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Negotiating from a Position of Strength

Darrin Poole - noemail@clmmatrix.com — Fri, 24 Jun 2011 21:00:00 GMT

Download the full version of this article here: Negotiating from a Position of Strength

Whether you wear glasses, contacts or have normal eyesight, we can all agree that being able to see is one of our most valuable senses. Words related to vision also command a place in our vocabulary as a means to describe our actions.

There is hindsight, foresight, limited vision, tunnel vision, losing sight of a goal, and when we can’t see at all we might get blindsided. In the corporate world, business objectives are defined by vision statements and an innovative leader is often referred to as a visionary. The preponderance of these types of words in our lexicon highlights the significance we place on sight.

Visibility is a highly powerful tool in being able to see and perceive what’s ahead. The better we can see, the better our chances of success. This also applies to the world of contract management where a lack of visibility can seriously impair the negotiation process, squeeze profits and raise the risk of non-compliance. So why settle for 20/20 vision when an automated contract management system can give you the ability to see much further down the road.

The Path Ahead – How 20/10 Vision Can Help You

A person with 20/10 vision can see twice as far as one with normal eyesight. That’s a very useful skill to help clearly see the path ahead, especially for a corporation managing thousands of contracts with varying lifecycle stages. This visibility is crucial to avoid the renewal of contracts that should be renegotiated, effectively handle audits or milestone reviews to avoid penalties and cost overruns, and to keep your negotiating team ahead of the curve and on track.

Contract management is a complex process on many levels, especially considering the sheer volume of contracts a corporation must negotiate, execute, store and monitor. In many ways it is the core driver of the business engine when you consider that contracts set the parameters for every relationship a company forms.

If your negotiating team is behind schedule and under pressure, the risks are raised for the execution of a subpar contract that opens the door for disputes, litigation, or non-compliance issues. Using an automated contract system not only ensures the capability to see when contracts need attention but also provides you with real-time visibility – the ability to easily view any aspect of your contract portfolio at any moment in time.

The Forest for the Trees – Perception and Focus

The typical corporate contract negotiation requires the collaboration of a number of functional experts across the enterprise. Sales and procurement are focused on pricing, finance on compliance, legal on the potential risks while IT and operations concentrate on technical specifications. All are advising on some aspect of the negotiation and each brings their specific expertise to the table. The problem is that each stakeholder inherently has their own perception which is only a piece of the puzzle and this can contribute to an inability to see the forest for the trees.

If the negotiation team is not working as one to move the process forward, or team members are waiting on each other – time will be wasted and redundancy will occur. Redundancy in work is one of the biggest and most unnecessary drains on corporate resources and dollars. An automated contract management system can bring focus to the negotiation, and help team members streamline their efforts and easily work in sync to expedite the overall process.

With a contract management program, your experts are virtually plugged into one central repository that stores all contract information and allows them to effectively collaborate and see the whole picture. This connectivity and workflow transparency allows for speedier resolutions of any bottlenecks and ensures the negotiation does not languish. The system moderates the process and helps team members stay on track with automatic alerts and approval notices. In addition, with a program that operates on a well known platform such as Microsoft SharePoint, even team rookies are easily brought up to speed since the user interface is a familiar one.

The Whole Picture – Hindsight, Foresight and Insight

The backbone of a successful contract negotiation is solid business intelligence. If you are using a mediocre or even worse, a medieval manual contract management system, you are squandering valuable time and corporate resources. You are more than likely to be operating in the dark and employing a seat-of-the-pants method to keep up with your contractual obligations. Time is wasted on compiling research. Tracking down past history and notes can bog the team down in addition to costing money. Your negotiators also have less time to focus on negotiation strategies and goals which can lead to even more losses in the form of a less than optimal deal. This puts you at a serious disadvantage and exposes the organization to margin and revenue leakage on both the buy-side and sell-side of your operation.

Using technology, such as a rules-driven contract management program, can provide you with an array of information management tools that can help your team collect and easily harness the data they need to effectively manage the negotiation process. With a simple query of the central repository, users can quickly see the whole picture and examine the entire contract lifecycle history including all emails, non-negotiable items, points of contention, topics to avoid and performance of the last cycle.

Hindsight gained from reviewing the past helps clearly identify lessons learned and contributes to having the foresight to help you capture potential opportunities or avoid pitfalls in the future. This knowledge arms your negotiation team with the insight and information they need to develop solid strategies and tactics to secure the best agreement possible while cultivating client and vendor relationships.

The Results – Seeing the Difference

In a contract negotiation, there is your team and their team – the question is which team is going to lock in the most beneficial deal. The costs of revenue leakage, non-compliance penalties and margin erosion can quickly compound if contract negotiations are mismanaged.

Negotiating from a position of strength empowers your team to influence key expectations and convince the other side to see things differently. With the proper tools to manage the contract process, your negotiators will come to the table knowledgeable, prepared and confident. Every dollar saved or made when applied to thousands of contracts can significantly improve your company’s financial performance.

With today’s executives facing relentless pressure to boost profits, what is it worth to secure the results generated by the power of enhanced contract visibility? A contract management solution is transformational and you will see the difference contracting excellence can make as well as yield a three to ten-fold return on your investment. That’s a win-win deal.

24-Jun-11 4:00 PM

CLM Benefits for Pharmaceutical Companies

Darrin Poole - noemail@clmmatrix.com — Fri, 24 Jun 2011 15:00:00 GMT

Automated Contract Management Provides Substantial Benefits to Nektar Therapeutics

CLM Matrix system exploits Microsoft SharePoint platform.

By: Rebecca Cazares, Nektar Therapeutics

This article was originally published in Pharmaceutical Commerce magazine:

Rebecca Cazares is Associate Director, Contracts Management, at Nektar Therapeutics (San Francisco; www.nektar.com), a clinical-stage biopharmaceutical company developing a pipeline of drug candidates that utilize its PEGylation and polymer conjugate technology platforms. Its product pipeline consists of drug candidates across a number of therapeutic areas, including oncology, pain, anti-infectives, anti-viral and immunology.

24-Jun-11 10:00 AM

Stuck in Traffic? Take the Tollway.

Darrin Poole - noemail@clmmatrix.com — Tue, 10 May 2011 22:00:00 GMT

Download the full version of this article here: Stuck in Traffic? Take the Tollway.

Contract workflow travels through an organization’s system much like cars make their way around a city.

If your contracts are stuck on the freeway in five o’clock traffic, stopped at a red light, or lost on a backstreet, you are wasting valuable time and using extra gas. That costs money. So why let your contracts meander about or get mired in gridlock when they can take the tollway?

Tollways, composed of a series of passenger lanes and toll booths, can be considered a contained system with a set of rules that ensure streamlined travel. Vehicles approaching a toll booth are routed into lanes depending on what category they fall into. Their speed of passage and the amount of service required are based on whether they have an EZ Pass, the exact change, or need to stop for full service.

In the contract management world, businesses also need rules to categorize requests and determine the best route for their transactional traffic. Corporations with automated contract lifecycle management systems are the ones that will be the most efficient, competitive and profitable.

80-20 Rule – The Value of Segmentation

The contract lifecycle begins with a request. When a request is received from a customer or vendor, what parameters best determine the type of negotiation, appropriation of human resources, or other activities that are needed to process the ensuing contract?

As many know, the 80-20 rule in business states that approximately 80% of a company’s revenue comes from 20% of its customers. That means those customers who fall in the 20% category are highly prized revenue generators and warrant special treatment. The rule is based on the discovery of Italian economist Vilfredo Pareto who, in 1906, found that 80% of the wealth in Italy was owned by 20% of the population. His observation, now commonly known as the 80-20 rule or Pareto’s Law may be applied to many situations. This is not a ground breaking concept by any means, but what happens when this tried and true principle is applied to contract management?

The business model for an 80-20 contract lifecycle management system involves segmenting or categorizing your contracts based on the value of the transaction. Your primary resource allocation should be focused on the 20% of your contracts that are worth the most to the bottom line. A transaction’s value may be defined either in terms of a dollar amount or the projected value of a customer or vendor relationship. For a highly valued customer or a prized multi-million dollar contract, there is no doubt that any company would gladly invest in deploying a sales team or bringing in legal counsel to negotiate the deal. However, transactions with a smaller value need to be executed in a low cost manner that uses minimal resources or there will be losses in productivity and profitability.

Right out of the gate, companies need the capability to easily identify where contracts fall along the value spectrum. An automated, rules-driven contract management system generates a highly efficient process where potential contracts are appropriately categorized during the request phase and seamlessly routed based on a set of pre-established criteria.

Go, Go, Go – EZ Pass

EZ Pass is the fast lane where vehicles with a sticker on their windshield zip right through the tollbooth. Any contract that is simple, easy and straightforward would be routed into this lane. Your company certainly does not want an attorney who is getting paid $300 an hour to review a $50,000 standard contract. Instead, greater efficiency is achieved by having the legal team create a standard template with the appropriate clauses and language for a transaction that meets this type of criteria. Any contract that falls within the predetermined parameters would be automatically executed and processed using minimal resources. Volume centric contracts with large transaction numbers but low dollar per transaction value are what a company really wants to segment into this fast lane.

A Little More Time – Exact Change

Drivers who pull into the exact change lane must stop and put in their toll while they wait for the gate to go up. The primary point being that the process takes a little more time. Contracts that are somewhat more complex, like a higher dollar volume transaction or one that may require some sort of non-standard terms and conditions would fall into this category. In this case, an automated contract lifecycle management system provides a template that can be easily modified. With a simple click, the sales team can easily select and insert the appropriate clause from a list of non-standard items that legal has drafted and pre-approved. Sales personnel can indeed make an “exact change” in the contract language with little time wasted before the gate is raised and the contract zooms on to the next destination. The legalities are managed and the sales cycle is shortened which not only boosts productivity but also improves the bottom line.

Need Some Help – Full Service

Drivers who need a receipt or change at the toll station have to stop for a little extra service. In our automated contract model, this category is reserved for the most complex situations or the most valuable customers and transactions. Perhaps the contract is being executed on third party paper and the legal team may need to negotiate specific language and terms. Or it could be a high dollar transaction, that warrants unique terms with iterative back-and-forth redline negotiations. In this lane, you are allocating your more highly paid human resources on your higher valued, more complex agreements.

Who Benefits from the Model?

Businesses that need to respond in different ways to a range of diversified market segments stand to greatly benefit from automating their contract system to categorize requests based on value. A prime example is a high tech software or hardware manufacturer that sells to thousands of consumers in addition to small businesses and large corporations. A rules-driven approach allows such companies to set the parameters that will automatically segment contracts at the point of request to ensure their contracting resources are proportionately allocated.

The model also applies to the financial service industry where a company may cater to a spectrum of clients ranging from small investors to larger institutions. These industries need an automated contract lifecycle management system in order to be effective in a high volume arena as well as take care of high dollar clients that require more complex contracts. Profit margins are protected and the result is an efficient process that deploys human resources such as sales, legal or finance only when specific preset criteria are met and conditions warrant

The Model in Action – Health Insurance Industry

In 2013, the recently passed healthcare legislation will flood the insurance market with approximately 30 million new policy holders and force dramatic changes on the way the industry conducts business. Underwriters and insurance staff will no longer have the time or luxury of the using the normal labor intense process to review a policy request. The need to adapt to legislative changes will force a new business model on the industry and companies will have to find a lower cost method of qualifying and provisioning customers.

Companies will have to offer these policies at a price point that allows them to effectively compete for that business and make insurance for the masses more affordable. They must capture the request, provide a quote, qualify the policy holder and convert the quote into a policy in a very cost effective manner.

In the tollway paradigm, the consumer that requires a lower cost policy would be routed to the EZ pass lane. They will be able to make an online purchase of a no frills “policy in the box” at a set price point. Prospects segmented to the next lane would make an online request but meet such predetermined criteria that now the company would have an inside sales person speak to them.

