17 September 2009 - 17:14Report demands UK public sector improve supplier management

This Report discusses the risk of supplier failure increasing because of the financial climate and the ongoing risks faced by buyers through not monitoring contractors and contractor risk pro-actively.

“The report recommended a number of measures to help government buyers improve contract management. These include stringent controls surrounding supplier behaviour, better risk management over the life of a contract rather than just at the start, and introducing systems that provide an early warning of suppliers who are struggling.”

We all tend to become better economic managers in the tough times out of necessity. The real challenge is maintaining this type of good governance over agreements and contractor relationships in the good times as well.

No Comments | Tags: Contract Management, contract lifecycle management, general forum

13 September 2009 - 17:01Contract Management listed as significant challenge for NARA

In its most recent semiannual report to Congress covering October 2008 to March 2009, the National Archives and Records Administration’s Office of Inspector General (United States) listed Contract Management in what it considers the 10 most significant challenges that the agency faces.

No Comments | Tags: Contract Management, contract lifecycle management

5 September 2009 - 0:53Australian ISV grows faster thanks to financial crisis

ARN has picked up the story on Open Windows’ recent win at RMIT.

The article has focused not only on RMIT and the Education sector but also the fact that the need for contract management systems is highlighted by falling revenues. We all must drive value in current agreements and expenditure to positively impact the bottom line. This should be the rule, rather than the exception. Organisations tend to get lazy when times are good.

No Comments | Tags: Contract Management, Contract Management Software, Contract Software, Open Windows, contract lifecycle management, general forum

27 August 2009 - 16:48Outsourcing needs strategic contract management

This is not new, but Gartner said today that firms ”focus too much on the operational level of outsourcing, and not enough on the strategic management of contracts.”

As I always say, “you can outsource the process but not the accountability!”

The article talks about aligning sourcing actions with business goals and the importance of the competencies of strategic sourcing. This is clear, you must focus on outcomes. You must get it right when you put the agreement in place or you will pay for it during delivery. It’s much more expensive to correct errors after you have let the contract.

Gartner research director Frank Ridder said “Many organisations struggle to develop an effective and efficient sourcing environment, which is necessary to achieve positive sourcing outcomes.” Effective contract lifecycle management systems like Open Windows Contracts pro-actively automate the sourcing process for organisations. They provide education on how the process should be performed, as well as accountability and auditability.

No Comments | Tags: Contract Management, Contract Management Software, Contract Software, contract lifecycle management

23 August 2009 - 23:00Contract Management for every transaction

Public companies considering not having a good system in place to manage contracts are facing a huge burden everytime they make an aquisition and add to the due diligence cost on both sides of a transaction.

One of the first questions asked in the process is, ‘what contracts do you have?’ Well, what contracts do you have and how quickly can you give me a summary into risks and exposure at a contract level?

Putting in place a contract lifecycle management system ensures operational contract management that simply rolls up into reporting.

Many companies I know embark on a massive data gathering expedition each and every time somebody asks a question.

Are you prepared for your next transaction?

No Comments | Tags: Contract Management, Contract Management Software, Contract Software, contract lifecycle management

14 July 2009 - 4:02Negotiation: best to talk it through

So what’s the best way to negotiate?

Face to face of course. I’ve seen too many people trade comments for comments over weeks and weeks, and getting nowhere fast. The key is to first go through the agreement and note any comments or issues in a clear and systematic table format. Then organise a time when you can go through the list and discuss each point prior to sending the list through, even send it through so that both parties have it in front of them for reference.

Purely sending a list of issues through to the other party without discussion is open to interpretation by the other party, and it’s difficult to convey the reasons why an issue exists, and what your preferred outcome might be. Plus the negotiation of a single clause may involve three or four passes prior to being agreed. On the phone or face to face you can do this very quickly, whereas in writing it can literally take weeks going back and forth.

I know it is really very tempting to just get the issues down and be done with it, but it’s really the coward’s way out. In the interest of getting a better mutually beneficial result, and faster, talk it through.

No Comments | Tags: Contract Management, contract lifecycle management

29 June 2009 - 16:26Contract Lifecycle Management in Resources Sector

The mining and resources sector has for some time enjoyed very favourable economic conditions. It is now more than ever, in these times of economic uncertainty that resources companies must extract the maximum value from existing and newly negotiated agreements.

