How to Create a Data Driven Contract Management Process
•
2 j'aime•2,861 vues
Contracts are not immune to the drive for greater efficiency, and data is the fuel of efficient operations. In this session, you'll hear actionable advice for how Chief Legal Officers, legal operations professionals and procurement officers can use insights from data to drive improvements in their contracting processes, including faster cycle times, greater process compliance, and lower costs.
Recommandé
Recommandé
Contenu connexe
Tendances
Tendances (20)
Similaire à How to Create a Data Driven Contract Management Process
Similaire à How to Create a Data Driven Contract Management Process (20)
Plus de Apttus
Plus de Apttus (20)
Dernier
Dernier (20)
How to Create a Data Driven Contract Management Process
- 1. © 2018 Apttus Corporation #AccelerateMO Jason Smith, Lauryn Haake, Molly Tynan Perry, Michael Pisias May 15, 2018 How to Create a Data Driven Contract Management Process
- 2. © 2018 Apttus Corporation Molly Tynan Perry Chief Operating Officer Office of Legal and Administrative Affairs Michael Pisias Director of Operations & Technology Solutions Office of Legal and Administrative Affairs Lauryn Haake Managing Director HBR Consulting
- 3. © 2018 Apttus Corporation With core capabilities in advisory, managed services and software solutions since 1975, HBR is a trusted advisor to leading law firms, law departments and corporations Hewlett Packard Enterprise was formed November 1, 2015 when HP separated into two Fortune 50 companies
- 4. © 2018 Apttus Corporation The Journey of CLM at HPE Where we started • Sub-optimal resource utilization and response times • Functionality gap relating to public sector CLM • Limited data to identify issues and drive improvements Where we are now • Improved analytics • Improved cycle times • Public sector capability added • Improved resource utilization Solution RefineMeasureSolutionAnalysisOpportunity Where we’re headed • Expand capabilities • Integrated playbook • Automation • Scoring • Improve user experience
- 5. © 2018 Apttus Corporation • Focus on high VALUE deals • Focus on responsiveness • Define high value • Measure time spent per contract and value • Measure time to respond to sales requests 2016 HPE’s Data Driven CLM Progression • Focus on WHERE the work was done • Transition work to lower cost resources (“Agility Center”) • Define targeted workloads and contract types • Measure contracts transitioned vs. target • Measure cost per contract Design how we did it Measurements how we checked our work Outcome the Focus on HOW the work is done • Improved templates, negotiation guidelines • Evaluate automation • Continuous improvement in time and cost • Qualitative metrics, e.g. client satisfaction 2017 2018
- 6. © 2018 Apttus Corporation 2016 Data Driven CLM Progression - Outcomes Target 5% decrease Actual 10% 2017 2018 RFX SOA FMA SOW CPA AMD NDA ELA Cost per ContractResponsiveness Request Response Time Understands our Business Demonstrates Legal… Demonstrates Ethics &… Strategic & Proactive Responsive Enables our Business Solves Problems Effectively Communicates Overall Customer Satisfaction Rating Oct Nov Dec Jan Feb Mar Apr May AC Peneration Rate ClientSatisfaction Efficiency 0 200 0 2000 <$250K $250K-1M $1-5M $5-50M $50M+ Contracting Hours Volume and Value # of Contracts Hours Avg Hours by Contract
- 7. © 2018 Apttus Corporation Next Steps in the Journey • Expand capabilities • Integrated playbook • Automation • Scoring • Improve user experience • Move to Azure • Do more work “in the tool” • Apttus Intelligent Import © 2018 Apttus Corporation
- 8. © 2018 Apttus Corporation Six sigma approach Define Measure AnalyzeImprove Control • What problem are we solving? • How significant? • Symptom vs. root cause • SMEs agree on problem and perform analysis • Apply techniques • Data Analysis (quantitative) • Process Analysis (qualitative) © 2018 Apttus Corporation
- 9. © 2018 Apttus Corporation© 2018 Apttus Corporation Data and Process • SMEs identify suspect issues from the data • Data and process analysis are of equal value • This is not the point of taking action Discrete data Can only take certain values (cannot have ½ person) Continuous data Any value in a range (someone’s height) Suspect Issues Suspect Issues
- 10. © 2018 Apttus Corporation© 2018 Apttus Corporation Spotlight on root cause List of Suspect Issues List of Suspect Issues Combined list • Look for commonality • Strongest results when Data and Process corroborate 5 Why • Drill down on each suspect issue until you cannot go any further. • Root causes often cross multiple suspect issues
- 11. © 2018 Apttus Corporation© 2018 Apttus Corporation Results: Simplified government contract accounting Finding Root Cause • Issue: Gov’t contracts difficult to value, report and manage • Action: Six Sigma data and process analysis 17 problem statements 5 root causes 8 processes improvements 1 IT project Impacts • Faster quote response time • Reduced time to risk assessment • Greater focus on the critical few issues • One IT project modifying Apttus CLM
