentation;
obligation management;
focus on contract owner responsibilities
The new DNA for commercial activities £
Goal
High
Low
Time
spent on
value
added
activity
Before going
to market
Procurement
Process Contract and
supplier
management
Managed Commercial Services delivered centrally - once on behalf of Government
UNCLASSIFIED
Developing requirements that
shape markets and the supply base to Government
Improving contract and supplier management
capability through application of new
standards
Simplifying process and reducing turnaround times & supplier bid
costs
Before
10
Copyright IACCM 2015 11
Understanding Workflow & Its Impact
The efficiency with which workflow is managed has a direct impact on FTE headcount
There is a dedicated contract/commercial staff
There isn’t a dedicated contract/commercial staff
32 118 Source: IACCM 2015 Benchmarking Study
What is the average cycle time (weeks) from the initiation of the bid to contract signature for each contract type (Domestic contracts)
2015 Sell Side Buy side
Low complexity
0-25% <4 <4
25-50% <4 <4
50-75% 4 4
75%-100% 11 13
Medium complexity
0-25% 5 5
25-50% 7 7
50-75% 11 11
75%-100% 18 18
High complexity
0-25% 8 10
25-50% 16 18
50-75% 24 28
75%-100% 28+ 28+
2011 Sell Side Buy Side
Low complexity
0-25% <4 <4
25-50% <4 <4
50-75% 5 5
75-100% 8 8
Medium Complexity
0-25% 5 5
25-50% 8 7
50-75% 9 11
75-100% 19 16
High Complexity
0-25% 10 8
25-50% 17 15
50-75% 28+ 19
75-100% 28+ 28+
4%
10%
15%
16%
8%
21%
12%
6%
4%
8%
3%
2%
5%
7%
13%
12%
11%
16%
10%
6%
4%
7%
4%
5%
0%
5%
10%
15%
20%
25%
On average, how much time (%) does your group / function spend on these activities?
2015 2011
Selectica Perspective
Selectica | IASTA
Recognized SaaS provider • A state-of-the-art, cloud-based
provider of contract management, sourcing, and supplier management solutions
A Global Company • Selectica (NASDAQ:SLTC) • Sales & delivery offices
• Global HQ: San Francisco • US Operations: Indianapolis • Europe HQ: London
• 10+ years delivering innovative
technology solutions • Installed base of more than 240 • Blue-chip clients • Key industries including retail,
financial, healthcare, media and transport
The unifying elements of the merger promotes untapped synergies and creates a leader in the marketplace.
Selectica | IASTA
Recognized SaaS provider • A state-of-the-art, cloud-based
provider of contract management, sourcing, and supplier management solutions
A Global Company • Selectica (NASDAQ:SLTC) • Sales & delivery offices
• Global HQ: San Francisco • US Operations: Indianapolis • Europe HQ: London
• 10+ years delivering innovative
technology solutions • Installed base of more than 240 • Blue-chip clients • Key industries including retail,
financial, healthcare, media and transport
The unifying elements of the merger promotes untapped synergies and creates a leader in the marketplace.