In category sourcing, end-to-end contract management processes are critical in ensuring a consistency of approach and maximum contract compliance. Being able to continuously improve your sourcing processes depends on effectively tracking and measuring what you do now. Contract Management System support of these contract management processes provides pre-emptive alerts of commercially critical trigger points and milestones, and automation of processes, allowing contract managers to focus on relationships, instead of wading through spreadsheets.

Open Windows is currently implementing contracts-ENTERPRISE integrated with SAP in large resources companies and showing payback of investment in months.

Open Windows contracts-ENTERPRISE gives these customers end-to-end contract development and sourcing capability and validation and population of SAP master file and supplier data. The system also brings actual order and payment data back to your single point of contract truth from SAP, meaning you will finally have all the information you need at your fingertips.

Open Windows contracts-ENTERPRISE automates contract creation and negotiation, including electronic publishing and submission of tenders & quotations and evaluation of submissions, and carries all of the knowledge you build in the RFx process, through to the delivery phase to assist review and continuous improvement.

Operational compliance and governance of contracts means real time reporting is available on risks and contract commitments, slashing the time it takes to generate management reports.

No Comments | Tags: Contract Management, Contract Management Software, Contract Software, Open Windows, contract lifecycle management

12 May 2009 - 22:09Contract Management explained

Contracts today form the backbone of all business transactions and relationships. Even if poorly documented, agreements enforceable by law dictate the terms on which most business will be performed.

Contract Management is a term used to describe the processes we use and activities that we undertake in order to ensure that contracts are delivered the way they were intended.

If businesses find themselves non-compliant with contracted commitments the consequences can be catastrophic. Contract Management is about practical prevention of contract management problems, reducing the need to rely on the legal protection built into agreements.

Typically contracts require managing, because if they are not managed correctly, then contracts tend not to go according to plan; being they take longer than anticipated, or they cost more than they should, they are delivered incorrectly, or they end in litigation, and/or termination with various, usually negative consequences for all parties involved.

Poorly constructed or overly generic agreements that ineffectively specify buyer requirements and service levels leave an interpretive door open and require closer management through the delivery phase. Suppliers unable to accurately price these kinds of agreements, usually in the best of faith find themselves claiming variations when a buyer’s true requirements are unearthed during execution. Principals and superintendents must be realistic and fair in their determination and approval of variations in the best interest of all parties.

Contracts require people to work together in order to achieve mutually beneficial outcomes. Nobody sets out with the goal to fail, or not deliver, and like a garden, a little bit of nurturing will go a long way to achieving positive outcomes.

Contract Management Software is software that is used in supporting contract managers and contract management in general, and may be end-to-end or only support one piece of the contract lifecycle; tendering for example.

These days real contract management software supports the whole contract lifecycle end-to-end, from sourcing, through tender management, negotiation & award through governance and compliance of contract delivery, to review and renewal, automating  processes and facilitating real time contract intelligence.

No Comments | Tags: Contract Management, Contract Management Software, Contract Software, contract lifecycle management

27 April 2009 - 19:20Sarbanes-Oxley and Contract Management

I am asked quite often about Sarbanes-Oxley and how it relates to contract management, or how contract management helps organisations comply with the Act.

The Sarbanes-Oxley Act 2002 imposed new corporate governance and financial disclosure obligations on US public companies, the likes of which had not been seen in over 70 years. The aim of which was to strengthen corporate accounting controls and reform standards of public financial auditing and reporting in the wake of such financial disasters as Enron, WorldCom, and others.

Other reforms and accords such as Clerp 9 2004, governing Australian corporate law, and Basel II, Banking and Finance internationally, also govern and provide standards to help promote more effective risk mitigation and timely financial and risk disclosure.

Sarbanes-Oxley section 302 mandates that officers signing financial reports must be responsible for establishing and maintaining internal control structures and procedures for financial reporting.