- 12. © 2018 Apttus Corporation© 2018 Apttus Corporation Defining Your Drivers… Make Sure It’s Data! Quantitative • Numerical in measurement • Structured data • Statistical analysis and objective conclusions Bias • Reveals judgments, opinions and predisposition of the one requesting, interpreting or providing the data • Draws conclusions and collects data to support • Heavily skewed for error Qualitative • Approximates or characterizes • Can be observed but not measured • Deals with language and descriptions © 2018 Apttus Corporation
- 13. © 2018 Apttus Corporation© 2018 Apttus Corporation Explaining Change Management Change management and “maintenance” are critical to effectuate change Plan and invest in the change management stage • Vision for change • Senior leader buy-in and sponsorship • Understand the culture • Stakeholder analysis tool • Communicate the change • Improve adoption by showing “what’s in it for me” • Implement your plan • Stay with it © 2018 Apttus Corporation
- 14. © 2018 Apttus Corporation How to Create a Data Driven Contract Management Process 1. Identify the problem you are trying to solve 2. Identify your sources for reliable data 3. Identify your data as qualitative or quantitative 4. Establish your data analysis strategy 5. Capture your data! 6. Evaluate root causes 7. Form a team with steady sponsorship to work on solutions 8. Create change management plan 9. Create lifecycle plan (Make the change!) 10. Establish continuous improvement methodology and start back at #1. © 2018 Apttus Corporation
- 15. © 2018 Apttus Corporation© 2018 Apttus Corporation Contract Management Maturity Model *Martin, Kingsley (2016) Contract Maturity Model (Part 1). From One-Off Contracting to Portfolio Management. Retrieved from http://legalexecutiveinstitute.com/contract-maturity-one-off-contracts/ Ad hoc Basic Standardized Systematized Optimized One-off Centralize; get control Streamline; simplify Inter-connect; modularize Plan, learn, adapt, embed People Independent Informal Planned Oversight & Accountability Lawyers and contract managers work autonomously Informal contract teams Individuals tasked with template development and maintenance Stakeholder involvement; tactical planning Training and awareness Management team oversight Formal strategic contract plan and optimization Establishment of center of excellence; focus on continuous improvement Process Pre-signature • Request/Draft • Negotiate/Approve Post-signature • Managed/Audit • Optimized No contract request process Contracts stored in multiple systems Informal request process (e.g., email) Contracts collected into a single repository Online contract request Contracts managed; standard contract profiles Automated template selection and routing; expedited contract review Contract obligations extracted and tracked Automated selection of standard terms; limited exception handling Contracts performance metrics monitored
- 16. © 2018 Apttus Corporation Lifecycle Overview CLM is the proactive, methodical management of a contract from initiation through award, compliance and renewal
- 17. © 2018 Apttus Corporation© 2018 Apttus Corporation HBR Lifecycle Plan Maturity Level Adoption Activity in Apttus Stage Contract Request Author Negotiate Approve Execute Obligations Amend Report Renew/ Disposition Ad Hoc Any contract as Other Party paper No template Via email Via email Offline “wet” signature Manually; not centralized No notices Simple list No notices Basic Organized by contract type No template Via email and centralized users Via Salesforce Offline “wet” signature Track dates that can be seen Copy from original Salesforce reporting available Copy from original (for renewals) Standardized Contract types mapped to Wizards Basic X- Author templates Measured by cycle time Salesforce approvals with dynamic stops Signature processes standards Clause exceptions and keywords Specific templates for amendments Design dashboard by profile and add to home page Automate auto-renewal date extension Systematized Specialized workflow by type Dynamic X-Author templates Triggers for approval and different workflow Advanced approvals with dynamic stops Electronic signature integration Clause exception materiality and routing Pre-emptive email alerts to users Scheduled reports on KPIs emailed to users Automate renewal request process Optimized Self-service generation Dynamic X-Author templates and clause library Systematic business process and procedures Delegation and out of office approvals No wet signature; all electronic Out of scope: Use artificial intelligence to track Self-service generation DIY reports (requires training/ license) Automation of renewals from CPQ
