Late last month, Sean Delaney, Determine’s VP of Sales, and Mike Behne, VP of Professional Services, presented a webinar with IACCM on taking contract management “Beyond the Expected.” During that event, Sean and Mike discussed how real-life challenges morph into ideas and concepts for contract management innovations. One of the most important areas of focus for companies that want to manage uncertainty, mitigate risk and eliminate obstacles to competitiveness is implementation. After all, the success of any CLM implementation will play out over time in terms of adoption and value creation.
How to make friends and influence outcomes
Procurement does not have an easy job. We function as the spending conscience of the enterprise. When a contract is going to be awarded, we make sure a careful selection process is followed and that every specification or requirement associated with additional cost earns its place. We ensure that incumbent suppliers deserve renewed business, and push all suppliers to perform their best on behalf of the company. As important as all those things are, it can often leave procurement looking like the “skunk at the garden party” from an internal procurement stakeholder perspective.
When you think about why a company would invest in a contract lifecycle management (CLM) solution, the first things that come to mind might include improved governance and agreement administration. But is that it? If the ROI of CLM is limited to better dotted I’s and more neatly crossed T’s, the effort to select and implement a solution hardly seems worth it.
As we expand the impact of procurement beyond savings, one of the most frequently cited objectives is process efficiency. In theory, if procurement can help the company execute internal processes more swiftly, they can… something, something, something (?). Process efficiency is good, and savings are good. But neither will have any real impact if we don’t understand why we are driving them.
Having been in procurement for a while, I’ve seen a lot of changes take place over time. Procurement M&A — Mergers, acquisitions, rebrandings, etc. are the commercial equivalent of births, deaths, and weddings. They are the facts of life. That said, it is one thing to observe a change in the market, and it is another thing entirely to experience it firsthand.
If you’re anything like me as a procurement practitioner, you think of our end-to-end process in a linear fashion. It usually starts with spend analysis or some other source of information (budget, ERP, BI system output, etc.) and ends with Contract Management and/or Supplier Performance Management. For us, this is completely logical because the sub-processes that we view as the most “active” portions of procurement – strategic sourcing and negotiation – have been dealt with at this point.