In the full service lane, a client such as a small business would be considered a higher value transaction that merits additional attention.

The bottom line is: to profitably serve this range of customers, it will be necessary to implement some form of rules-driven segmentation model that automatically categorizes and routes requests. With the enactment of the new legislation in the coming years, the health insurance industry will certainly be adopting this model.

Life in the Fast Lane

Today’s world is changing at a highly accelerated pace. One only need look at the phenomenon of social media to see how a technologically-based concept can have a rapid and unprecedented impact. The deployment of high tech solutions such as those applied to the contract process are a must if companies are to successfully adapt to evolving market conditions. Using an archaic contract management system is like driving on a congested old highway that cannot handle the increased volume of traffic that comes with growth. The result is damage to productivity and the bottom line.

When you view a portfolio of current and prospective clients, what are the criteria that define the threshold of how to engage with them? The more labor intensive the actions are, the more costly the process is. The dynamic exchange initiated in the request process can be effectively managed by a rules-driven contract engine so both high volume and high dollar transactional needs are easily served without hurting profit margins. Just like an efficiently run tollway, an automated contract lifecycle management system provides the infrastructure that will segment your traffic, streamline your workflow and allow you to take the fast lane to success.

10-May-11 5:00 PM

Contract Lifecycle Management - Build vs. Buy

Tim Sparks - noemail@clmmatrix.com — Thu, 24 Mar 2011 14:00:00 GMT

Download the full version of this article here: Contract Lifecycle Management - Build vs. Buy.

Over the past 10 years we have had the opportunity to implement approximately 100 contract lifecycle management (CLM) projects. All were SharePoint-based solutions for both buy-side and sell-side applications at companies big and small, public and private, and in over 15 different industry verticals. Through our experiences we have observed that the most successful CLM projects have several common attributes including:

The organization’s contract process is fully understood and well documented.
The organization has selected a specific area for improvement to deliver quick wins with meaningful results.
The organization has cross-functional support for the CLM initiative.

Deploying a contract lifecycle management solution is a project that for many companies has a return on-investment measured in weeks versus years. As the old adage says, “anything worth doing, is worth doing well” – the first time. So why not give yourself the benefit of learning from what others have done well and avoid the traps and pitfalls that plague unsuccessful projects.

Recently, we have observed an interesting trend developing in the CLM market. Now, fully one half of our inquiries share one of two experiences:

INTERNAL BUILD - they have tried and failed to build a contract management system themselves, or
GO LIGHT - they licensed an entry level product and either have outgrown the product or discovered that its functionality falls short of what was really needed.

Feedback from organizations from both categories is consistent. They express frustration that they have wasted considerable time and money with little to show for their investment and they have now renewed their search for a technology solution to help them better manage contract performance. Unfortunately, these organization’s experiences are both predictable and avoidable. Let’s explore both situations using real-life examples and then examine how these situations can easily be avoided.

Internal Build

Situation

Fourteen months ago we had an inquiry from an organization that was beginning a strategic CLM initiative. They assigned internal resources to work part time to define the requirements for their targeted contract process. Their primary high level objectives were to create an online web portal for self-service contract initiation, route the contract for approval electronically while enforcing business rules and policies and create real-time visibility into the status of each contract. Initial vendor reviews were performed, demos were given, questions submitted, proposals requested and then a final vendor was selected.

After some discussion, the organization decided that building a CLM solution internally would be slightly more cost effective than licensing one off-the-shelf. After all, how hard could it be? This company chose to build their own system using 3 technologies: Microsoft SharePoint Server, InfoPath, and an off-the-shelf workflow tool. The IT team proposed that they could build an equivalent CLM tool in 3 months or less.

The team proceeded to pursue this strategy and after more than a year, while spending 2-3X more money than projected, they rolled out their internally developed CLM solution to their internal customer. End users unanimously and immediately rejected the system stating it was not user friendly and did not address their needs. The rest of the story involves several employees forced to polish resumes, unhappy internal customers, significant political capital being exhausted and a renewed search for an off-the-shelf CLM solution.

Debrief

We have found organizations who think that they can build a CLM system themselves generally assume that they can build a CLM system for $85,000 to $150,000 with 2-3 developers in about 3-5 months. While these numbers might sound compelling to the organization, there are three questions that most of these organizations admit later that they failed to ask themselves:

Deep Technology Experience - Does the project team have the requisite solution development technology experience?
Track Record of Success - Does the project team have a history of successfully developing solutions on test, on budget and on time?
Deep Domain Experience - Does the project team have multiple iterations of contract lifecycle management solution development experience?

Unfortunately, most of these organizations have admitted later that they now realize their team was unqualified and their organization’s desire to “save” money clouded their ability to be intellectually honest about the probability of success. Incidentally, answering “No” to any one of the three questions above should be considered a warning sign that the odds of success are not in your favor.

Conclusion

Inexperience = Risk - It is possible to develop a workable CLM solution successfully. Unfortunately, based on feedback from organizations who have attempted to do so, we have found most are not staffed sufficiently with experienced resources and they tend to underestimate the complexity, risk and cost of taking on an internal CLM development project.
Parts ≠ Whole - Cobbling together (read as integrating) a collaboration product, a workflow product and a document assembly product is not the same thing as developing a CLM solution. Each of these products was designed to do certain things in general but nothing in particular. CLM solutions are designed to solve specific and unique CLM challenges faced by organizations.
Look In The Mirror, Again – Having the intellectual honesty to know what you know and know what you don’t know is important. Organizations must also have the humility to seek outside help when their expertise and/or capacity does not match their project requirements and objectives. Most organizations would never consider building their own word processor or spreadsheet program. Building your own CLM solution is more complex by an order of magnitude.

Go Light

Situation

Every week we have organizations who describe how they manage their contracts with spreadsheets and email. Some have recently moved on to an entry level CLM product that offers a static repository, simple reporting and status indicators. These customers usually ask detailed questions about specific pieces of functionality within our solution. The questions tend to include areas such as alerts, workflow, business rules, document assembly, and integration with legacy systems.

As a matter of practice for understanding their needs, we ask why these areas are of such importance. The responses, which were originally unexpected, have become routine as it has been repeated over and over. These organization thought they had made an informed vendor selection decision to license a simple CLM product only to discover the product’s limited capabilities do not allow it to grow with their evolving needs. Unfortunately for these organizations, the product may be good but it was not a good fit for their growing needs.

Now, after a short period of time they are back in the market exploring alternative solutions.

Debrief

Our observation of what these organizations have in common is that they initially failed to fully examine and define their requirements prior to selecting a CLM system. Without a full understanding of the business problem they are trying to solve, it is difficult for these organizations to match functionality with requirements. Consequently, any solution appears to work. Having failed to understand their own requirements, these organizations also find themselves in the same predicament of having invested considerable money and time with little if any value created for the organization.

Conclusion

Define Requirements First - Among the first steps with any project is to define the business problem, objectives and key drivers so that project requirements can be developed. Only then will an organization have the information needed to begin the search for a solution that fully accomplishes solving its business needs.
Gather Information – Gather data on the market, vendors, products, features/functionality, implementation experience, etc. from credible sources. Information quality always trumps quantity. Domain experts can be spotted easily as they will first seek to understand your organization’s unique requirements. Websites and customer references are good sources of information. Be wary of information provided by those using negative selling techniques, claiming to be a domain expert, or have a conflict of interest with the information they provide. Remember making an informed decision based on accurate information is imperative.
Cheap Is Not Always Cheaper – Contracts play a strategic role in an organization. Companies wanting a “quick and easy” win may grasp at something unsuitable for their real needs. Buying the least expensive product is seldom the low cost alternative when considering the full lifecycle cost and retooling required if the original product cannot grow with the needs of your organization.

Contract Lifecycle Management, now more than ever, is positioned to benefit from 3 macro trends. CLM technology has just recently caught up with the need, organizations are realizing there is a better way, and the need for compliance and governance has never been greater. Through preparation and proper due diligence your organization can realize the benefits of applying technology to your contract lifecycle process.

24-Mar-11 9:00 AM

SharePoint & Office 2010 - Business Productivity at It's Best

Darrin Poole - noemail@clmmatrix.com — Tue, 15 Mar 2011 16:00:00 GMT

Microsoft Office has always been about automating tasks and providing people with choices for how they get things done at work, at school, and at home. When Microsoft Office products were first introduced, they helped people move beyond manual processes and tools to automated processes on computers.

Over time, Microsoft Office has evolved and is now the primary vehicle by which people experience Business Productivity Infrastructure capabilities, such as collaboration and content management. Microsoft Office helps enhance business productivity by offering rich server capabilities that are tightly integrated into its user experience. Office 2010 and SharePoint 2010 are designed to provide people with a set of capabilities that span across Client and Server, often without the users even realizing that both are involved.

Many analysts support the notion of an integrated productivity environment for information workers. Gartner Group‟s “Smart Enterprise,”1 Forrester‟s “Information Workplace,”2 and Yankee Group‟s “Extended Enterprise”3 frameworks all combine these capabilities to create the next-generation workplace for information workers. The introduction of Microsoft Office 2007 was the first time a solution of client, server, and service products, with tight design interoperability, could deliver the functionality that would have previously required anywhere from six to ten “best-in-class” products for a full BPI platform.

The 2010 release of these products takes this interoperability to the next level by providing more flexibility in delivery and new capabilities to help save the business time and money.

The focus of this paper is to provide an overview of the specific capabilities enabled through Microsoft Office and SharePoint working together as key components of the BPI stack in the 2010 release.

To continue reading the whitepaper in it's entirety, click here.

15-Mar-11 11:00 AM

Getting Legal, Finance and Sales to Play in the Same Sandbox

Darrin Poole - noemail@clmmatrix.com — Sun, 20 Feb 2011 20:00:00 GMT

Download the full version of this article here: How to get Legal, Finance and Sales to Play in the Same Sandbox.

Back in the day, the sandbox was a place where you could play and have fun. But we can all remember occasions when not everyone played nicely together. After all, there were no rules and as such our encounters may have included a little sand throwing, toy taking or territorial shoving. No great harm done. But in the business world, sandbox skirmishes can result in damage to an otherwise productive environment, be immensely costly in terms of profitability and leave you exposed to risk.

The failure to efficiently engage the workforce across the entire enterprise is one of the root causes of poor corporate performance. Instead of having a well defined organizational order, many companies find themselves functioning more in a state of organized chaos. Different business units, often located in different places, tend to operate autonomously and thus workflow between departments does not inherently flow smoothly.

Consider the contract management process. While legal, finance and sales may functionally play in the same sandbox, they are not involved in similar work nor do they share the same agendas or timelines. Each has their own business language and traits that make them experts in their respective fields. They may not intend to step on each other’s turf, but often lack the infrastructure, processes and tools that would foster collaboration. An automated solution can be a game changer by establishing common rules of engagement and profoundly impacting the way these cross-functional departments interact when creating contractual commitments.

There's a New Way to Play

No doubt, one of the most common sources of friction in companies can be found in the relationship between legal and sales. The frontline warrior in sales has a sense of urgency in closing the deal even if it means some last minute negotiations that change the standard contract language. They need the approval from legal now, and are certainly not focused on how their changes could expose the company to risk. That’s not their job. On the other hand, for legal, the company’s chief protector in charge of mitigating risk, deliberation requires time, and approval is not to be demanded at the eleventh hour.

A contract lifecycle management system minimizes this source of conflict by giving sales the power to build their own contract within pre-defined parameters. Specific terms, conditions and clauses can be drawn from a central library of executable templates with pre-approved legal language. Legal is not interrupted with last minute requests and can rest assured knowing they have pre-set the rules based on the company’s tolerance to risk.

