Case N° 2

CONTRACT MANAGEMENT

 

Business Case

Our customer had a weakness in his paper contract management. In a geographically delocalized sourcing organization, the contracts were lost, or access was difficult, contract terms were not properly used, there was no easy access to renewal schedules so they were not happening when they should. Storing contract copies in multiple locations did not facilitate the contract’s version update. In some cases our customer needed to contact the supplier to get contract information. Finally, due to the independence of Sourcing divisions it was difficult to have accurate knowledge about all the contracts agreed for a specific product category or with a vendor.

This situation generated:

• time and revenue loss.

• negative impact on procurement event outcomes.

• poor audit feedback.

 

Requirements

We were asked to deliver an easy and flexible solution to store contracts and to provide an accessible and easy updatable contract database to stakeholders throughout the organization.

 

Solution

We designed an online database and used a simple and practical repository system easy updatable by any stakeholders with access right. We implemented the data base with our customer’s IT department and delivered a turn-key solution.

 

Value created

This project is a basic element of Sourcing Policies. The easy access capabilities for the organization, minimized contract risks and increase compliance without any cost increase. Online storage, combined with search options, allowed cross vendor or cross commodity analysis and thus increased negotiation leverage. Value was also evidenced in audit results and non value added workload.