Today, between 60% and 80% of all business-to-business transactions are governed by a formal agreement, yet inefficient contract management can mean significantly higher costs, customer dissatisfaction, missed savings opportunities, and regulatory violations. These risks have led to a heightened interest in automation of contract management processes, putting the spotlight on contract life cycle management, also known as Enterprise Contract Management (ECM). However, until now, there has been...
Today, between 60% and 80% of all business-to-business transactions are governed by a formal agreement, yet inefficient contract management can mean significantly higher costs, customer dissatisfaction, missed savings opportunities, and regulatory violations. These risks have led to a heightened interest in automation of contract management processes, putting the spotlight on contract life cycle management, also known as Enterprise Contract Management (ECM). However, until now, there has been no comprehensive resource available on this topic.Enterprise Contract Management addresses all the questions surrounding ECM, ECM solutions, and the project, change, and risk management considerations required to ensure successful implementation. This concise text will help your organization manage the challenges of the contract life cycle and the key success factors and pitfalls in a typical ECM solution implementation.
List of Tables xiiiList of Figures xvForeword xviiPreface xxiAcknowledgments xxixAbout the Author xxxiAbout IACCM xxxiiiWeb Added Value xxxvBasic Concepts, Fundamentals, and TheoryContracts 3Overview 3Evolution of Contracts 4Definition of a Contract 5Types of Contracts 6Fixed-Price Contracts 6Cost-Reimbursable Contracts 8Partially Defined Contracts 8Letter Agreements 9Summary 9Enterprise Contract Management 11Overview 11Definition of Enterprise Contract Management 12The Contract Life Cycle 12Contract Conception and Creation 13Contract Collaboration 14Contract Execution 14Contract Administration 14Contract Closeout and Analysis 15Challenges in the Contract Life Cycle 15Current State of Contract Management 17Impact of Poor Contract Management 19Summary 20Enterprise Contract Management Solutions: An Introduction 23Overview 23What Is an ECM Solution? 24How Does an ECM Solution Address the Challenges in the Contract Life Cycle? 25Is an ECM Solution Right for My Organization? 27Which ECM Solution Is Right for My Organization? 30Content and Document Management Capabilities 30Contract Authoring and Configuration Capabilities 31Collaborative Contract Development Capabilities 32Resource Planning Capabilities 32Performance and Compliance Management Capabilities 33Integration and Services Capabilities 33Other Criteria 34What Are the Current Trends in the ECM Solution Market? 35Where Will This ECM Solution Fit in My Organization? 37What Benefits Can I Expect from This ECM Solution? 39Summary 41Enterprise Contract Management: The Vanguard of Sustained Compliance 43Overview 43Compliance: Past, Present, and Future 46Definition of Compliance 46Evolution of Compliance in Modern Business 47The Current State of Compliance 48The Future of Compliance 51Sustaining Compliance 54A New Vision of Compliance 54The "Ripple Effect" 56Components of Sustained Compliance 58People 58Process 59Technology 60Role of Technology in Achieving Sustained Compliance 61The Relationship between Technology and Compliance 61How Does Technology Address Compliance Requirements? 63Technology Solutions That Are Being Used to Address Compliance Issues 66ECM and Compliance Management 71Procedural Compliance 71Contractual Compliance 73Regulatory Compliance 73ECM Solutions Address Sarbanes-Oxley Requirements 74ECM Solutions Address Common Requirements of Multiple Regulations 78Lessons Learned from Initial ECM Solution Implementations 82Summary 85Enterprise Contract Management Maturity Model 89Overview 89The Problem Statement 90Maturity Models 91An Overview of Maturity Models 91Key Components of Maturity Models 93ECM Maturity Model 96Objectives of the ECM Maturity Model 97Scope of the ECM Maturity Model 99Description of the ECM Maturity Model 99Progression to Higher ECM Maturity Levels 106Shift in Focus and Improvement in Process Capability 111Summary 113ECM Maturity Appraisal Method 114Overview 114Case Study 130Step 1. Planning the Appraisal 131Step 2. Preparing for the Appraisal Effort 132Step 3. Execute the Appraisal 133Step 4. Reporting and Analysis 138How ECM Solutions Assist in Progressing to Higher Maturity Levels 140Summary 142ImplementationImplementation Methodologies 147Overview 147Six Sigma 148Origin of Six Sigma 148The Basics of Six Sigma 151Key Themes of Six Sigma 153DMAIC: The Key to Six Sigma Methodology 154Benefits of Six Sigma 154Should ECM Implementation Be a Six Sigma Project? 