If in the special case that a non-standard item needs to be evaluated, the contract system is self-regulating and automatically moves the request through your organization to seek, secure and monitor the approval process. Accountability is built in and a timely approval is ensured. Your business wins as you can be certain that a rogue sales agreement has not let any unidentified risk-laden contracts slip through the system, and the bottom line gets a boost since the sale is closed in the fastest timeframe possible.

In another part of the sandbox, finance executives are focused on planning, strategizing, tracking and ensuring regulatory compliance. Cash leakage from sales and supply contracts, cycle times of accounts payable and receivable, and resources wasted from duplication of work all can have a huge impact on the bottom line. The ever changing and often burdensome regulatory environment is always a challenge. With an automated contract lifecycle management system, finance executives can effectively and easily pinpoint costly leakages and have their finger on the pulse of the entire contract process from initiation to execution to expiration. Risks are under control, compliance is met and cash management is optimized.

The Power of One

The cornerstone of an exceptional contract lifecycle management system is the ability to leverage the power of one - one platform that connects the players across the enterprise and one central repository for storing and managing all contractual information. Best-in-class CLM systems create a virtual sandbox with defined borders, boundaries and rules of engagement that facilitate the timely sharing of information and seamless execution between departments.

The result is efficiency in carrying out individual and group tasks, even if your business units are spread out across the globe. Each department - legal, sales and finance - has the capability to have both the process control and access to the contract information they need in real time. Needless duplication of effort is eliminated, and your business can produce more with less as the workflow is automated and contracts move efficiently through the system.

Response time for implementing a contract is vastly improved because there is no waiting

for copies or information on contract status. Reports and tasks that used to take weeks to accomplish can literally be completed in hours. A centralized system also gives you the ability to be nimble and readily adapt to regulatory changes or respond to unexpected events outside the normal course of business.

Free To Do Business

Recent years have ushered in a sea of change in the business environment. Economic issues, regulatory uncertainty and even crisis situations have forced businesses to adjust to a different reality. More than ever before, performance and productivity count if you want to be competitive and gain an edge. Effective collaboration is no longer an option, but a necessity.

A contract lifecycle management system creates a new paradigm, a sandbox where playing well together is built into the core of the organizational structure and culture. Workflow between units is streamlined and relationships between departments and external partners can thrive. With your processes in place for maximum profitability, your risks under control and the teams within your enterprise working as one cohesive unit, valuable resources are freed up to deploy on important priorities like growing your business. The power is back in your hands. Where you go from there is your choice.

20-Feb-11 2:00 PM

How to Cost Justify a Contract Lifecycle Management Solution

Darrin Poole - noemail@clmmatrix.com — Wed, 26 Jan 2011 16:00:00 GMT

Download the full version of this article here: How to Cost Justify a Contract Lifecycle Management Solution.

We’ve all heard the ancient Chinese toast, “May you live in interesting times,” and few of us would doubt we’re living in them now. In this economic climate, it’s hard to justify large-dollar expenditures for business process solutions; but harder still to imagine continuing disorganized, outmoded “business as usual” procedures.

The desire for a full-bodied contract lifecycle management (CLM) system is usually triggered by an unpleasant (often recurring) event in the life of a company’s contracts: discovering (in after-action documents) that you left significant money on the table through overlooked incentives; or incurring a sizeable penalty for late delivery or non-compliance. Pain is often a driving factor in the search for a better way.

If you’re looking to achieve greater efficiency through contract workflow automation, this article will help you connect the dots in a way that wins over target stakeholders.

Anxious Diagnose and Describe the Problem with Your Existing System (or Lack Therof)

Throughout the diagnostic and exploration process, take the time to document your findings: for your own stakeholders and for potential vendors or consultants. Others will have their own way of approaching a potential new engagement and in formulating their recommendations – but your documented research may still save steps down the line.

Before exploring solutions to a process, get a really good feel for the present one. Sketch out the complete lifecycle or workflow of a typical contract – from beginning to end. How many people handle the document and when, in what order? Where is it reposed? Is it accessible throughout the process, or are multiple copies in circulation? Identify as many specific steps and players as you can in terms of sequencing of events.

Identify all the known difficulties with the process over the last year:

Where do the bottlenecks happen, and do they happen rarely or with some regularity?
How often does the company incur penalties for late delivery or other non-compliance
issues?
Are incentives or bonuses in multiple contracts being offset or contradicted by other clauses elsewhere in those documents?
What other additional opportunities might your organization be missing through neglect or mismanagement?
Are redundant systems in use, for filing and managing your present contract volume?
Other measurable or describable impacts you’ve observed within the contracting lifecycle.

Based on a better understanding of the present system and its shortcomings, now build a wish list of all the things you’d like to see in a CLM solution. You may not get all of them in any one product, but try to make your list as exhaustive as possible and prioritize them in order of greater to lesser importance. Such items as these:

Seamless interface with existing Microsoft/Windows applications
Central repository for all contract information
“Need to know” access coupled with robust security protocols
Turnkey report generation, easy to customize
Automated alerts and email notifications
Robust search capability
Clause-based versus template-based architecture
Ability to handle buy-side contracts, sell-side, or both, within one central contract repository.

Pause also to assess the political environment – where can you expect resistance or pushback in the promotion of a new CLM solution? Who (which people or departments) will be your natural allies in making a change and how can you leverage their influence? Who is most likely to feel threatened or anxious and how might those concerns be resolved or minimized?

Identify Potential Solutions and How They Fit with Your IT Architecture

Now you’re ready to take a moment to consider how a potential solution would fit within your IT application portfolio. Do a little “quick and dirty” research with one or two trusted allies in your IT Department to determine what makes the most sense.

Do you have an existing Enterprise Content/Document Management solution that you need to integrate with? If so, conduct a quick Google search on some of the companies or software products you’ve heard about that integrate with that environment.
Do you have an existing CRM or ERP application that has contract management functionality you’ve already licensed or could purchase? If so, how well does the solution integrate with Microsoft Office tools you currently use for document creation and email notifications? And, how easily and dynamically can you modify the application as your business rules change?
What is your IT organization’s position on buying vs. building “departmental” application solutions? What’s your sense of urgency for getting something now (buy) vs. later (build)?

Put Legs Under Your Concept

Once you know more about the various CLM solutions and how they fit within your IT architecture, it’s time to synthesize your best recommendation for change. Here’s where you look for ways to quantify the costs and benefits, to help your company move from the “current state” of contract management within your company to the “future state” you hope to bring about.

To make an effective business case, be sure to consider hard costs and benefits (the things

that can be quantified) as well as soft costs and benefits (intangible items that can make or

break a project). Some of this information you can gather in-house; the rest from interviews with prospective vendors and others within your organization. How vendors answer your questions will be some indicator of how well they understand your business and the statistical benefits they’re able to document.

Hard cost (pricing) data, which will vary by vendor or solution, might include items such as:

Hardware
Software
Training (for users and for internal IT support staff)
On- and Off-site support services
Labor costs (contract or salaried with benefits)

In weighing hard (quantifiable) benefits of CLM, look at these key areas of potential “pain relief.”

Improved productivity and efficiencies. With a robust CLM solution, companies can see up to a 50% reduction in the front-end time associated with negotiating and approving contracts. They can typically pare 2 or more days from the typical 60 days sales outstanding. SEC filing times can be reduced from as much as 10 days to as little as 3-5 days per filing.
Risk and penalty reductions. Systematic monitoring of contract terms and conditions allows operators to recover 5-10% of a contract’s value in leakage: costs associated with missed deadlines, regulatory penalties, other failures of oversight.
Economies of scale. In a manual contracting environment, companies have to hire 1 more person to get 1 more unit of capacity. Streamlining and standardizing the contract workflow allows companies to expand their business exponentially.

Potential soft benefits include:

More transparency in the workflow; and speedier correction of any bottlenecks
Implementation of best practices which can enhance your company’s competitive position and its reputation within your industry
More effective handling of contract milestones, yielding an increase of contract renewals
Potential entree to new clients or customers as a result of your enhanced CLM capabilities

Invite the Vendor for a Visit

By now you should have a fairly clear picture what you’re looking for in a CLM solution, and which potential vendors or solution providers are the best fit for your company’s needs. Invite them (one by one) for a conversation. A good sales representative will ask questions about your process and workflow so the demo addresses the items most important to you.

Have your questions written down in advance, based on your research and cost/benefit calculations. Share any gaps with the vendor and see what help they can give you in filling in the blanks.

Having listened to concerns within your organization, ask potential vendors about a variety of

“best case” and “worst case scenarios.” The best solution providers know how to address the issues and challenges inherent in adopting a new solution.

The CLM Matrix Solution

As this diagnostic process shows, the best process outcome is to find a way to do more with less. CLM Matrix believes that companies can do MORE by spending LESS on inefficient, convoluted or duplicative processes. But before any solution can be implemented, be prepared to document the business case benefits that justify the overall project investment in a CLM software solution. And as we continue to live in these very interesting times, such solutions will make your company less susceptible to unpleasant contact lifecycle events in 2011 and beyond.

26-Jan-11 10:00 AM

Healthcare Reform: Dramatic Changes to Hospital Contract Administration

Darrin Poole - noemail@clmmatrix.com — Sat, 27 Nov 2010 16:00:00 GMT

Download the full version of this article here: Healthcare Reform - Hospital Contract Administration.

The ultimate challenge has arrived for hospital administrators with the epic legislation that will substantially alter the nation’s health care system. News headlines from March announced that the extended debates had given way to Congressional action. The massive overhaul is beginning to reshape America’s approach to insurance coverage and health care delivery.

Two bills – the Reconciliation Act of 2010 and the Patient Protection and Affordable Care Act – became law. They were heralded in on September 23, along with the consumer-oriented Patient Bill of Rights. It adds up to more than 2,000 pages of legislation that alters the cornerstones of health treatment and coverage. For hospitals and their administrators, that means dramatic changes in contracts with insurers, doctors and the federal government.

The executive director of the Kansas Hospital Association told of the uncertainties in a media interview. He summed up the sentiments of administrators in a single word: “anxious.”

The plan is anticipated to add health insurance coverage for an estimated 31 million more residents under the age of 65. However, the opposition has hardly been hushed. Legal challenges have been filed by officials in 21 states, and the outcome of the November elections could shift the balance of Congressional votes on crucial funding for the plans.

Those continuing uncertainties are further complicated by the varying dates for the phase-in of the plans themselves. The September enactment does not apply to employer-based coverage in existence before then. Those plans will not have to comply until January 1, 2014, unless they change certain terms of their policies, such as increasing co-pays and deductibles of employees. The Mercer national consulting firm surveyed 1,100 employers and found that slightly more than half are likely to retain their current plans in 2011.

The Patient Bill of Rights becomes effective at the start of the new plan year. For many people with coverage, that will begin on January 1, 2011.

Hospital administrators will need to renegotiate or amend existing contracts for the terms that began in September, as well as for several provisions that take effect in future plan years. For some, this will be a fairly straight-forward process. For others, particular those who do not have an automated contract system, it will be a nightmare.

Anxious to Attentive

Children’s coverage is one of the key areas of transition. Those under 19 years old can no longer be excluded for pre-existing conditions. Parents and guardians will also be able to use their health plans to get insurance for children or other dependents up to 26 years of age. Insurers also cannot require patients to have prior authorization before they seek care from pediatricians or OB/GYNs.

More changes target those of all ages with insurance coverage.

Cost-sharing, such as co-payments or deductibles, will be forbidden for routine preventative care. There will no longer be annual or lifetime caps on coverage payments for essential benefits. A new high-risk pool program may provide coverage for consumers with health issues who have been uninsured for six months or more.

