Case Study: Contract Management

Case Study:

Hiring a Contract Management Consultant to Mitigate Risk and Improve Contract Compliance

Client Background:

A mid sized service-oriented organization with multiple business units and a diverse vendor base.

Challenge:

The organization had numerous contracts with suppliers, but lacked a centralized system to track and manage them. The lack of visibility into contract terms, expiration dates, notice periods, and many other contract terms led to missed opportunities to renegotiate contracts and increased risk of non-compliance. The organization sought to improve its contract management process to better track contracts and ensure compliance.

Solution:

The organization hired Procurement Counsel to assess its current contract management process and identify areas for improvement. We consultant conducted a thorough analysis of the organization's contracts, processes, and systems.

Based on the findings, the we recommended the following initiatives to improve contract management:

1. Centralized Contract Management System: We recommended implementing a centralized contract management system to store all contracts and related documents. This system would allow for better tracking of contract terms, expiration dates, and SLAs. We proposed an RFP process to identify the tool best suited for the customer.

2. Contract Standardization: We identified that the organization had a variety of contract templates and recommended standardizing the templates to ensure consistency in contract language and terms.

3. Contract Review Process: We recommended establishing a contract review process, which included a Delegationo of Authority, to ensure that all contracts were reviewed and approved by the appropriate parties.

Results:

The recommendations were implemented over a six-month period, resulting in significant improvements to the organization's contract management process:

1. Centralized Contract Management System: The organization implemented a centralized Contract Lifecycle Management tool, providing real-time visibility into all contracts and related documents. This system allowed for better tracking of contract terms and broad reporting.

2. Contract Standardization: The organization standardized its contract templates, resulting in consistency in contract language and terms with a new focus on utilization of their house paper.

3. Contract Review Process: With the assistance of the newly implemented CLM, the organization was able to standardize contract workflows between sourcing, finance, legal, and the stakeholder ensuring that all contracts were reviewed and approved by the appropriate parties before being signed.

Overall, the organization achieved better contract tracking, and reduced the risk of non-compliance. The organization was able to effectively renew and issue notices of non renewal, and renegotiate contracts using real-time visibility into contract terms and expiration dates, resulting in cost savings.

Conclusion:

Procurement Counsel was able to help organization improve their contract management process, resulting in better contract tracking, and reduced risk of non-compliance. Our expertise and experience can identify areas of improvement and develop customized solutions to meet an organization's specific needs. The benefits of a project like this can be significant, resulting in cost savings both immediately and in the long term. Call Procurement Counsel today to see how we can help you get a handle on your contracts.