I thought my series on visibility was over, but once again our friends at CPO Rising have delivered another article focused on visibility. This time centered on Contract Visibility. You can access the full article HERE.
At Selectica we completely agree that the need for increased visibility across the source-to-settle process is a high priority for our customers and the market in general. The need for visibility is driving our customers to take action impacting existing processes and technology, including replacing legacy stand-alone Contract Management solutions and homegrown repositories. As a solution provider, Selectica is driven to ensure that the capabilities needed for improved contract visibility (i.e., a unified solution coupling Contract Lifecycle Management with Spend, Sourcing, Supplier Management and P2P) is what we deliver.
CPO Rising highlighted three key areas of visibility, namely, Sourcing Terms and Conditions, Access to all contracts, and Maverick Spending. This visibility as it relates to contracts is essentially focused on ensuring that the contract embodies what was negotiated and that the supplier is compliant with the terms of the agreement from Price to Quality and Compliance Terms. Each of these requires implementation of broader business process and technology initiatives. Ultimately, it’s the coupling that maximizes visibility and value. When each of these three areas is measured and managed, it’s a terrific accomplishment with real impact to the organization including bottom-line savings and risk reduction.
While this is a truly monumental achievement, at Selectica we know the journey to better visibility isn’t over. “What’s next?” you ask. Related to the contract, two domains have emerged and enjoy a growing voice with our customers and prospects.
The first is about improving the contract negotiation process. This can be accomplished through analysis of the approval process, identification of bottlenecks and problematic clauses. For example, imagine a scenario where some versions of your indemnification clause are constantly being redlined, leading to a significant drain on legal, a slower negotiation and a potentially frustrated supplier. Being able to determine which version of the clause undergoes significant negotiation affords the ability to proactively shorten a negotiation cycle and improve your standards.
The second domain is for contracts to better support the demands of today’s complex business ecosystem. Said another way, businesses are in need of insights that go beyond the silo of an individual contractual relationship, insights that account for the dependencies between contracts. Examples of these dependencies include cumulative purchase volume commitments and sell-side commitments that impact procurement contracts. In both cases, there is a clear need for robust CLM capabilities and visibility across all contracts, not just buy agreements. There are many implications for the contracting process and the implementation of a CLM solution when considering a unified Enterprise CLM solution, but we’ll save that for another time.
*Read this white paper to learn more about contract collaboration and procurement’s role in decreasing risk, ensuring compliance and increasing savings.