Another standard of some current insurance plans – higher co-payments for out-of-network Emergency Room services – will be banned under the new regulations. Illnesses or unintentional errors on paperwork are no longer valid reasons for retroactive cancellations of coverage. In fact, policies can’t be cancelled unless those insured are first given the opportunity for an independent appeal. During that appeal process, insurers must continue to honor claims for treatment until the appeals are resolved.

Hospitals themselves may be subject to fines or barred from using collection agencies if they do not advise patients of free or discounted care options. More penalties are possible if Medicare patients are re-admitted for care that could have been prevented or avoided in previous admissions.

Eventually, medical institutions can expect economic benefits from the increase in patients. However, short-term fiscal health and survival will be difficult because hospitals themselves will be absorbing many basic costs in the transition. Administrators already know the acute problems associated with serving patients who have medical plan coverage that doesn’t fully compensate for the costs of care. Having more of these patients will further squeeze operating margins.

Over the long term, the federal government believes that the costs from millions of newly insured Americans can be covered through increased efficiencies by hospitals. That will increase the challenges for administrators already confronting a patchwork maze of public and private insurers, and complicated mechanisms for paying the costs of teaching and conducting patient care research.

To stay solvent, hospitals will need to explore new methods to cut even more costs and maximize efficiency. Emerging solutions that enable greater collaboration among employees, suppliers, partners and the patient community offer such opportunities to achieve greater efficiencies. This can be particularly true in establishing an effective contract lifecycle management system that provides the transparency and reliable data to make the best decisions when negotiating new or renegotiating existing agreements with suppliers that drive the majority of a hospital’s operating expenses.

Attentive to Efficient

Workflow-driven contract lifecycle management systems can provide what is typically missing in most public and private hospitals – an accurate view of the big picture in end-to-end processes involving contractual dealings. That is essential in preserving and strengthening fragile operating margins. Managing contracts on a daily basis can mean everything in controlling expenses in all working relationships. That goes for doctors, medical schools, imaging systems, pharmaceuticals, medical supplies and equipment, as well as food services, maintenance and other support functions.

Establishing automated alert notifications for contract expirations and renewals can enable administrators to avoid being locked into unfavorable terms and conditions and higher prices that can cripple the best efforts at improving operating efficiency during this crucial time.

A rules-based contract system also reduces the financial and legal exposure associated with the newly established regulatory policies. Administrators will be able to ensure compliance with policies to advise patients of free or discounted care options by automating these rules into the workflow process for admitting patients and establishing coverage levels. Billing and administration already account for one-quarter of the entire budgets for typical U.S. hospitals. Thomson Reuters released a report last year that the average American physician needs eight hours every week to deal with the demands of paperwork. That is in addition to the 1.66 clerical workers now required per doctor.

Administrators can reduce those labor costs and simplify complex issues through an automated process driven by defined policies and procedures. Contact management systems that capture key contract metadata offer a single, searchable, management contract repository to store, monitor, and manage legal agreements. Solutions that provide enterprise-wide visibility into the entire history of a contract can make all the difference in enabling administrators to negotiate from a position of strength and set sustainable rates.

These systems can be invaluable in providing hospitals with intelligence to forge favorable agreements and ensure solid compliance with the resulting terms. Audits and related performance monitoring can mean that hospitals get the most out of their contractual relationships.

The massive changes in America’s approach to health care are arriving. Hospital Administrators should investigate collaborative workflow contract management solutions to better prepare for the vast challenges and uncertainties ahead.

About CLM Matrix

CLM Matrix is the market leader in Contract Lifecycle Management (CLM) software solutions on Microsoft Office and SharePoint technology platforms. Our solution extends the functionality of traditional contract management software by adding features such as:

Rule-based document creation
Clause libraries
Policy-based approval workflow
Automated reminders and alerts
Real time user defined reporting
Integration with legacy enterprise software
Contract compliance tracking
Multi-language capabilities
Support for global environments
Fully configurable to specific process and document types without code (wizard driven)

To learn more about CLM Matrix and our award winning software solutions, please visit clmmatrix.com or contact us directly at 1.800.961.6534.

27-Nov-10 10:00 AM

Contract Management Implications for Oil and Gas Companies

PennWell Corporation - noemail@clmmatrix.com — Sun, 26 Sep 2010 19:15:00 GMT

MACONDO - Things will never be the same again.

Six months since an explosion ripped apart the Transocean Deepwater Horizon rig in the Gulf of Mexico, and it seems the US and the world are still dealing with the repercussions – financial, legislatory, environmental, economic. Pipeline asked a random selection of commentators for their opinion of the current situation.

Alan Herbst of US-based strategic energy advisors, Utilis Advisiory Group, commented on the shifting face of energy companies, following the disaster: “In this environment, bigger will be better and I would expect to see consolidation amongst GoM players. There will be new Federal regulations enacted now that the MMS has been broken up. Corporate Governance should change. Energy firms will need to have sympathetic public figures, Board members who understand safety and increased use of "whistle blower" lines to change the operating culture to one where safety comes first.”

Mario Almonte, PR specialist and renowned political blogger for the Huffington Post said that for BP, the Gulf of Mexico disaster was not just a huge blow from a public relations perspective, but also from a financial one.

“Yet, none of these are insurmountable obstacles, and in several years BP should have regained its balance and re-emerged as strong as ever. The unfortunate truth of the PR nightmare for BP was that its CEO, Tony Hayward, continuously stumbled in responding to media queries - and therefore exacerbated a situation that already had Gulf Coast residents, and the country, raw with emotion.

“Ironically, in becoming the lightning rod for criticism of BP, Hayward also helped greatly contain public and media criticism - everyone was focused on Hayward, seeing him as the source of BP's problems - rather than blaming the entire company for its response and handling of the disaster. Now, with Hayward out of the public eye, the public and the media seem less motivated to go after the corporation, allowing BP to quickly begin rebuilding its brand and resuming its position in the industry.

“What is also helping BP regain its footing is the fact that, from an environmental perspective, the damage the spill did to the Gulf is inconclusive. For every scientist who calls it the biggest environmental disaster of our time, there is another, equally respectable scientist who says that most of the oil has evaporated, bacteria are eating what remains, and nature is returning to normal.

Click here to read and download the entire article.

26-Sep-10 2:15 PM

Contract Management Workflow - Let's Get Physical!

Edward Pecelli - noemail@clmmatrix.com — Mon, 23 Aug 2010 12:00:00 GMT

Download the full version of this article here: Contract Management Workflow.

Healthy organizations are not that different from healthy bodies. To become a top performer, you have to stay in physical form, and doing so requires work. You don’t become a marathon runner by sitting on the couch and thinking about getting in shape. Is your company operating at peak performance? Or are you falling behind deadlines and missing obligations with your vendors and customers?

Perhaps your business is in need of some strength training – tightening and enforcing policies to get more out of your operational processes. Or, maybe it could use some cardio work - trimming down and streamlining processes to ensure you’re spending an efficient amount of time and resources managing your contracts. Or, perhaps your business just needs some old-fashioned discipline for better managing your contractual obligations.

Many companies are now looking to improve their workflow processes to better manage their contracts. Why? Because contracts spell out your organization’s obligations - such as who is buying from you and who you're buying from, when and how to remit payments, and when the agreement is scheduled to expire or renew. More efficient contract lifecycle management begins with understanding the information required to execute and manage each contract and the related obligations.

Information: the building block for strong contracts

When it comes to gathering multi-departmental information and putting together a contract, the data must be solid and accurate. Any negotiated terms should be clearly stated with consensus agreement. The quality of your information serves as fuel to keep your contracts moving in the right direction.

When information that goes into your contracts is poorly constructed, outdated, or inaccurate, your business will find itself vulnerable to employee error, missed deadlines, poor customer service, and even financial loss or regulatory non-compliance.

Being able to manage obligations is the most important benefit of having accurate information in your contracts. Whether you're dealing with vendors or customers, having clear and direct access to terms and conditions helps organizations better understand their overall business risks and upside opportunities. Some key questions to consider are:

• What are the approved standard vs. non-standard contract terms?
• What are the business policies that drive what goes into a contract?
• What are the non-negotiable terms that we must protect?
• What information or language is needed to ensure regulatory compliance?

It is equally important to understand the order in which contractual commitments are established during the negotiation process. Most companies have both internal procedures and regulatory policies that they have to follow before finalizing binding commitments with suppliers, customers and partners. These procedures should be managed as a logically sequenced workflow with checks and balances to ensure that all policy requirements have been met.

While all of this sounds easy and straight-forward on the surface, the devil is in the details when it comes to modeling efficient workflow processes that effectively manage the creation, execution and monitoring of contractual agreements.

Strengthening your People's Performance with Good Processes

Having a well-defined workflow process to drive your contracting efforts provides greater visibility and transparency while protecting the interest of each negotiating party. Maintaining focus on the desired outcome allows each resource to execute the defined tasks in a collaborative environment.

A well diagrammed workflow process should document how each piece of the information flows through the organization. Formally documenting key business rules and policies that govern decision rights and approval authority help eliminate glitches and bottlenecks. Armed with a clear understanding of how information flows through their company, management can quickly address any slowdowns or inefficiencies. The organization becomes more nimble – and ultimately more profitable as result. This exercise clears communication lines between departments and answers questions such as:

• What is the information we need?
• Is that information getting to the correct people at the right time?
• Do we have the right people working on the right things at the right time?
• How can process improvements enable us to be more proactive (rather than

reactive) with our partners, vendors and clients?

Once accomplished, resources across an organization's operations, sales, legal and finance departments learn to collaborate better, reevaluating and improving how their business is done.

Improving your Contract Management Health with a Rules Engine

The newly defined workflow processes can then be automated using a policy-based rules engine that serves as a traffic cop for everything that flows through the contract management system. Specifically, the rules engine enables you to steer the contract process through your organization according to your specific business policies. It empowers end users and allows them to engage proactively when managing the iterative interactions involved in contract negotiations. A policy-based rules engine acts as a nucleus that makes sure all processes run smoothly, and that all parties involved with the contracting process work together.

Most companies who operate with manual contract management processes realize that they simply do not work – dates are missed, terms forgotten, and obligations fall through the cracks. A rules engine helps an organization focus on serving their customers and vendors needs rather than get caught up with time-consuming administrative tasks.

Automated contract management processes allow policies, procedures and rules to drive the workflow – freeing individuals to focus on more productive tasks.

Healthy contract lifecycle management execution equals a healthy company with expanding margins and a more productive workforce. With the right policies and processes in place, managing your workflow to create better contracts will improve your organization’s performance one contract at a time – and will better equip you to compete in the marathon of maintaining a successful business.

23-Aug-10 7:00 AM

Five Ways SharePoint Can Save You Money

Darrin Poole - noemail@clmmatrix.com — Mon, 09 Aug 2010 15:00:00 GMT

In today's uncertain economic climate, business decision makers are under more pressure than ever before to deliver value. Organizations everywhere are tightening their belts and aiming for slower spend in all areas of the business. At the same time, these organizations cannot afford to compromise productivity and efficiency. History has shown that organizations that continue to invest smartly in challenging times often emerge as the dominant player coming out of recessions.

How do you deliver productivity and efficiency? When your work involves managing information, you probably rely on a number of key enterprise solutions to enable productive and effective working practices. These enterprise solutions might include portal solutions, search tools, collaboration platforms, and business intelligence features.

How can you save money without compromising productivity and efficiency? When it comes to getting maximum value from your enterprise solutions, you can approach this in two ways. You can:

• Seek to reduce the total cost of ownership (TCO) of your IT infrastructure.
• Seek to maximize the return on investment (ROI) from your enterprise solutions.

In this paper, we look at how Microsoft SharePoint Products and Technologies can help you to reduce TCO and maximize ROI for your enterprise solutions. SharePoint Products and Technologies provide a comprehensive suite of features in all areas of information management, and can enable you to consolidate all your enterprise solutions into a single, manageable platform. Many of the world's leading companies, such as MTV and the Bank of America, are already realizing benefits from the adoption of these technologies.

