Contract Management: 3 Reasons to Invest in Transformation

I recently gave a speech at an event hosted by the International Association of Contract & Commercial Management (IACCM), an industry organization with some real ground-breaking ideas in the area of contract management. One of the key topics of discussion at this event was around transformation and how important it is to take time to evaluate processes, people and technology interfaces before pushing ahead with an initiative in this space. 

I often talk to clients who have tried to implement technology applications or off-shoring projects or other programs that lack a real transition or transformation approach.  And the result it usually met with disappointment, not necessarily due to the underlying technology or service but more to do with the thought and planning around installing a contract and commercial management program.  There are a lot of reasons to install a program (cost-savings, cost-avoidance, revenue recapture, etc.) But without a little planning, all those hopes and aspirations could be lost. 
I believe that if a company is going to invest in a program, they should also invest in a transformation effort – here’s why:

1.      Process Improvement
Simply put, it doesn’t make sense anymore to pay someone to take a broken process and put it offshore.  Read any advisor report: Lift and shift is dead.  If a company is going to invest in taking tasks off-shore, then it needs to go the extra step and put a truly rationalized processes off-shore.  Without the proper process there are fears of a disconnect between off-shore and on-shore or retained and outsourced.  This opens the door for duplicative work.  I spoke to a client recently whose process involved checking abstracts onshore, checking twice offshore with a vendor and then have the onshore check again. It was easy to see why they had unnecessary duplication of effort.
2.      Technology Alignment
So let’s all agree this is not the 20th century and that technology is needed.  And I don’t mean Excel or Sharepoint.  Those are great tools and fine products, but to properly attack contract and commercial issues we need to dig deeper for value, automation and analytics.  Manual processes can only be temporary fixes in today’s world.  If you are going to tackle this issue, transform the way you do it.  Not just in people or process, but through tools as well.

3.      Change Management
This is a big change.  The value of most companies is held in their contracts and if you are to change that process you are going to touch a lot of stakeholders in the organizations. Please give them a little time, a little training and lot of communication.  This will lead to higher adoption, better speed to value and more innovation going forward.  Failure to invest here will lead to low adoption and frustration on the business case.
In short, contract and commercial management are ripe for service improvement.  But please don’t skip to the end, or you may be disheartened in what you find.

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