Case Studies

Contract Management

Blackhawk Network
Contract Management: Visibility and Insights

Managing contract visibility and insights through M&A and rapid growth

Background

A company always on the move, Blackhawk has seen tremendous growth in recent years.  Experiencing organic expansion of the core business to online and mobile eGifts, domestic and international acquisitions in 2012, and ultimately an IPO in April 2013, the organization was looking to improve its ability to manage contracts in a highly regulated environment, and on a global scale.

Challenges

At the time, Blackhawk was using a legacy contract management tool that was not only archaic, it was being sunsetted by the provider.  Using an old system for contract storage of over 10,000 global contracts with only 35 legal and finance users, Blackhawk encountered limitations of the existing system, including constraints on:

  • Managing amendments
  • Limited metadata capability
  • Poor reporting functionality based on bulk reporting
  • No pdfs with OCR
  • Managing the parent / child relationships
  • Writing SLAs or any type of metric data

We weren’t really happy with it because the product itself was just a document repository, and we couldn’t run good reports regarding expiration dates, contract location or exceptions.”
~ Bob Golish, VP, Legal Counsel

Requirements

Blackhawk’s legal team knew the existing system was not working for them, so an internal decision was made to find a replacement relatively quickly. Since the current product primarily served legal, the challenge was totally the General Counsel’s responsibility. But the other key group taken into consideration was finance, since they input a lot of data once a contract is fully executed.

With a lean budget in hand from the executive team, a primary consideration of the contract management selection, led by Nikki Butler, Business System Analyst II, was to make sure the organization could leverage the new system with minimal business disruption. Most people in the organization had also never heard of Contract Lifecycle Management (CLM), but groups like finance and accounting, who were actively involved in the deployment, were open to it. Restricted by Excel, the organization was more than ready for a solution that provides improved metadata, search ability and workflows.

At the heart of it, Blackhawk needed a system that could track pre-execution of a contract. The company was using two separate systems; as a result, an attorney had to manually update what contract version they were on, what contract, what country, etc. What they needed was a robust directory, the ability to pull from a template or a playbook, and just create contracts within a unified solution.  Moreover, Blackhawk was using DocuSign for e-Signatures and an external ERP, and wanted the option to have those integrations built into any CLM platform they chose.

Solution

What set Determine apart is the UI: it was a lot prettier. It was user-friendly, not cumbersome, it didn’t look like an MS Access sheet from 1992. At the end of the day, it was the user interface that made people feel like they could use this.

Determine could deliver a lot of features we needed, like automating an email notification, or telling us on a screenshot or screen which contracts are expiring within 30-90 days. A lot of what was expected to be standard out-of-the-box came with the system.”
~ According to Nikki Butler, Business System Analyst II

During a six month initial deployment with contract load, Blackhawk had a third party manage the cleanup of metadata from the contracts loaded.  Once this was complete, Blackhawk went fully live with the CLM solution within a year and began to see results.

Results

After going live, Blackhawk was able to achieve core objectives. Using the advanced workflow functionality in the system to build in the SOX approval process reduced the challenge for legal of using emails to prove compliance. This has tremendously improved audit capability for the “burden of proof” and the exceptions and reporting capabilities added to their internal control process for areas like Accounting Standard 18.

With the system, Blackhawk could also use the extensive sub-agreements and categorization reporting to manage these agreements based on the CLM business objects. This capability enabled the company to manage some of their most complex parent-child relationships; for example, one customer has 400 locations each with their own sub agreements.

The value to the growing international team has also been in time savings, with the ability to instantly locate any contract. The robust, dynamic repository lets the company manage contracts outside the US, including Australia, Brazil, Canada, France, Japan, Germany, Mexico, and the UK, using multilingual contracts in their regional language. Using full text search and the ability to produce country reports, global offices can now find what they need right away instead of waiting for the US to provide it.

Other benefits include using metadata to capture exceptions when there is non-standard language, tracking the date information in the system, tracking commission rate on particular partners, notifications for expiry / renewal, improving contract risk aversion and management capabilities, and managing seven different business categories with affiliated contract types (including: content provider, distribution partner, corporate, and incentives business areas).

Having had the system in place for a few years, legal and finance continue to predominate system usage with a handful of account managers, risk managers, audit, and sales, but use has also expanded to procurement. Given the rate of M&A (fourteen companies since the time they started using Determine), Determine’s CLM usage continues to expand.

Today, based on the initial successes and the number of acquisitions in the past year, Blackhawk plans to load more contracts and has renewed their license agreement for over 100 users.  There is also a need for expanded use including contract authoring and request approval capabilities in the future.

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