Click here to read and download the document.

9-Aug-10 10:00 AM

WHITEPAPER - Manage Contractual Obligations The Right Way

David Montgomery - noemail@clmmatrix.com — Fri, 30 Apr 2010 22:00:00 GMT

Download the full version of this document here: Managing Obligations The Right Way.

The Contract Lifecycle Management (CLM) industry and its solutions are being assessed incorrectly. Supply Chain Management, Buy-side solutions, Sell-side solutions are each artifacts of the past, unnecessary categories and terms which should be eliminated from discussion and benchmark measurements of CLM solution feature sets. This terminology is a result of the historical perspective of what Contract Lifecycle Management currently is, contrasted to what it should be.

It’s time for change.

A Contract is simply an agreement between two or more parties that establishes a set of obligations defining each party’s compliance requirements. Furthermore, obligations, outside of party-to-party compliance, are required by government sources, such as city, state, federal and international regulations. Note: one party’s obligation may be another party’s right. Meaning, if one party has the obligation to pay compensation, then the other party has the right to receive that compensation. For purposes herein, the terms “obligation” and “right” are synonymous and are considered one and the same.

A CLM solution should be unconcerned with its direction of travel: Buy-side, or Sell-side. Instead, these solutions should be concerned with the stated obligations, provide features to ensure obligations are met by both parties, and be accessed as such. To provide framework, new terminology is proposed:

Obligation Management is the ability of an organization to manage its obligations throughout the delivery of its products or services.

Obligation Traceability is the ability of an organization to trace and monitor the Policies, Processes, Procedures, Contractual Clauses, and Personnel who are involved and accountable for the delivery of obligations.

What are Obligations?

An Obligation is a requirement, a bond, a promise; something that must be done. Legal terminology stipulates the use of “shall” and “must” to state firm obligations in a contract or regulation. The terms “will” and “may” are also used to indicate less firm commitments, but are none the less important for each party to track. Contracts and regulations state obligations which should be managed and monitored throughout the contract lifecycle, and frankly, across the entire business.

A contract must contain two essential components to be legally binding: 1) an agreement, and 2) consideration. Broken down, these include an assortment of provisions that encompass the legality of the contract: Terms, Conditions, and Performance. Each of these are stated as firm obligations, implied obligations, discretionary obligations, or entitlement obligations. Furthermore, as mentioned previously, some may refer to a party’s rights.

Contract Lifecycle Management solutions should be measured in total by how well they manage obligations and how well each provides Obligation Traceability in the organization. As important, CLM solutions should be accessed by their ability to be incorporated and integrated into existing legacy systems. Obligation Management and Traceability span the organization; henceforth, a CLM solution should be required to have agile and numerous integration strategies that can be used in provider/consumer data exchange models with other functional components throughout the organization.

Contract Management Today in Business Operations

Most businesses today view contracts and contract management as a file storage of paper documents, from file cabinets, to expensive document management systems. Their contracts and their contractual obligations are not necessarily integrated into business operations. At best, most have manual procedures and document stores to track expirations dates with maybe some technology-assisted alert mechanisms. But, expiration dates or renewal dates are only a small fraction of the complete set of obligations stated in a contract. All obligations are important.

Human analysis of contracts is performed to ensure process-centric business operations meet all of the required obligations. However, this is done without a direct link connecting the process, the policy enforcement and the obligation, because the contractual document is not directly interacting with the processes taken as a whole; it is stored separately from the cross-departmental operational processes put in place.

Best Practice Teams can only do their job after the fact; spending significant time manually reviewing contract terms, trends in using contract terms, and post analysis of operational costs associated with the use of such terms.

Fundamentally, here is the current way most businesses view contracts and contract management within their organization, as a contract repository:

Note the lack of interoperability between a contract repository and the other operational processes in a business. There is a complete lack of visibility into how a single contract obligation affects other business operations and cost. Unfortunately, visibility of this information is achieved using manual efforts of teams of people reviewing line-by-line contracts within the contract repository, or data mining methods across several legacy systems.

The most important point made herein is that obligations are the driving force in everything a business does, in every policy stated, and in every process executed. Contracts should not be hidden in file cabinets or document storage applications. Contract obligations should be integrated into all business operations. Obligations should be traceable across the entire organization to obtain the corresponding cost impact of policy and process decisions. Obligations are the topmost performance metric all organizations should follow.

Obligations are the driving force in everything a business does, in every policy stated, and in every process executed.

What is needed is a direct linkage between the obligation and the business operations. What is needed is a direct linkage between the contractual obligations and customer relationship, financial, supply-chain, and operational processes. What is needed is a direct way to ensure obligations are being met, where they are being met, how operations may be improved to meet them, and a means to measure and reduce the cost of meeting each contractual obligation.

What is Happening Today and Why it is Wrong

Business operations are overly concerned with their processes. Executives are focused on Business Process Improvement and Business Process Reengineering to maximize efficiencies. Unfortunately, this approach has limitations as this focus is incomplete and is solely at the execution-level of the organization. We need to ask ourselves: “Why do processes exist in the first place?” Business processes exist to meet obligations and to enforce policies in a repeatable, auditable way. Obligations (regulatory, contractual and board directives) are stated requirements; bound commitments.

There is no decision-making process surrounding stated obligations; each is a business requirement. But, business policies are designed to ensure obligations are met. They are defined by executive-level decision makers. A policy statement is the result of a decision-making process. Today, how do executives know their crafted policy statements are correct, are the most efficient, and are integrated into their organization’s business processes, if at all? What are today’s methods and technology solutions for Policy improvement?

Acknowledging that obligations are business requirements, and policies, processes, procedures and personnel assignments are organizational designs, how do decision-makers measure the effects of their decisions? The design could be incomplete, wrong or inefficient. Furthermore, these designs translate into organization costs. There needs to be a way for executives to measure the organizational costs and efficiencies associated with their policy and process decisions. There needs to be a way for executives to determine how much it costs to meet an obligation; or said another way, if the obligation were no longer required, what would the financial impact be to the organization? For example, what is the organization’s obligation cost associated with meeting Federal Acquisition Regulation (FAR) 28 dealing with insurance and bond provisions? Or, if FAR 28 were no longer required, no longer an obligation, how much money would the organization save? I highly suspect the answer to this type of question is: “I don’t know.”

It is amazing how much the simple answer to a Yes or No question, while going through the contracting process, ultimately affects organization cost and profit margin. Organizational leaders today need to insist on answers to what should be simple questions. They should require solutions to drive transparency and traceability into the obligations met through the contracting process and those that ultimately affect organization cost and profit margins.

There needs to be a way to determine how much cost is associated with each and every company obligation. The only way to do that is to directly link each contractual obligation to its policy statements, policies to the business processes and procedures that enforce them, and personnel to the processes and procedures. This perspective puts obligations “on top” of the business execution model, and is in fact what Obligation Management with technology-assisted solutions is all about.

The Obligation Management Model

What we need is a new model to provide a benchmark framework for accessing CLM solutions, centered on Obligation Management and Traceability and the solution’s ability to facilitate integration strategies. The answer lies in the CLM solution’s capability to embrace Obligation Management and Obligation Traceability, and as a result, Obligation Cost Improvement. The following illustration depicts this new model:

By putting Obligations on top, with the vision of Obligation Traceability, business leaders will have a better view of just how much it cost to implement a negotiated obligation, a regulation, a self-imposed contractual obligation (board decision), a clause in a contract, and where those costs occur in the organization.

While this article focuses on CLM solution capabilities and features, there are obvious parallels to other business operations in general, accompanied with associated benefits. The core of the Obligation Management Model infers shifting the focus from Business Process Improvement to Obligation Cost Improvement.

Obligation Cost Improvement

Given the Obligation Management Model, business executives will now have the ability to trace the impact of a contractual obligation throughout the organization by policy definition and enforcement, cross-functional processes, and procedures. They will be able to establish policy and measure just how much the policy decision drives obligation costs in their organization; whether the obligation be regulatory, contractual, or board directive.

Fundamentally, business process improvement by itself is simply not a high enough focus to provide reasonable improvements to organizational efficiencies. Obligation Management, combined with Obligation Traceability, tells executives exactly where the costs are, where they need to be improved, gives them input for policy improvements, and gives them visibility into employee skills and hiring requirements.

Business decisions will be more effective, profit margins will improve, and properly skilled personnel can be hired and positioned. In addition, metrics can finally be gathered to answer questions such as:

1. “If I increase the cost it takes my organization to meet an obligation by hiring more personnel, will that improve my product/service throughput and increase my margins?”

2. “If I reduce my obligation cost, does that negatively affect throughput?”

3. “Can I improve my business policies to elevate efficiencies?”

The Affect on Contract Lifecycle Management

So why have CLM solutions been bound to buy-side vs. sell-side evaluations? History explains why. Many contract management vendors have evolved from their legacy technology and have tried to fit their solutions into a Contract “Lifecycle” Management story. Being bound by their prior R&D investments, they jumped into the CLM market space trying to get return on their investments with a less than complete feature set. And further investment has not resulted in return, causing several contract management vendors to have significant financial commitments. Historically, being addressed as such, buy-side solutions and sell-side solutions became a benchmark measurement. Many CLM solution providers have extensive hardcoded software built on decade-old technology and simply cannot afford to start over.

In an article I wrote October 2007, I explained the need for Policy-centric solutions. In this article, I explained the evolution of contracts and how they have been managed. Process-centric solutions are simply not enough for a business needing to enforce policy. Their policies are embedded “somewhere” in a business process with little or no direct linkage for monitoring. Significant dollars have been spent on SAP, Oracle, Seibel, and JD Edwards-like solutions to implement enterprise Process-centric execution into the organization. Policies, as they change over time, require companies to invest more dollars on these hardcoded process-centric solutions to implement the new/changed policy.

Contrarily, Policy-centric solutions constructed to define and track policies facilitate not only the evolution of policy change, but also provide business leadership with traceability and greater knowledge of where a policy is being implemented in their organizational processes. Understanding how business management has matured over time clarifies why Contract Lifecycle Management solutions are currently misevaluated. Many have categorically missed looking at the bigger picture.

What if contractual obligations were individually linked to every policy-centric operation in a business? What if this direct linkage could provide visibility into the operational costs associated in meeting the obligation? What if this technology-assisted insight were available to help businesses improve their policies, their processes, and their costs?

One of the primary missions of a CLM solution is to orchestrate obligation management and traceability tasks as these thread across the organization.

With the experience of working government contracts for 8 years, Requirements Definition and Requirements Traceability became engrained into my mental thought process. The importance of requirements traceability throughout a development project then drove me to create technology that would automatically manage and monitor requirements as they were defined and as they flowed through the development process - ultimately being verified in the delivery of the project’s solution. This same model applies to managing business obligations. These are requirements that have been or need to be stated, monitored, tracked and verified throughout the process of delivering the company’s obligated product or service, and in the process of buying products or services from a supplier. As a result, I would offer a revised definition of Contract Lifecycle Management:

Contract Lifecycle Management is the formation of multi-party agreements combined with the management of a company’s obligations and their direct relationship to company policies, processes, and organization personnel that execute their procedures, review and approve work, negotiate, and execute a contract while acknowledging the importance of cross-functional integration to achieve total concept of operation.

A contractual obligation is stated in a binding agreement. So Obligation Traceability must be driven down from executive-level policy decisions to the exact clause or clauses that are put in place to ensure obligations are met. Business leaders do not yet have the ability to ensure obligation delivery down to contract clause-level statements. Analogous to government contract development, where Requirements Management and Traceability are necessary to connect a system requirement to a software module, Obligation Management and Traceability are necessary for commercial businesses to track obligation fulfillment throughout their organization to the specific costs and role-based resources that are responsible for meeting the obligation.

