The Infosys global supply chain management blog enables leaner supply chains through process and IT related interventions. Discuss the latest trends and solutions across the supply chain management landscape.

« Digitization in Enterprise Asset Management | Main | Asset Management and Dynamic Work Plan-I »

Contract Assessment and its dependency on solution implementation !

The importance, awareness and complexity of streamlined contract management processes have been increased over the last few years. Many organizations have started moving to automate their contract management processes to streamline their intra organizational and vendor collaborations. Best-in-Class organizations are those who have established the "paperless contract" approach for managing procurement contracts.

Once an organization decides to implement contract management solution, the next step is to start with assessing leading market solutions and select the best one depending on its various parameters, features and capabilities of the solution. But how do you ensure whether the features you are going for will be really used or needed, to build in-house contract management system or whether contracting processes defined in the organization can be addressed by the selected solution, what could be the gaps, if any and what if solution cannot meet key requirements within contracting & procurement business processes???

During my consulting experience, I came across such situation where customer selected the solution upfront based on few parameters and later on realized the capabilities or limitations where the key requirements within organization were difficult to address within selected solution. Here we are not going to talk about the solution, instead we will focus on the key INTERMEDIATE step "Assessment" before selecting or implementing solution to address contracting business process and key requirements. Here Assessment refers to both As Is business process as well as existing sample contracts reviews.

Following could be typical activities of assessment phase:

    • Assess existing "As-Is" contract management process
    • Review subset of contracts for each unique type within the organization, as applicable
    • Identify business process gaps and suggest recommendations
    • Standardize the proposed "To-Be" process and get buy-in from business stakeholders
    • Define the metadata for the proposed contract management system
    • Identify criteria for categorizing  the legacy contracts and document categorization
    • Understand master data setup and system interface requirements
    • Develop strategy for Contract Conversion process and building contract management system

Once all above activities completed, you are already done with building skeleton of the actual contract management implementation. The most important part is documentation of business process and categorization of the contracts within organization. This will help you to design various metadata, contract templates you need to define and the standard clauses required within each template, which is the heart of any contract management tool. Now as you understood the business process, other high level requirements around contract authoring, approval workflows, contracts execution, obligation management and security access levels are documented, depending on how simple or complex these requirements are and whether proposed solution(s) can address all the key requirements as part of deliverables generated from assessment phase, it will ensure right selection of the technology solution and successful implementation of the contract management system.

Comments

Quality article with key guidelines to business looking for Contract Management Solution. Way to go Sir.

It will also be interesting to see if supplier collaboration can play a interesting role in enhancing the effectiveness of a CMS

How will you align selection of CMS tool available in market and alignment of business process. It will also be interesting to see how you align integrated business process to have a complete procurement process.

Great tips, selecting a contract management system can be a big challenge since there are so many touch points for the system.

Thanks for sharing such a valuable information which teaches complex areas(CMS) of SCM in a simple terms and make us concentrate only on those parameters which builds the entire module..Request you to share your insights on strategic sourcing and its current challenges.

A process Management is an resource group, it may be causes some small groups.

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Please key in the two words you see in the box to validate your identity as an authentic user and reduce spam.

Subscribe to this blog's feed

Follow us on

Blogger Profiles

Infosys on Twitter