Published on March 11, 2014
Achieve Higher ROI on Your Enterprise Contract Lifecycle Management Solution facebook.com/perficient twitter.com/Perficientlinkedin.com/company/perficient
2 Perficient is a leading information technology consulting firm serving clients throughout North America. We help clients implement business-driven technology solutions that integrate business processes, improve worker productivity, increase customer loyalty and create a more agile enterprise to better respond to new business opportunities. About Perficient
3 • Founded in 1997 • Public, NASDAQ: PRFT • 2013 revenue ~$375 million • Major market locations throughout North America • Atlanta, Boston, Charlotte, Chicago, Cincinnati, Columbus, Dallas, Denver, Detroit, Fairfax, Houston, Indianapolis, Los Angeles, Minneapolis, New Orleans, New York City, Northern California, Philadelphia, Southern California, St. Louis, Toronto and Washington, D.C. • Global delivery centers in China, Europe and India • >2,100 colleagues • Dedicated solution practices • ~90% repeat business rate • Alliance partnerships with major technology vendors • Multiple vendor/industry technology and growth awards Perficient Profile
4 BUSINESS SOLUTIONS Business Intelligence Business Process Management Customer Experience and CRM Enterprise Performance Management Enterprise Resource Planning Experience Design (XD) Management Consulting TECHNOLOGY SOLUTIONS Business Integration/SOA Cloud Services Commerce Content Management Custom Application Development Education Information Management Mobile Platforms Platform Integration Portal & Social Our Solutions Expertise
Introduction 5 Amish Shah Solution Director, Enterprise Contract Lifecycle Management Amish has ten years of experience as an operations and information technology consultant. His primary responsibilities include managing enterprise-level contract management implementations and providing thought leadership around each aspect of the solution development lifecycle.
Placeholder Slide for Polling Questions • Polling Questions (Yes/No): 1. For most organizations, a new contract gets created no more than every 6 minutes 2. The cost of implementing contract improvements per contract over 5 years is less than the cost of a brand new iPhone 6
Agenda I. Enterprise Contract Lifecycle Management 30 min. (ECLM) and ROI Fundamentals II. Perficient’s ROI Calculator for ECLM 20 min. III. Summary and Next Steps 10 min. 7
Objectives Discuss the business value of contracting efficiencies and maximizing “return on contracts” Provide a tool, literature, and references for getting started on establishing the business case for ECLM 8
Perficient’s ECLM Experience Services Current State Operations Assessment & “Blueprinting’ ROI Business Case Development and Implementation Planning Contract Inventorying, and Template Rationalization Requirements Definition and Software Selection ECLM Systems Design & Implementation • Project Management • Configuration/Customization • Integration • Data Migration • Testing • Training & Change Management Case Studies & White Papers Best Practices for Authoring a Contract through an Enterprise Contract Management System When choosing a contract management system, it is important for the company evaluating different solution offerings to consider software that provides flexibility in authoring a contract. This flexibility allows an organization to reduce the time and cost of creating contracts and increase throughput of contracts with external parties. Enterprise Contract Lifecycle Management for Healthcare Systems Led the client in training all hospitals on how to author contracts through a best-of-breed ECLM solution. Rollout included approximately 300 users and 3000 contracts. 9
Our Qualifications Value Proposition Dedicated practice with more than two dozen practitioners and experience with a vast number of customers and industries. Understand “nuances” of the IBM Emptoris solution minimizing “surprises” / risks Relationships with IBM Emptoris senior management, with influence on product roadmap strategy Library of solution accelerators for planning and implementation (e.g., future state blueprints, requirements, software selection, roadmaps) Select ECLM Clients 10
ECLM Maturity Levels 11 • Contracts are created using MS Word and tracked using Excel or in Spreadsheet format. • Contracts are stored in white paper format in filing cabinets. • Contracts are not easily visible and search/sort/retrieval takes a long time • Contracts are created using MS Word and tracked using Excel or in Spreadsheet format. • Contracts are stored in electronic format in a single data repository. • Contracts are visible to a larger group of people and can be searched/sorted/ retrieved • Contracts are created using standard clause templates and contract templates. • Contract Authoring process makes use of approval rules and workflow events • Contracts are stored in electronic format in a single data repository. • Contracts are created using standard clause & contract templates, approval rules, workflow events and triggers etc. • Contracts are stored in electronic format in a single data repository that allows reporting. • KPIs are defined and used in analysis • Contracts are created using standard clause & contract templates, approval rules, workflow events and triggers etc. • Contracts are stored in electronic format in a single data repository that allows searching, sorting, analysis & reporting. • ECLM solution is integrated with the ERP system & other backend systems Level I Level II Level III Level IV Level V Filing Cabinets Data Repository Templates & Workflow Analysis, Monitoring & Reporting Integration & Executive Dashboard RiskMitigation Standardization, Compliance, Efficiency High High Low
The ROI of ECLM: Getting Started 12 Medical AffairsEurope SS&P RDQ Corp. Law Europe • CDA • MSA • GPA • SWL • SET • CDA • CSA • MSA • GPA • SWL • CSA • HON • QUA • GPA • IML • CDA • RGA • CTA • CTS • TER • RzEC • DCA • QUA • MTA • GPA • LIC • CDA • QUA • MTA • CSA • AAA • CSA • M&A • CTA • CTS • HOT • MUE • NAS • PRE • CDA • CSA • LOG • CTA? • GOV • MED • COM • CDA • PTU • Consulting Service Agreements • Master Service Agreements • Goods Purchase Agreements • SW License Agreements • Service Agreements • Consulting Service Agreements • Master Service Agreements • Termination of CSA Letter • Data Purchase Agreement • Advertising Agency Agreement • Acknowledgement & Agreement Letter • CDA • RCA • FUA • CSA• CSA • MSA • MLS • SER • SWL • SVC • TEA • PRA • MOA • CDA • SPA • VCA Addition: Stock Administration • SPO • ABA • PRE • STA • CSA (Health Care Pros) • TCL Law Dept. Legal’s Clients Contract Types Enterprise View of Contracting (20K-40K Contracts/Year) Buy-side Procurement of all goods and services (less dev.)
