Contract Management: Can You Keep a Secret? Stealth Transformation Works!

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I had a great call last week with the General Counsel of a multinational.  He was very forward thinking in terms of accepting offshoring, being open to new technologies and understanding that process is key.   He had the vision, knew the benefits, but was still challenged because he was afraid that his organization and team […]

I had a great call last week with the General Counsel of a multinational.  He was very forward thinking in terms of accepting offshoring, being open to new technologies and understanding that process is key.   He had the vision, knew the benefits, but was still challenged because he was afraid that his organization and team “were just not ready.”   This is a real risk. 

As I have written before, tools are great but are only part of the answer. Lift and shift BPO is dead because paper savings on labor arbitrage usually leads to long term consternation and disappointment.  In order to get real benefits, a company needs to adopt some level of transformation.  Pushing broken processes to other countries is not the right answer.  It may lead to nice dinners, good air miles and lovely team pictures, but it isn’t sustainable unless the processes are transformed. 

This may sound like table stakes in 1990 for BPO and ITO, but in commercial and legal outsourcing a lot of companies are still there.  The reason is quite simple: this is the last area to get real transformation available to it.  IT, finance and accounting, HR, procurement operations, supply chain, etc. have all launched their transformation journeys,  but legal, commercial and non-commodity sourcing are still running processes based on Word, email, face-to-face and prolonged conference calls as standard practice.  I love lawyers, but most legal departments have one tool in their toolbox.  Have a sophisticated contract worth millions?  Use the 20 year lawyer.  Need low risk, template driven procurement?  Use a 20 year lawyer.  Non-disclosure agreement?  Use the 20 year lawyer. 

So how do you attack this problem?  Some organizations are at a maturity level or business reality level where a big bang transformation would work and bring value.  But many organizations are not ready.  So what about them?  Like all things, let’s look at an analogy.  The classic story is the boiling toad.  Warning – I don’t advocate doing this in real life and I have no idea who originated the story, but it’s a good description – hypothetically only.  So the story is that if you put a toad into boiling water, it will jump out right away (smart toad).  But if you put it in cool water and slowly raise the temperature over time, it will stay in the water without ever noticing the difference. 

What does this look like in business?  Here are some simple ideas:

  • ·         Make it Easy

                Pick the low risk item no one likes to do.  Non-disclosure agreements, or low cash-value procurements are typical places.  The 20 year staff all want to be doing strategic, business focused projects and not “the other stuff”.

  • ·         Data Entry is A Different Job

Don’t buy a tool to save time and create efficiency, but then staff the data entry with your 20-year experienced team.  I hate to be negative, but this never works.  People have accepted that they need to do their own check-in at airports, but entering in 55 fields of data is not the best use of their time.  Buy the tool, create the process and use different resources, internally or externally to police it and get the value out it.

  • ·         Build on Success

                 Once you pick the pilot activity, business unit or whichever, make sure it works well and cite that as you go up the value chain or expand across your organization.  This does work.

When it comes to these activities, you have to acknowledge it’s different and could be better.  But the approach is very important.  Transformation is scary to some people.  So sometimes, stealth transformation works better. 

 

 

 

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