156Results or Business Benefits Criteria 157Feasibility Criteria 158Organizational Impact Criteria 159The ECM Solution Implementation Road Map Using Six Sigma 160The DMAIC Process: Key to Six Sigma Methodology 160D-Define 160M-Measure 162A-Analyze 162I-Improve 164C-Control 164Design for Six Sigma Approach 165I-Identify 167D-Design 168O-Optimize 168V-Validate 169The ECM Six Sigma Team 171ECM Project Champion 172Master Black Belts, Black Belts, Green Belts, and Yellow Belts 173The Steering Committee or Leadership Council 174Alternate ECM Solution Implementation Methodologies 175The IDEAL[superscript SM] Model 176I-Initiate Phase 176D-Diagnose Phase 178E-Establish Phase 179A-Act Phase 179L-Learn Phase 180Generic ECM Solution Implementation Methodology 181Preproject Preparation Phase 181Project Planning Phase 182Analysis and Design Phase 183Configure, Load, and Test Phase 185Go-Live and Support Phase 186Summary 187Change Management Considerations 189Overview 189The Change Champion 191Organizational Change Management Elements: Key to Success in ECM Solution Implementations 192Establish a Sense of Urgency 193Create a Guiding Coalition 194Develop a Shared Vision 195Communicate the Vision 195Empower Employees for Broad-Based Action 197Generate Short-Term Wins 197Consolidate Gains and Produce More Change 199Anchor Change in Corporate Culture 199Summary 200Risk Management Considerations 203Overview 203Types of Risk 203Program Risk 204Project Risk 204Functional Risk 205Resource Risk 205Business Risk 205Technical Risk 206Risk Management Process 206Summary 208Integrating an Enterprise Contract Management Solution 209Overview 209The Business Imperative for an Integrated ECM Solution 211The Extended Enterprise 211The Agile Enterprise 213Globalization 214Technology Advancements 215Outsourcing 216Era of Compliance 217Building a Business Case for Integrating ECM Solutions 218Costs 219Risks 220Benefits 221Opportunities 222Key Financial Metrics 225ECM Solution Integration Approaches 226Information-Oriented Integration Approach 226Business-Process-Oriented Integration Approach 228Services-Oriented Integration Approach 231Portal-Oriented Integration Approach 233Ten Steps to Integrate ECM Solutions 235Step 1. Understand Business Goals and Objectives 236Step 2. Align Resources and Organization with Enterprise Integration Strategy 238Overview 239Scope 239Stakeholders 239Integration Strategies 239Standards 240Risks 242Step 3. Define Scope of Effort and Outline Metrics 242Key Metrics in Scope 243Step 4. Establish Clear Lines of Ownership and Accountability 244Step 5. Develop Functional Specifications 245Step 6. Develop Technical Specifications 249Step 7. Configure and Construct 250Step 8. Test Integration and Perform Cutover Tasks 251Integration Testing 252System Testing 252Regression Testing 253User Acceptance Testing 253Performance Testing 254Load Testing 254Stress Testing 254Cutover Tasks 255Step 9. Deploy Pilot Integration 255Step 10. Measure Success and Support Continuous Improvement 255Vision of a Fully Integrated ECM Solution 256Summary 260Metrics: The Catalyst to Achieve and Maintain Success 263Overview 263Metrics 264Defining Metrics 264Choosing Metrics 264Implementing a Metrics-Based Program 265Metrics in ECM 266Adding Value to the Contracting Group 266Adding Value to Business Functions 267Adding Value to the Organization as a Whole 268Summary 269Sustaining Excellence beyond the Implementation 271Overview 271Top Ten Success Factors and Pitfalls in ECM Solution Implementations 272Sustaining Success beyond Implementation 272Summary 280Regulations at a Glance 282List of Abbreviations 291Bibliography 293Index 295