- 18. © 2018 Apttus Corporation© 2018 Apttus Corporation HBR CLM Reference Model© • A tool for clarifying the end to end process for contract lifecycle management • Combines principles of information governance, program management and commercial contracting • Establishes a standard to facilitate the creation and governance of an organization’s CLM program INVENTORY Identifying the potential elements, actors + catalysts PROCESS Creating the means for the contractual relationship FINALIZE Completing the last actions of the contractual relationship MEASURE Establishing ranges + limits ENACT Activating utilizing + monitoring obligations
- 19. © 2018 Apttus Corporation© 2018 Apttus Corporation Reference Model Activities INVENTORY •C-Discovery •Policy Collection •Systems Analysis •Regulatory Review •Compliance Audits MEASURE •Risk tolerance •DOA Policy •Cycle Time KPIs •Signature Policy •Records Retention needs •Procedural Gaps •System Fit Gap PROCESS •Create contract architecture •Develop playbook •Develop negotiation procedures •Establish SLAs and new KPIs •Deploy systems ENACT •Compliance and auditing •Create notifications •Report •Amend, Renew, Expire, Terminate •Vendor onboarding FINALIZE •Closing duties •Archive or dispose
- 20. © 2018 Apttus Corporation Drive Continuous Improvement with the Apttus Intelligent Enterprise Contract Management Maturity Model™ Reports, alerts and configurable workflows drive correct actions. All contracts in one searchable, globally compliant repository. Full Automation Perfect Execution Control of Language Analysis for Action Accessibility and Compliance Draft with 100% approved playbooks and negotiate with full visibility to changes. End users enjoy contract self-service. Obligation management ensures all tasks and rights are handled by the correct staff. Conditional and optional obligations are triggered accurately. Integration across functions and systems enables data-driven insights, superior business strategies and continuous improvement of practices. INCREASINGROI MAXIMIZE VALUE WITH ARTIFICIAL INTELLIGENCE • Conversational interfaces enable contract actions via text, speech and app. • Apttus Intelligent Import™ scans and understands incoming contracts. • Predictive contracting reduces risks and cycle times.
Notes de l'éditeur
- Jason open
- Introduction Jason to intro team Journey of CLM at HPE (3 step chevron) Where we started What we changed (from last presentation) What we have coming Soft segue: data is the only way to get where we’re going…. Background for the session: Defining Your Drivers (Data is more than one thing) Quantitative: Why this is such a challenge for so many Qualitative: How to avoid the pitfalls of opinion Qualitative story We had a shift to high value deals a year ago (recap). (Molly to tell us what to include from Jack) Focus on shifting work to appropriate location Agility center or onshore (Jack Lee’s data) Design, measurement and outcomes. What does the process looks like to support the shift. (Process map??) Quantitative Formation of user group from diverse practice areas. Outputs from the group. (Lauryn to sanitize to Apttus generic; not HPE specific) Utility gaps identified. (Dan Duryea can provide) Shift to Azure version Expected benefits and how we will implement. Bifurcated Qualitative and Quantitative path Sources for each (User Community and Raw Data). Suggestions on how to identify these to the audience Qualitative and quantitative continuous improvement Best practices on how to tactically support this “One Thing”…if you only remember one thing from this session, it should be X
- Jason
- Molly and Michael Soft segue: the only way to get where we’re going is through Data….
- Molly
- Molly Response target < 36 hours, actual <20 hours, total turnaround time reduced by 10% during FY16
- Molly and Michael
- Michael
- Michael Link to issues we addressed: (1) too much time on small deals, and (2) issues with CLM for public sector contracts Discrete, good bad, yes no. Failed or not. Great for check sheets. Continuous, measured on a scale, can be broken down into pieces (project, tasks, etc..). I’m not going to give a lecture on the types of data. What is important is that use our data to uncover key symptoms. Our initial data analysis often encourages people to jump to a solution. This is a distraction. Initially we have just a symptom. For example we had a call center representative that was responsible for 95% of all keyboard shipments in Brazil. The immediate reaction as to confront her. I stopped all action and continued through the process to root cause after reviewing all of our suspect issues. We discovered that IT had to pick a code for outbound shipments and randomly selected her employee code for all web orders. Let the SMEs come up with their list of suspects that will be compared to process analysis and drilled into for root cause.