Real contract management systems such as Open Windows Contracts provide effective transparency and visibility into financial commitments that organizations are often unable to achieve using financial and accounting systems. Public companies require control procedures to be established and continuously improved, over financial commitment handling and operational activity. Contract management systems with business process automation can ensure a corporate-wide consistency of risk identification and mitigation procedures that is easily and regularly auditable by signing officers responsible for Financial Reports.

Real contract management systems allow for greater controls to be put in place around:

  • highly sensitive sourcing and contract development processes,
  • contract award, negotiation and agreement creation,
  • relationship compliance and governance,
  • commitment management, risk identification and reporting.

The  formalization and standardization of such tasks helps organizations comply with their obligations under agreements and Acts such as Sarbanes-Oxley, dramatically lowering the cost of compliance, and the risk of litigation and officer penalties because of oversight or fraud.

Sarbanes-Oxley Section 409 relates to ‘Real Time Issuer Disclosures’ and required “urgent” public disclosure information on material changes in their financial condition or operations. Material information concerning the company and its consolidated subsidiaries must be made known to responsible officers by others within each entity. This means that disclosure controls and procedures must be put in place.

One of the key advantages of implementing a systems approach to contract management using software such as Open Windows Contracts, will be your ability to determine and make available information of a commercially critical nature before it impacts your business, and to allow disclosure in accordance with the Act.

Material changes in financial and operational conditions are required to be urgently disclosed to the public. These events can be identified earlier with systems in place for tracking and managing contracts, which are the instruments that provide the framework for all of your business transactions, and the part of your business most often neglected.

No Comments | Tags: Contract Management, Contract Management Software, Contract Software, Open Windows, contract lifecycle management, general forum

9 April 2009 - 9:48Inside Contract Management

The reactive nature of contract management, and organizations’ inability to put in place good systems to manage contracts means that you may currently be experiencing some or all of the following slices of contract pain.

  • An inability to invoice match commitments to items billed has a direct impact on the number of suppliers you are currently paying in error.
  • By not effectively managing your obligations and opportunities you may be failing to renew customer contracts and under billing for the services that you have provided.
  • If your contract management knowledge is sitting in your staff’s heads, it can easily walk out the door. If it’s sitting in systems it is retained and is transferrable between staff members.
  • You may be wasting money because you are unable to enforce compliance to negotiated terms and conditions in contracts. You must positively manage a contract to deliver its value.
  • You cannot possibly manage your contracting risk if you do not know what risks you face. Multiple decentralized systems give you no way to see a clear picture of organization wide risk and commitment reporting. Consistent policy use across the organization is thwarted by multiple disparate systems.
  • An inability to track and measure what you currently do means that you will be unable to show continuous improvement, because you have nothing ‘concrete’ to build on and no way to judge supplier effectiveness.
  • If you have no automation of processes then you will spend a major portion of your time reinventing the wheel instead of using experience and precedent to lead you into each new deal.
  • 10% of contracts are lost, never to be found. If you add the time spent looking to the time it takes you to find an agreement that you actually have, there are a lot of wasted hours that could be saved with a contract management system.
  • If you are not following automated processes for contract development and delivery then poorly negotiated contracts and non-compliance to committed terms and conditions can lead to costly litigation.
  • If you are unable to forecast renewal dates then you may be stuck in agreements that should already have been terminated. Contract management software systems can remind you as these dates approach, helping to prevent costly oversights and embarrassment.
  • Statistically it is proven that information double handling introduces data errors into your processes. Contract management software with business process workflow can route data through your entire organization with electronic approvals, maintaining the integrity of your data, and keeping everything all in one place.
  • Lost productivity caused by manual and paper-based contract filing systems and multiple disparate databases can be costing your organization big dollars.
  • Organizations that cannot communicate efficiently and track chronologies, contract correspondence and performance data will find themselves at a tremendous competitive disadvantage when it comes time to negotiate, because they have no records of anything that was said or done.
  • Inefficiencies across the contract lifecycle and the disconnect between departments means that money leaks out through bad management of contracts. Organizations must recognize the relationship between expenditure and profit.
  • If a contract is worth executing it is worth executing quickly. The longer we spend in the pre-contract phase, the longer we are missing out on the post execution benefits of the deal.

No Comments | Tags: Contract Management, Contract Management Software, Contract Software, contract lifecycle management

Next Page »