Selectica Enters Into Agreement to Acquire b-pack
The addition of P2P
Extensive presence in France
350
Increased focus on compliance and risk • Amplified reliance on strategic suppliers • Increased regulations and audits
The “customer-driven” enterprise emerges • Specialized buy and sell-side contracts • More frequent contract negotiations
Business dynamics demand consistency and visibility • Growth in mergers and acquisitions • Increase in contractual disputes
Market forces today propel contract management to the forefront…
Achieving Best-in-Class contract management is a journey to holistically embrace CLM across the enterprise
Visibility • Contract repository • Basic contract types • Departmental CLM • Email routing tool
Maturity (organization, processes & technology)
Value (savings & business impact)
Governance & insight • Contracting approval
workflow • Organized contractual
meta data • Milestone fulfillment
tracking • E-signature • CLM process KPI
dashboards
Compliance & value maximization • Ad-hoc language analytics • Obligation and
Commitment tracking • Integration to SM for
compliance • Integration to CRM for
revenue tracking • Mass change amendment (
renewals) • Dynamic clause
optimization
Manage risk & collaborate • Alerting when relevant events
occur • Executive summary portal • Automated multi-party
workflow • Grouping dependent
contracts • Interdependent amendment • Automated identification of
misaligned commitments
Contract Repository
Siloed CLM
ECLM
Contract Management serves many constituents across the enterprise
Workflow is a critical tool to align stakeholders
Benefits of Workflow Selectica Customers Examples
“By having a singe point of entry and clear workflow lifecycle with Selectica, we’ve achieved significant contract savings due to alignment of procurement and legal resources to support key sourcing and contracting projects”. Entertainment & Sports
“One of the things we like best about Selectica CLM is that we could describe our process and it could be very closely emulated by the Selectica CLM workflow engine. We have targets for turn-around times on contact requests and now we are not only achieving compliance to a more rigorous review
process, we’re also doing it more quickly”. Global Staffing Firm
Compliance Savings Alignment
Higher Quality Reduced Cycle Time
Workflow is inherent for Best-in-Class CLM
A
Requester Final Approver
NDA
Serial Approver
B C
Final Approver
A
Requester
MSA
Parallel Approvers
B
C D
D B
Approver if Contract < $200K
C
Approver if Contract > $200K
Final Approver
Ad-Hoc Approver
A
Requester
SLA
E
Simple Scenario
Parallel Scenario
Dynamic Scenario
Going beyond document workflow
FIELD TYPES
LANGUAGE (Terms,Clauses)
TEMPLATES
CONTRACT
Contract Object Data Fields & Properties
Each contract object is a component of what makes up a contract
CONTRACT OBJECTS
Building workflow at the clause level ensures contract language is approved by the right authority
Contract Types
Creation Timeline
Status Summary
Amendment Summary
Expiration Summary
Renewals Summary
Clause Usage
Clauses Added / Removed
Organizations continue to utilize the same templates and clauses regardless of their effectiveness or business context (e.g. a desire to fast-track a negotiation). The insights available via the coupling of workflow & clauses leads to better outcomes; • Detect trends on clauses and their approval cycles • Clause driven optimization (indemnification, SLA, audit) • Contract scope & goals tracking / remediation
Taking it to the next level
CLM & Workflow The Bigger Picture
• Approval processing is the default
• Other scenarios benefit from workflow
– Standard language creation and management
– Request processing
– Vendor On-boarding
4/28/2015 25
Case Study
4/28/2015 27
Case Study : Pepsi Sustainability Initiative Rapid Response via Smart Internal Controls
4/28/2015 28
Case Study : Pepsi Sustainability Initiative Rapid Response via Smart Internal Controls
4/28/2015 29
• Sourced exclusively through RSPO member suppliers. • Originated from responsible and sustainable sources. • In compliance with our Forestry Stewardship Policy, No further development on High Carbon Stock Forests, High Conservation Value Forests, or conversion of Peatlands. http://www.pepsico.com/Assets/Download/PepsiCo_Palm_Oil_Commitments.pdf
Case Study : Pepsi Sustainability Initiative Rapid Response via Smart Internal Controls
“In 2010, PepsiCo committed, through the Roundtable for Sustainable Palm Oil (RSPO), to source exclusively 100% RSPO certified sustainable palm oil by 2015.”
4/28/2015 30
Case Study : Pepsi Sustainability Initiative Rapid Response via Smart Internal Controls
Source
Award to Contract
Integration
Award Compliance
Visibility Optimization
Obligations Management
Risk M Award to Contract
Integration
Auditable Change
Management
Negotiation Support
Internal Signoff
Controls
Legal Proactive Legal Clause Control
Version Management
Alternate Clause Enforcement
Legal Impact Visibility
Request Collaborate Negotiate Execute
Single Source of Truth for All Contracting Activity
4/28/2015 31
Sourced exclusively through RSPO member suppliers.
• RSPO member suppliers are centrally maintained in an authorized suppliers directory. (RSPO provided access to verify)
• In compliance with internal control policies, requestors are not authorized to add suppliers.
Originated from responsible and sustainable sources. • Sustainability certification and third party compliance documentation
required prior to contract request processing • Yearly Contract Renewal tracking for audit engagements, per contract
terms, audited by an independent party. • Tracing of sourced palm oil to the plantation level, per contract terms.
All while cutting millions off compliance costs.
Case Study : Pepsi Sustainability Initiative Rapid Response via Smart Internal Controls
The End: Q & A