- Michael Now that we have talked about both data and process lets take a look at how we combine the
- Michael One example of reducing waste and improving efficiency is a project to help us manage government contracts. Anyone who deals with government contracts knows a deal worth a $1B is actually worth $0 until you get a “Task Order” So how does a system handle the management of the valuation of government contracts? How do you make sure you don’t miss out on approved funding if you don’t know the residual value of a contract? By performing process and data analysis we identified 5 root causes driving 17 problems. If we had just solved symptoms we would have chassed 17 individual problems and created 17 solutions. Instead we found 8 processes that need clarify and simplification and launched 1 modification to our CLM tool Apttus. When we were done we had made four key improvements:
- Jason and Lauryn: With over 3 million data points available in Apttus, not to mention the other solutions in place that support the end to end contract management process, it can be difficult to separate the actionable data from the noise. It’s very important to validate that your data capture strategy correctly identifies a data point as quantitative, qualitative, or something else entirely. Quantitative data is a challenge for many due to the lack of consistent data to measure. A certain amount of inference is often needed to get started. If you are in a position where you don’t have normalized data, what assumptions can you truly make to allow for a “go forward” strategy to quantitative measurements? Be prepared for the uninformed pushback, i.e. “We used to do it faster when we didn’t have a system”. Qualitative data is naturally subjective, but the validity of the subjectivity must stand up to scrutiny. It is acceptable to ask for user opinion and apply a scale, but be prepared for outliers. Example: in a recent project, survey participants were asked to rate 10 topics on a scale of 1 to 5. When the results were provided, answers ranged from 0 to 2.5 to one person who wrote 4 1/5. Apply a scale and use it to help eliminate errors in responses that heavily represent bias. Bias is the “court of public opinion” and can kill a data driven contract process. Bias is very difficult to eradicate once it is introduced to a data strategy, so take great care to avoid it. For example, evaluate what subjective qualitative measurements are most at risk for bias and discuss as a team. Either the scale or the interpretation of this data can be adjusted to avoid bias.
- Jason and Lauryn
- Lauryn with inputs/color commentary from all
- Lauryn
- Lauryn
- Lauryn
- Jason In our 10+ years of experience delivering contract management solutions to the world’s mid-sized organizations and the who’s who of the Global 1000, we’ve developed the five stages of contract management maturity. As customers move up the maturity model, return on investment increases. The stages are: Accessibility and Compliance. This is achieved with all contracts in a single global repository. Typically our customers begin with this step so they can search for and organize contracts, comply with global rules, and get confidence and excitement for further steps. Almost all of our customers do this. Analysis for Action. The next step is to put reporting and workflows in place. About ¾ of Apttus customers are doing this. The repository enables alerts for individual contracts and reports on sets of contracts, covering any aspect of the contract: key dates for renewals, cycle times, behavior of individual users, clause-level reporting, trends and much more. We also have workflows that route the information and actions correctly, and based on dynamic conditions. Control of Language. The third step in maturity, often implemented along with the second step, is automation of contract authoring. Self-service wizards can be set up to allow users to generate their own accurate contracts without creating any risk. And authoring and negotiation tools, built in Microsoft Word, let attorneys and legal ops professionals work with total access to approved language and full visibility to every change and every version. This saves time and improve negotiating outcomes. About ½ of companies have made it here—though even those companies that haven’t are happy with the value they are getting from the lower steps on this pyramid. Perfect Execution. In Stage 4, you turn the contract into instructions for the rest of the business with Obligation Management technology. What this does is take all the contracts terms and sends them to the right people for action. This includes options and conditional “triggered” events. In other words, your contracts go work for you automatically: It’s as if each contract is a piece of software that kicks off as soon as the contract is complete. This is true 21st-century business process, creating real leading-edge efficiency and risk reduction. About a third of Apttus customers have started down this path. Full Automation. Want to run a true digital business? That means all your systems are running together, in concert with each other. Apttus offers Contract Management on a common platform with Quote-to-Cash and Supplier Relationship Management applications, and we have experience connecting to CRM systems like Salesforce and Microsoft Dynamics, and have integrated our software to every major ERP including Oracle and SAP hundreds of times. Most Apttus customers have integrated Apttus Contract Management to at least one system, however this is the top of the pyramid because total end-to-end automation is the end-state vision. Companies with this vision are going to lead their industries because they will be simply more efficient, more responsive to customers, able to operate at lower cost, and less exposed to foreseeable risks. The contract is at the center of this transformation vision. Increasing ROI. As you add more capabilities and more process, you will capture ever more value from your contracts. Even the first step on its own offers positive ROI—moving up from there just increases your ROI further. And you can get even more value from every stage of contract maturity with artificial intelligence. Max Value with AI: Apttus deploys artificial intelligence across our customer journey. We offer conversational interfaces for users to request contracts, find contracts, approve contracts and more using text, chat, and apps—AI provides the logic to provide the correct response to your needs. We also offer Apttus Intelligent Import™, which scans and understands third-party and legacy contracts so you can understand every detail about even those contracts you don’t create in Apttus. This capability works for a single contract or for 1000s of legacy agreements. And we offer predictive contracting to help authoring and negotiation: Recommending the right language to reduce risk or speed up cycle times.