ECLM: On the Critical Path for Closed-Loop Business Processing 13 Use segmentation and market intelligence derived from contract data to move from Spend Analysis to Spend Management Sales Analysis to Revenue Management
Sample ECLM Benefits 14 Cost Reduction – Vendor Compliance/Contract Coverage – T&C Adjustments – Improved Renewal Management – Payment Penalty Reductions – Application Rationalization – Contracting Process Efficiencies Revenue Enhancement – Increased Renewal Rate – Automatic Rate Increases – Increased Effectiveness (Proactive Negotiations; Analytics) Risk Mitigation – Deal – Supplier/Customer – Supply/Product/Service – Enterprise/Regulatory Become a value producer and not just a cost reducer through ECLM!
Sample ECLM Costs 15 Hardware & Software – Software Licenses • Internally Hosted • Externally Hosted • SAAS – Hardware (App & Web Servers) – Software Maintenance – Ongoing Operations/Support Implementation – Template Rationalization – Application Installation & Configuration – Application Integration – Data Migration – Testing – Operational Readiness – Program/Project Management
Sample ECLM ROI Calculation 16 ECLM ROI = $5-10M over 5 years
Client Examples of Tangible Business Value 17 Poor Visibility into Contractual Obligations and Liabilities Resulted in… $10MM of IP royalty payments not collected because contract was not entered into any system – i.e., zero visibility • An internal audit found the contract which was on the desk of an employee who left the organization 6 months prior $20MM of penalties paid due to late payment (6 months) of contractual obligations • 10-20% of company annual profit at risk due to underestimating contractual obligations • A/P understated • Underestimated budgets for future liabilities $4MM overpayment for a service procured without being aware of an existing preferred supplier contract with lower prices
Polling Question Answers 18 1. For most organizations, a new contract is created no more than every 7 minutes YES. Most organizations create between 20,000 - 40,000 contracts annually which amounts to a new contract being created every 3 – 6 minutes. 2. The cost of implementing contract improvements per contract over 5 years is less than the cost of a brand new iPhone YES. The cost for implementing and support an ECLM solution over 5 years is roughly $5.6M, divided by 40,000 contracts = $140 per contract (vs. $199 for the new iPhone 5S).
Enterprise Contract Management Implementation Customer Profile: Leading provider of information technology solutions Challenges/Situation Locating executed contracts and determining expiration dates for existing contracts Lack of a contract request process for over 300 sales individuals to easily enter contract metadata and terms to generate a contract. Inability to track whether/not bid assurance has properly reviewed contract and if appropriate approvals have been received on SOW before being presented to Customer. Contract execution (receiving Customer signature and internal counter-signed signatures) taking too long. Delivered Solution Integration between Onit (contract request system which also holds External Party information) and Emptoris. Ability to draft, negotiate, review, approve, and execute Statement of Works and Change Orders through Emptoris. Internal signatory clauses can be inserted into contract (only by individuals with the correct security) in lieu of e-signature functionality. Business Benefits/Results Better success in end-user compliance with internal policy guidelines Retirement of SOW Central (legacy SharePoint directory holding contracts) Reduced drafting, review, approval, and execution time for contracts Ability to present contract via email directly to external party rather than having to send contract offline (through Outlook) Template governance in place allowing appropriate individuals from Program Sales and Legal to make legal/business language updates.
Where Do ECLM Opportunities Exist? . ECLM Stakeholders ECLM Business Drivers Procurement, Sales & Marketing, IT VP, Sales VP, Marketing Chief Procurement Officer CIO Contract Administrators Enterprise Cost Reduction, Expense Management, Vendor Consolidation Programs Missed Revenue/Spend Targets and/or Leaving $$ on the Table Extensive Lead Times for Obtaining Contractual Commitments Inadequate Infrastructure, Scalability, and Internal Service and Support Legal and Compliance General Counsel Assoc GC Chief Compliance Officer Cost Reduction of Law Department; Downsizing of Legal staff Improve Corporate Compliance with Government Regulations Unfavorable Judgments and Heavy Fines Levied Due to Missing Contracts or Rogue Contracting Due Diligence due to M&A Activities
Perficient’s ECLM Value Proposition Dedicated ECLM consulting practice – Approx. dozen practitioners – Experience with approx. 20 customers Solid ECLM implementation experience – Understand “nuances” of best-of-breed ECLM solutions – Minimizes “surprises” and risks for implementation planning Recognized as “thought leaders” of ECLM – Relationships with ECLM vendors ranging from senior management to line staff – Actively influence product roadmap strategy Extensive library of solution accelerators for ECLM planning – Future state blueprints, requirements, roadmaps, documentation – Minimizes risk, work effort and duration for planning and implementation
Additional ECLM Resources Resources International Association for Contract & Commercial Management (IACCM) National Contract Management Association (NCMA) Analyst Reports (Gartner, Forrester) Links www.iaccm.com www.ncma.com Perficient’s Literature & ROI Tool** Perficient Literature ECLM Overview ECLM Assessment White Papers “Best Practices for Authoring a Contract through an Enterprise Contract Management System” ECLM ROI Calculator ** Denotes thought leadership material that Perficient will provide participants of Perficient’s Roundtable Discussion for ECLM ROI
Thank You! For more information contact: Amish Shah firstname.lastname@example.org | 847-849-7424 www.facebook.com/perficient www.perficient.com www.twitter.com/perficient
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