Obviously, the concept of Obligation Management spans the entire organization. Whether selling or buying products or services, there are enterprise pieces to the solution. CRM (Sales/Support) and ERP (Finance) activities are necessary in executing buying and selling transactions. Binding contracts are prevalent and necessary in both directions and these activities need to be integrated and work together as part of an overall Obligation Management solution.

Note how the above diagram illustrates the direct relationship with key organizational and functional components.

What is needed is a CLM solution, an obligation management function, to manage, monitor, collect and disperse obligation/policy-centric data with the other functional components in the organization. A CLM solution with obligation management and traceability features is an integral component on par with Sales and Finance components. It is proposed that one of the primary missions of a CLM solution is to orchestrate obligation management and traceability tasks as these thread across the organization.

Obligation Traceability means the obligation needs to be stated and linked to business policy, process, procedure, and personnel. Government regulatory requirements are as well stated, for example FAR requirements or Generally Accepted Accounting Principles (GAAP). Business leaders need technology-enabled visibility into the organization mechanisms that provide insight into how their business meets, tracks, monitors and audits its obligations - which is the essence of Obligation Traceability.

A Contract Lifecycle Management solution should provide greater visibility into these direct relationships.

Contract Lifecycle Management Benchmark Analysis

Industry leaders who follow the CLM space should embrace the bigger picture and assess how well CLM solutions provide the ability to manage obligations and policies. Is the CLM solution configurable such that the solution can deliver these features? Adaptability across business lines, industries, and business operations is critically more important than analyzing if a solution can address the features of sell-side contracting. It’s time to step out of what has been, and step into what is needed.

For discussion purposes, business operations are herein viewed by size and maturity. Small businesses manage their operations with either verbal or written procedures to follow. Without consciously knowing, they are establishing procedures to meet their business obligations. Mid-size businesses manage their operations with cross-departmental processes to establish chronological flow, checkpoints, lower level procedures and duties among the personnel involved with the given process. Without consciously knowing, or maybe so, they define and implement processes to meet their policies.

Mid and large size businesses manage their operations by establishing policies, implementing processes to meet policies, and employing department-level procedures to fit into the process model. Without consciously knowing, or maybe so, they define policies to make sure their business obligations are met: be they contractual, regulatory or business obligations established by board-level decision-makers.

How do business leaders ensure obligations are being met? Do they have organizational visibility into who, when and where these obligations are being met? What is their confidence level that obligations are met? To reiterate a central point, it does not matter if the obligation is buying or selling; it is fundamentally and simply an obligation.

Contract Lifecycle Management: The Future of Business Contract Operations

The Obligation Management Model proposes a different framework for accessing CLM solutions. It proposes a structural change in the way business requirements are managed and information is gathered. It is a different perspective of the industry. It is profound in that it moves contractual and business obligations out of filing cabinets and into the executive office, while directly providing in-depth visibility and metrics for business improvement and return on investment. Obligations are the reason why businesses do what they do. Obligation Management, Traceability and the capability to provide visibility into Obligation Cost Improvements are new key fundamental concepts in business operations and in future CLM solutions.

Acknowledging the need for policy management and implementation, more advanced technology solutions have created the ability for a business to define and establish policy-centric contracting solutions, without the need for custom code. The next evolutionary step is Obligation Management and the need for business leaders to have the resources to ensure obligation fulfillment.

These forward thinking solutions also address the Obligation Traceability functionality, critically important in providing leadership with organization visibility. Our future will complete the delivery of total Obligation Management and Obligation Traceability from all sources, whether the source is contractual, regulatory, or board-level directives. The question now becomes: How are you going to manage your company’s obligations?

30-Apr-10 5:00 PM

No Umbrella Required.

Darrin Poole - noemail@clmmatrix.com — Thu, 22 Apr 2010 02:00:00 GMT

Download the full version of this article here: No Umbrella Required.

Contract management is a lot like a rainstorm. When it’s just a sprinkle, it’s easy enough to keep track of each individual contract. But what happens when the drizzle becomes a deluge, and contracts begin falling into different departments and different locations simultaneously?

Information would be splattered everywhere. Critical data would be so spread out that it would be virtually inaccessible. Then factor in the added layer of complexity when the client relationship is complicated such as clients who are also vendors or partners.

Contract lifecycle management brings order to the chaos by standardizing your current process and better organizing your contract information. Much like funneling the heavy rain into a water
collection barrel, contract lifecycle management collects all your vital information into one place and makes it accessible to all relevant parties. Bottom line? Efficient contract management is tied directly to profitability. Implementing an efficient contract lifecycle management process shortens cycle times, which means you get paid faster.

Coventry Health Care, a national managed healthcare company based in Bethesda, Maryland, recently lived through one such contract management deluge. With 500,000 existing contracts and a creation of about 3,500 new contracts monthly, the company’s overall financial performance was shaped by its insurance and managed care contracts within the provider networks. Coventry knew things had to change, or their company would be harshly affected financially by such disorganization.

“Through acquisition, we had 17 health plans, and each had its own different flavor of contract boilerplate and contract processes,” said Kevin Sears, Vice President of Coventry’s Network Development. Sears spearheaded an enterprisewide initiative to develop and implement contract lifecycle management.

“You have to have some tool or system that makes sure these processes work to the advantage of the organization,” said Sears. “Without it, you can create a financial problem very quickly.”

In today’s marketplace, information is power – but it can be crippling if the necessary information is inaccessible.

“It becomes a mixed bag of stuff that’s out there, and confusion can develop,” said Bill Pugh, president of CLM Matrix, a contract lifecycle management solutions provider. “Your wires can get crossed, decisions get delayed, and down time slows your business cycles.

The Check's in the Mail

Most companies, on average, wait 60 days to collect on receivables, according to Pugh. If the cycle is reduced by a mere two days (two days = millions of dollars in cash collected), that money can be used to meet expenses of the business.

“Time is money, and the more time you spend doing inefficient things, it’s costing you money,” said Pugh. “The automated system puts rigor into the process, forcing a more productive and accelerated timeline. It also conditions your customer to what your negotiation process is.”

In Coventry’s case, the new contract lifecycle management solution cut their internal negotiation cycle time in half – and improved the experience of all parties in their widespread network.

“It allowed us to drive through the contracting process within a timeframe the organization deemed to be appropriate,” Sears said. “All reminders, escalation processes and the things that you need to keep the ball moving were implemented, which resulted in a lot less down time than we had previously.”

Time is Money

The benefits of contract lifecycle management are multi-fold. According to Pugh, customers of CLM Matrix often turn to automated systems for reasons other than reducing contract cycle time,
such as risk mitigation, financial reporting or compliance with government regulations. More efficient processes mean time and money saved.

In addition to significant reductions in business cycle times, full contract lifecycle management creates transparency across the enterprise. Sales, financial and legal executives can monitor contracts through every business phase, including negotiation, execution and expiration.

Public companies are also able to ensure compliance with rigorous regulatory standards, shrinking financial reporting cycles with heightened confidence in the accuracy of their numbers. CLM Matrix has helped clients reduce the time it takes to complete SEC filings from as many as 10 days to three to five days.

Other advantages include:

Standardized contract creation using legal clauses that include most favorable terms as defined by the company
Significant cost savings through more efficient workflow
Enhanced collaboration through online negotiation and information exchange
Easier access to the contract repository with defined metadata that enables greater search and retrieval
Enterprise risk management through reporting across clauses and terms
Quicker, more efficient payment resulting from clarity of contract terms

Storm-free Business Relationships

Relationships are the driving force behind virtually every company in today’s economy. Contract lifecycle management empowers companies to get the most from their relationships - and everyone involved in the process wins. “An efficient contract management program can optimize your relationships and keep the company protected in today’s changing business environment,”
said Pugh. “It certainly helps better manage the impact of those sudden rainstorms and keeps you from getting drenched.”

21-Apr-10 9:00 PM

SharePoint 2010 and Office 2010 - White Paper

Darrin Poole - noemail@clmmatrix.com — Tue, 09 Feb 2010 01:00:00 GMT

To read the full white paper contents click here: Business Productivity at it's Best.

Abstract

This paper shows how two products, Microsoft® Office and Microsoft SharePoint®, contribute to the powerful architectural design of the Microsoft Business Productivity Infrastructure (BPI). The BPI stack approach suggests that only by thinking at a capability level (for example, “What do users want to do?"), and then adding the right aspects of capability in each place (client, server, and services), can we create desktop applications that also deliver rich server and services capabilities to information workers.

This paper describes how the 2010, 2007, and 2003 versions of Office work together with the 2010, 2007, and 2003 versions of SharePoint technologies. Although we provide an overview of Office and SharePoint features working together in past versions, this paper focuses on the integration features of the Microsoft Office 2010 experience with Microsoft SharePoint 2010.

The scenarios outlined in this paper show examples of how the power of SharePoint 2010 and related servers can be combined with capabilities of one or more Microsoft Office 2010 applications to deliver rich, intuitive, and easy-to-use capabilities directly into the hands of desktop users.

The scenarios cover the following value areas:

Collaboration Without Compromise
Bring Ideas to Life
Anywhere Access
The Practical IT Platform

The paper concludes that to realize the best user experience with Office and SharePoint integration features, organizations should upgrade client programs to Office Professional Plus 2010 and server technologies to SharePoint 2010.

Introduction

Microsoft Office has always been about automating tasks and providing people with choices for how they get things done at work, at school, and at home. When Microsoft Office products were first introduced, they helped people move beyond manual processes and tools to automated processes on computers. Over time, Microsoft Office has evolved and is now the primary vehicle by which people experience Business Productivity Infrastructure capabilities, such as collaboration and content management. Microsoft Office helps enhance business productivity by offering rich server capabilities that are tightly integrated into its user experience.

Many analysts support the notion of an integrated productivity environment for information workers. Gartner Group’s "Smart Enterprise", Forrester’s "Information Workplace", and Yankee Group’s "Extended Enterprise" frameworks all combine these capabilities to create the next-generation workplace for information workers. The introduction of Microsoft Office 2007 was the first time a solution of client, server, and service products, with tight design integration, could deliver the functionality that would have previously required 6–10 "best-in-class" products for a full BPI platform. The 2010 release of these products takes this integration to the next level by providing more flexibility in delivery and new capabilities to help save the business time and money.

The focus of this paper is to provide an overview of the specific capabilities enabled through Microsoft Office and SharePoint working together as key components of the BPI stack in the 2010 release.

8-Feb-10 7:00 PM

Mitigating Risks with CLM Matrix

Darrin Poole - noemail@clmmatrix.com — Mon, 26 Oct 2009 13:00:00 GMT

Download the full version of this article here: Mitigating Risks with CLM Matrix

When Hurricane Katrina honed in on the Louisiana Coast in the Fall of 2005, companies headquartered in New Orleans weren’t alone in their exposure to the impending destruction. CEOs in lots of places – Chicago, New York, London, Munich for that matter – had plenty to ponder as well. It wasn’t that these CEOs had branch offices or subsidiaries in New Orleans that they were worried about. They were busy trying to determine if any of their customers and suppliers were located on the Louisiana Gulf Coast.

Did they have customers who would fail to meet contractual obligations? Did they have a distributor in Slidell who got their product to key customers? Did they rely on a company in Houma to keep their supply chain intact?

In order to understand the risk to their business – and make a plan that would keep them operating – corporate officers needed access to all the contracts they had with companies where Katrina might wreak devastation, in this case from the Florida Panhandle all the way to the Texas Gulf Coast.

If they couldn’t get that information, they were sitting ducks.

