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One Place for all Types of Business Contracts across Enterprise

In today's Contract Management world Organizations are looking to have one system which can maintain contracts for both Buy side business and Sell side business, a single repository which meets all business and compliance requirements relevant to the Contract. So now the questions arises which CLM product does support such kind of an architecture which also integrates with other ERP applications, SAP CLM is one of the best breed CLM product which meets the slated requirements that organizations are looking for.


Like all major CLM products, SAP CLM's major focus is on buy side functionalities to have a streamlined contract creation, review, approval, and renewal processes, reducing the cycle time. But today many organizations are looking for having sell side contracts built in the CLM product to


1) Streamline contract creation, review, approval, and renewal processes, reducing total cycle time
2) Having one system for sales contract, eliminating redundant IT and administrative costs.
3) Having contract renewals so that the revenue is captured. Generate incremental revenue through sales of service plans or add-on products
4) Use standard templates which are designed by the business, enforcing higher levels of consistency and business governance through all levels of selling.


But the major challenge is having both these types of contracts built in one system. Here is my perspective of how this can be done be done in SAP CLM. In SAP CLM there is a concept called "context" which is used to segregate the master data and configuration within a single E-Sourcing instance.   There are three levels of contexts - System Context, Enterprise Context, and Company Context.  The majority of master data and resource localization related to sell-side contracts are managed at the Enterprise Context level.     Thus, if you would like to segregate master data (e.g. suppliers / customers / material masters) for Procurement and Sales organizations, you can define two separate enterprise contexts (one for Procurement and another for Sales) and configure resource localizations within each enterprise context.

This will allow having a completely segregated work area for each group within a single instance.  The following are two commonly used implementations of the contexts to manage procurement and sales contracts.
1) System Context:    Procurement and Sales share all the master data and clause / contract library content.   -->  Localize resources to a neutral terms   (e.g. Business Partners, Contract Managers, etc.) 
2) System Context with 2 Enterprise Contexts:   Procurement and Sales contracts are completely segregated.  -->  Localize resources within each enterprise context.   (Procurement Enterprise Context -->   Buyer, Suppliers, etc.)   (Sales Enterprise Context --> Sales rep, Customers, etc.)


My approach would be to go with the second option

Both the buy side and sell side processes are different as the departments are separated within the organizations and they utilize different systems to obtain the same outcome. So for both the departments to achieve common goal they need to have one system. But from the compliance perspective the challenge is to have Data Isolation so which data do we want to be segregated if we have to have one system for both buy side and sell side.


1) All the reports which brings Business intelligence that will provide management with the right operational and strategic data to make better decisions
2) Screen layout and workbench structure would be different
3) Email messages that are sent to the each business groups would be different
4) Treatment of business partners would be different
5) Agreement templates would be different to govern and manage adherence to approved standard terms and conditions.

But by providing one system the top executive level visibility into every contract can be enterprise-wide.

Comments

Thanks for the blog we have now used this tip of enterprise context for one of our customer.

Thanks and Regards
Manoj Surve

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