Better Contract Governance Through Workflow · transformation efforts. Prior to Selectica, Bill...

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


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


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


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


“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


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.


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Better Contract Governance Through Workflow · transformation efforts. Prior to Selectica, Bill...

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