With the typical Fortune 1000 company maintaining an estimated 20,000 to 40,000 active contracts at any given time, it’s virtually impossible to get an accurate assessment of risk exposure without an enterprise-wide system to manage the active contract portfolio. Finding every contract from the Florida Panhandle to the Texas Gulf Coast would be an intimidating task.

“Do you know where your data is? You start to care when there’s a natural disaster,” said Jeffrey Gordon, a professional negotiator and author of the Software Licensing Handbook. Because his client had contract lifecycle management in place, the company – in 20 minutes – was able to search through its entire portfolio and identify all of its contractors along the Gulf Coast and start planning for alternate operations. “We weren’t going to put up sand bags and block the water, but we could mitigate the risk,” Gordon said.

With the size and complexity of business today, the risks go much further than natural disasters. Contracts typically contain multiple terms and conditions that trigger cost penalties and potential liabilities, while Sarbanes-Oxley and other compliance initiatives have all but inserted government rules into contractual promises.

“Without an integrated structure you expose yourself to risk at all stages of the process,” said Timothy L. Smith, principal of The Plaid Group, a business consulting firm that specializes in mid-size organizations in transition. “Contracts can easily end up in a black hole without systematic management.”

Financial, sales and legal executives struggle with a variety of issues, including:

• Lack of insight into business policy and contract processes when going into negotiation

• Difficulty understanding the cause and effect of various contract clauses

• Uncertainty regarding the impact of the contract portfolio on the future economic health of the company

• The potential for non-compliance with regulatory policies and procedures

• Legal exposure through inadequate or inappropriate wording or usage of terms and clauses.

Everybody’s Frustrated

The Plaid Group was called into a situation recently in which the client had developed a new product and outsourced the manufacturing function to an outside partner. A few months into the relationship Smith got a call from the client saying, “I want you to go over there and straighten them out.”

Frustration had built on both sides, with Smith’s client being unhappy about quality issues and the manufacturer saying it had “bent over backwards to meet a moving target of product specifications.”

If the client had contract lifecycle management in place, it would have been able to approach the negotiation phase of the relationship strategically and with more insight; it could have developed contract clauses that would have managed the expectations of both parties, Smith said. The Plaid Group guided the renegotiation of the agreement that put procedures in place that enhanced communication and made both parties accountable to the success of the relationship.

Internal Agreements

An increasingly frequent problem relates to internal agreements as companies grow to include multiple subsidiaries. “Companies that do business with their own affiliates almost always fail to adequately memorialize their deals because they think of themselves as siblings. We’re family,” Gordon said. “The contract isn’t for the marriage; it’s for the divorce.”

And when companies enter merger and acquisition agreements, the contents of the contract portfolio are particularly sensitive, he said. A search through the contract database of one of Gordon’s clients showed that the company had neglected to insert contract clauses that would have assigned existing business to a new owner in the event of an acquisition. “It was a last minute scramble,” said Gordon. “We had to quickly get an amendment to all those customers. A lot of letters went out.”

If the client had a contract lifecycle management governed by a policy-based contract initiation process, it could have anticipated the need to insert contract language that would assign business to a new owner in the event of an acquisition. In this case, the company lost 25 percent of its customers because they refused to transfer their business relationship.

Mitigating the Risk

Many leading experts say the risks of failing to manage the contract lifecycle are “almost infinite.” They cite:

• Companies overpaying millions on software maintenance by paying fee increases when they fail to monitor contract language that doesn’t authorize pay hikes

• Having to scramble to get critical services (e.g. technology support, telecommunications support) when a company fails to anticipate contract expiration dates

• Getting services and products they didn’t agree to buy but are obligated to purchase because they’re hidden in contract clauses.

By mitigating risk through visibility into an active contract portfolio, a company can help ensure the effective management of the process from initiation and negotiation to execution and expiration. “You can optimize your internal and external relationships and keep the company protected in today’s changing business environment,” said Bill Pugh, president of CLM Matrix, whose Matrix software has been developed with process best practices for a number of industries, including healthcare, insurance, financial services, entertainment, energy and high technology. “You can also reduce the company’s risk by proactively monitoring contractual rights and obligations,” he said.

The advantages of a full contact lifecycle management tool include:

• Standardized contract creation using contract clauses that include most favorable terms as defined by the company

• Enhanced collaboration through online negotiation and exchange of documents

• Faster approvals supported by automated workflow

• Global contracts visibility to support best practice information and instruction from legal, operations and finance

• Easier access to the contract repository with defined metadata that enables greater search and retrieval

• Enterprise risk management through reporting across clauses and terms.

“The transparency of the contract portfolio helps to simultaneously resolve the concerns of the entire executive team, said Pugh. It supports the financial officer responsible for the financial integrity of the company, the sales executive who needs to act quickly to bring in revenue while upholding the company’s business policies and brand, and the corporate counsel who needs to minimize legal exposure and litigation,” he said.

An Historic Opportunity

The economic downturn has slowed corporate spending, but as the climate improves, companies are looking forward to a new period of growth. This presents an historic opportunity for a company anticipating high growth to prepare for and invest in its future, said Pugh. “When the action begins – and it will – the company will have the capacity to harness the power – and the risk – of its contract portfolio through improved compliance and the ability to capture revenue and contain costs.”

26-Oct-09 8:00 AM

Defining a SharePoint Solution Roadmap

Darrin Poole - noemail@clmmatrix.com — Tue, 23 Jun 2009 09:00:00 GMT

Download the full version of this article here: Developing a SharePoint Roadmap

When considering a Microsoft Office SharePoint Server 2007 solution, there are six major knowledge areas to explore. These SharePoint solution components should be considered when defining the SharePoint Roadmap. The feature areas are as follows:

Collaboration - Creating an environment that allows teams to work together by providing an intuitive, flexible, and secure capability for sharing information.
Portal - Delivering the capabilities to personalize the user experience of an enterprise website by providing individuality, security, and social networking capabilities.
Enterprise Search - Locating relevant data and content distributed across a wide range of sites, document libraries, business application data repositories, and other sources. Enterprise search also supports the location of appropriate resources to address specific questions.
Content Management - Creation, review, and management of content, regardless of the format of the content. Content management can include document management, records management, and Web content management.
Business Forms and Integration - Creation and implementation of forms that enable efficient business operations through the use of business process workflows. The forms are delivered via standard Web browsers and can be extended via the integration with databases and third party applications.
Business Intelligence - Delivery of business critical information using a wide range of solutions, including server based Excel spreadsheets, SQL Reporting and KPI tools, to assist in the decision making process.

Building the SharePoint Roadmap

Building a successful roadmap involves three areas: People, Process, and Technology. Business processes represent the way we capture information, organize and store the information, and, ultimately, use the information in our decision processes. The technology functions include all system components that make up the SharePoint solution. However, even the best technologies and logical business processes will fail if the user community does not readily adopt them.

The SharePoint Roadmap helps set a vision for a SharePoint project and defines how that vision will be achieved. The goals of the roadmap are to help the business users understand their needs and how SharePoint will help achieve their goals. In developing the Roadmap, a number of topics are addressed

SharePoint vision: Work with senior managers to align the SharePoint vision with business goals.

• Governance: What is needed to allow all departments or parties to help define and implement the SharePoint system?

• Determine desired features: What functionality is needed?

• Prioritize features: Determine the complexity and importance of each feature.

• Technology gap analysis: Understand and document what technologies are needed for the overall solution.

• Roadmap: Define in text and chart format what will happen over the next 18-24 months.

SharePoint Roadmap Benefits

The intent of the SharePoint Roadmap is to define a SharePoint vision aligned with business goals and then create a structured approach to building a SharePoint solution that meets those business needs. The SharePoint roadmap provides the following benefits:

Aligns your SharePoint solution to the business needs and strategy.
Defines governance with input from multiple organizations.
Leverages your company's users to define the most important SharePoint applications and features.
Defines what technology is needed (and when) in order to make the SharePoint deployment a success.
Helps ensure your SharePoint and integration projects are on track to achieve technical and business objectives.

At the conclusion of the Roadmap development, your organization will be able to develop a plan for a successful SharePoint implementation. This plan will help your organization:

Gain a better understanding of the business background and expand your knowledge of the business and user requirements necessary to complete this project.
Define the functional, content, and management needs of the SharePoint solution to drive future phases of development.
Map the business requirements to the SharePoint architecture being developed to assess what components can be leveraged in this initiative and what gaps still exist.
Create an implementation roadmap that maps the user requirements to phases of the project and defines the phase timelines and deliverables. This roadmap will also be used to estimate the remaining phases of the project.

Developing a SharePoint Roadmap will ensure that your organization will be able to align the business goals with the capabilities provided by SharePoint. Engaging the business to define the desired functionality of the SharePoint solution is the one key activity to a successful implementation.

Agree? Disagree?

Have your own roadmap? Share your thoughts and opinions at the blog for Infonomics, Information at Work.

Alan Weintraub is a Principal, ECM Solutions, for Perficient. Alan has extensive experience in all phases of Enterprise Content Management solution implementations. He has worked as a Research Director at Gartner, focusing on the Content and Document Management markets and a consultant where he designed and implemented document management systems. Prior to his consulting experience Alan engaged in technology management for major pharmaceutical companies. He has over twenty five years of experience in the information systems profession.

About CLM Matrix

· Rule-based document creation

· Clause libraries

· Policy-based approval workflow

· Automated reminders and alerts

· Real time user defined reporting

· Integration with legacy enterprise software

· Contract compliance tracking

· Multi-language capabilities

· Support for global environments

· Fully configurable to specific process and document types without code (wizard driven)

©2009 CLM Matrix, LLC. All rights reserved.
CLM Matrix makes no warranties, expressed or impolied, in this summary.
CLM Matrix is a registered trademark of C-Lutions, LLC.
Other product names may be trademarks of their respective companies.

23-Jun-09 4:00 AM

How Contract Lifecycle Management drives Real ROI for your SharePoint Investment

Darrin Poole - noemail@clmmatrix.com — Mon, 15 Jun 2009 21:00:00 GMT

Download the full version of this article here: How CLM Drives Real ROI

SharePoint® is one of the hottest products in the enterprise content management (ECM) and collaboration spaces. Why are organizations implementing SharePoint? Is it because Microsoft™ has done a great job at describing the benefits of using SharePoint or is it all about a technology looking for a problem to solve? Finding the real benefit for implementing SharePoint is not necessarily about the capabilities of the technology, but how those capabilities align with the needs of the business.

One of the toughest questions I am often asked when first discussing a SharePoint project is to differentiate the hard versus soft benefits of SharePoint. This is often quite difficult to answer as a large number of the benefits can be categorized as soft as they address the need to find the right information and collaborate more effectively with others in the organization. Assigning hard dollar savings is not a simple task for these types of benefits. So how do you develop real dollar ROI benefits for SharePoint? One way is to look for a SharePoint-based solution that addresses a business need that can result in cost savings or cost avoidance.

One such solution that has proven to yield hard ROI benefits is Contract Lifecycle Management.

In today’s complex business environment, many organization’s contract management processes are defined by fragmented procedures, labor-intensive activities, limited visibility into contract terms and conditions, and ineffective compliance management and governance. Today’s processes are very manual and prone to inconsistencies and errors. These operational inefficiencies lead to lower margins and increase legal and regulatory business risks as many companies fail to honor the obligations defined in their contractual agreements.

Mis-management of contracts can cost a company millions of dollars in lost opportunities and additional fees. Organizations that have undertaken a contract lifecycle management project
have done so to address some of the following issues:

Fragmented internal procedures
Undefined workflow
Labor-intensive processes
Poor visibility into contracts and terms
Ineffective compliance and management
Inadequate performance analysis

Contract Lifecycle Management is a framework of policies and technologies that allow organizations to create, negotiate, and manage the legal documents that are used in the course of running a business. These technologies can include document management, records management, imaging, collaboration, email management, search, and workflow and business intelligence. SharePoint and Office 2007 can provide an excellent platform to solve this business issue.

Understanding the typical lifecycle of a contract will easily show how SharePoint can meet the needs for not only creating a contract, but managing the terms of the contact once it has been approved.

Using SharePoint and Microsoft Office can provide the capabilities to meet the lifecycle needs for creating, reviewing, approving, and managing a contract. These include:

Automated technology using Word for contract creation and formatting based upon contract request.
Automated, collaborative workflow for approvals, notifications, and reminders. These workflows can be based on terms of the contract.
SQL-based digital, historical contract summaries of information pulled directly from the contract Word document for quick research.
Role-based contract monitoring and tracking portal.
Advanced SQL reporting capabilities for contract trend, performance, compliance, and governance analysis.

By implementing Contract Lifecycle Management on a SharePoint platform, an organization can realize:

Standardized contract creation using contract clauses.
More effective collaboration through online negotiation and exchange of documents.
Faster contract approval and signing with automated workflow.
Global contract visibility for best practice sharing.
Standardized contracts that include the most favorable terms, as defined by the company.
Risk management through reporting across clauses and terms.
Risk mitigation through control of contract language and documents.

Looking at some examples of why organizations implement a Contract Lifecycle Management solution will demonstrate the benefit areas and the type of ROI that these organizations expect to receive. A pharmaceutical company implemented Contract Lifecycle Management to address
their need to better manage their contractual relationships associated with their clinical trial procedures. Many of the contractual relationships stipulate penalties for non-compliance and regulatory procedures require annual audits to ensure the company executes within the contractual guidelines. The Contract Lifecycle Management solution provided visibility into their active contract portfolio helped them insure that they were effectively meeting the required legal and financial obligations.

An entertainment company required a Contract Lifecycle Management solution to manage the numerous types of contracts related to a movie production. These contracts were often very complex with many different clauses that were dependent on the individual negotiation. Missed contractual obligations could result in millions of dollars in late fees and penalties. The company implemented a Contract Lifecycle Management solution that standardized the contract
clauses and provided automated alerts and triggers to reduce the possibility of financial penalties and ultimately improve the company’s bottom-line performance.

These two examples show typical results that will yield real, measurable ROI that can be used to justify the SharePoint investment. Contract Lifecycle Management can help your organization transform contracting from a costly, paper-based process into an efficient, technology-enhanced
“system” that will allow your organization to not only manage the entire lifecycle, but also manage the actual terms of each contract.

Alan Weintraub is a Principal, ECM Solutions for Perficient. Alan has extensive experience in all phases of Enterprise Content Management solution implementations. He has worked as a Research Director at Gartner, focusing on the Content and Document Management markets and
a consultant where he designed and implemented document management systems. Prior to his consulting experience Alan engaged in technology management for major pharmaceutical
companies. He has over twenty five years of experience in the information systems profession.

15-Jun-09 4:00 PM

Policy-centric Control in the Contract Management Process

David Montgomery - noemail@clmmatrix.com — Thu, 11 Jun 2009 22:00:00 GMT

Download the full version of this article here: CLM Policy-Centric Controls

THE CONTRACT LIFECYCLE MANAGEMENT (CLM) MARKET has evolved over the last 30 years. In fact, one may view it as a growth from rudimentary contract document editing to content management, and to the inclusion of full life-cycle management. The recent focus has been to define the overall business process encompassing contracts and implement this process with the aid of technology — beyond word processing and storage frameworks. With this process-centric view, buyers in the public and private sectors have been seeking applications to help their business organize their procedures, track their approvals, and manage their contract repositories. However, this trend is, interestingly enough, developing beyond a process-centric perspective. Buyers in the market are now embracing the desire for technology to help them manage and enforce their business policies. CLM buyers have become policy-centric.What is the difference between process-centric and policy-centric? To understand this difference, it might be best to first understand the contract evolutionary picture; that is, over time how technology has addressed the business needs around contract creation and administration. Figure 1 on page 26 demonstrates the evolutionary picture as different periods of evolution, each period defined by having cer-tain characteristics.

The Creation Period First, there was a need to simply help a business create a contract — to write it down on paper. Early on, contracts were hand-written. The tool of choice was a pen, a writing implement to permanently mark obligations between two or more parties. This was time-consuming, and reproducing copies was laborious and error-prone. Then the typewriter was invented, improving read-ability and making it easier to reproduce copies with the aid of the mimeograph. With the advent of computers becoming business tools, word processing applications provided a way for contracts to be created and saved. Editing contracts became much easier. Formats and styles were designed to better structure contracts. Locating existing contracts and formats, implementing busi-ness policy, and productivity was frustrating, difficult, and time-consuming.

The Organization Period Once contracts had an easier way to be created, the business need became one of organization. File management systems provided a way for businesses to organize contracts into storage groups, directories, and folders. Yet, with this, a need developed to address the problem of locating a contract once it was stored on a floppy disk or one of the many storage directories. Content management systems then surfaced to meet this need, providing a way to associate attributes with each contract so that one could locate all contracts that have a given set of key attributes, for example. Many of today’s businesses find themselves still struggling through this period.While contract location issues eased somewhat, problems remained with implementing business policy and productivity. A new issue started to surface as well — tracking terms across multiple contracts.

The Processing Period In recent years, a business need has developed for technology to help in the overall process involving the creation, organization, negotiation, approval, signing, and execution of a contract. This process-centric view includes needs for better visibility into the contracting process, better standardization of procedures and content, improved collaboration among the employees involved, and improved quality in customer relationship, risk management, and audit discovery. Contract Lifecycle Management technologies grew to meet this need by delivering capabilities to define processes. Businesses achieved better visibility into contracting operations and they now had a vehicle to standardize their procedures and track-related activities. By centralizing these operations, employees can better collaborate and monitor the details. Several CLM vendors provide process-centric solutions. Most do so by delivering a fixed process and associated set of data items that once implemented provide answers to business needs, so long as the business follows the process procedures established by the CLM vendor. The better CLM vendors determined that businesses should be able to establish their own process with their own data terminology, and not be bound by fixed contract terms and procedures. As such, they provide solutions that are more agile to better adapt to the true needs, by allowing a way for businesses to employ process improvement techniques on their contracting process, change their process when a change is warranted, and allow a business to grow with the solution and the solution to grow with the business.Contract location issues continue to be solved, and productivity metrics improve by putting in place standard, repeatable contracting processes. However, implementing business policy, and ensuring such policy is followed, continues to plague solutions in this period.

The Controlling Period The market has entered the “controlling” period of evolutionary need. Businesses with defined processes are realizing that these processes and procedures are implementing business policy. This is an important addition in perspective. Not only are businesses concerned about following a prescribed process, the one that is defined by operational standards, they also understand that policy governs how these processes should proceed. Businesses want technology to help them implement policy and implement how that policy must govern the process, its detailed steps, the associated approvals, and the correct contract type being produced. The implications of this policy-centric perspective is that CLM vendors need to develop technology that allows for policy definition, not simply process definition; policy integration in process definition in data capture and in contract creation.So now let’s look at answers to the question, “What are the differences between process-centric and policy-centric CLM solutions?”

A process-centric view states that data needs to be collected. Typically, a human needs to “make sure” that the correct data is collected, resulting in potential rework and quality errors. A policy-centric view guarantees that the correct data is collected at the correct time in the process, and this data is used to determine which business policies now apply.

A process-centric view states that approvals are required. Typically, a human determines to whom an approval request should be sent. However, this too is error-prone, as occasionally evidenced by the wrong level of approval being granted and not discovered until after the contract is executed. A policy-centric view guarantees that the correct level of approval is obtained at the correct point in the process, because this view executes business policy.

A process-centric view states that a contract needs to be created at some point in time. Typically, a human would obtain a contract template for what he or she thinks is the correct contract type; and/or would obtain additional clauses and place these clauses in the template. Manual contract construction is a flawed approach because business policies are inconsistently followed, and there are issues in clause and contract quality and versions. A policy-centric view states that the correct type of contract is created containing the correct clauses in the correct document location and which clauses are required given the situation at hand; for example, making sure a specific clause is included or not included in a contract with the prescribed approval in place.

Summarizing, a process-centric CLM solution helps to make sure a process is executed correctly. A policy-centric CLM solu-tion makes sure business policies and processes are executed correctly. Have you ever been faced with the question, “Okay, I have completed my task, what’s next?” or “This is a special situation — who needs to approve it?” A solution built around a policy-centric core will evaluate the situation and take the user to the appropriate policy-driven next step, and make sure that appropriate policy-driven approvals are in place before continuing. As such, a policy-centric solution guarantees the correct policy is enforced. In fact, and more importantly, it is the policy statements that dictate which process to follow to begin with.It is straightforward to understand why business needs policy-centric CLM solutions. This level of control is a must for a business trying to completely address the need to improve their overall contracting process. Without technology that delivers policy-centric capabilities, human decision-making remains required for adherence to policy, and therefore, the potential for human error and policy mishaps exist.What specifically does this mean for a CLM solution? Such features go beyond process definition and go well beyond solutions that deliver only a predefined set of rules to be leveraged in a process (such as e-mail notifications or expiration date alerts). A robust policy-centric CLM solution should provide the capability to:

Define policy rules in the terminology of the business, with the agility to define any combination of rules to be applied when and where such implementation is dictated by policy;
Integrate policy rules within the process such that the process proceeds down the correct path according to the business policies;
Integrate policy rules within the process such that the correct data, contract attributes, and negotiated decisions are captured at the correct time and are captured fully and completely;
Integrate policy rules within the contract creation process to guarantee the correct contract type is created, and the applicable contract content (and only the applicable contract content) is contained therein; and
Change policy rules when and if corresponding changes to policy occur within the business, and have these policy changes take place without the need for software redeploy-ment or custom software development. Essentially, this capability directly infers that a business can define their own policies within the solution and not be bound by out-of-the-box rules hard-coded into the software.

The Fulfillment Period A future period of evolution presents a vision in which the technology directly fulfills the established policies and carries out all contracting activities without the need for human intervention, unless human intervention is warranted. With the technology of policy management and rule-driven controls put in place by the controlling period of evolution, it is not a stretch to envision such policies and rules to be at the core of an expert system; expert in both contracting process and contract documentation creation.One could say we are at the beginning of this evolutionary period in the contracting process, at least from a technology perspective. Total contract fulfillment is achieved during this period of evolution.

Imagine a concept of operation dealing with “sell-side” contracts, where a sales department representative logs in to a contract expert system. An initial set of questions is asked, and based on the answers, the contract expert system performs certain activities, asks more questions, obtains the necessary approvals, and builds the appropriate contract from clauses stored in a clause library.
Imagine the contract expert system implementing business policy perfectly, with no error in execution. If a specific clause is required for a situation, then the clause is included in the contract at its correct location, automatically.
Imagine a legal staff not being troubled with “standard” contracts, thus having time to use their skills more effectively on only the more tedious, out-of-the-normal-policy contracts. The contract expert system also would be able to use nonstandard clauses in a contract build, defined as clauses that deal with concessions, discount levels, service levels, and other situations that are not a part of a standard contract build, but are clauses that have approved language and are selected usually through negotiation based on the characteristics and terms of the contract. And if special approvals are required, the contract expert system will obtain approval before inserting the clause into the contract build.

Conclusion Business needs are shifting from process-centric CLM solutions to policy-centric solutions. This shift may be debatable, but it is logical given an appreciation in how contract activities and their supporting technology have evolved over the years.The shift to policy-centric solutions is just one step in the overall contracting evolution. The characteristics of the shift have been born from a need to ensure business policy is followed and policy management is in place. More than process management, policy-centric solutions ensure the right process is followed at the right time.

11-Jun-09 5:00 PM