The SLP and Case in the Capstone course project work together. The SLP involves gathering information and assessing needs and the cases write up your findings in a form that serves as a report to management. This report can assist management in assessing their contract management capabilities, and evaluating possible CLM/ECM options.

In essence, you will be acting as a “consultant” advising a “client” on what an automated contract management system can do for his or her organization. The first step is to locate a business whom would like your assistance in receiving a free evaluation as a part of a class project for a course in contract management. Be sure to read the background material thoroughly before you approach a potential “client” so that you can knowledgably discuss CLM. You might want to complete the first part of the case to reinforce that knowledge before you talk to your “client”.

Explain that your services will include the following:

An assessment of the company’s need for a contract management system, consisting of:
1.A diagnosis of the company’s current contract procedures and processes.
2.An evaluation of different automated systems currently available.
3.A recommendation on which systems(s) might best fit the company’s needs and resources.
4.A written report to management of your findings and recommendations, accompanied by a presentation, if desired.

Explain that you will need to interview the chief executive, or person in charge of contract administration for the first two parts of this consultation, after which you may need limited follow-up as you finish your evaluation of systems and recommendations. Interviews can be in person, by phone, web conference, or even by email – though the last option is probably least preferable. The initial interview will probably take 60 – 90 minutes.

If you and your client opt for a final presentation of the report, it will take 45 minutes to one hour.

Arrange for an interview with the business owner, chief executive, CFO, controller, or person significantly involved in the administration of the company’s contracts.

SLP Assignment Expectations

In a one page paper,
•Identify the business you will be working with for this project and briefly describe the business they are in. (A construction company or whatever you come up with).
•Who will you be interviewing and what is his/her job title? (Please make up a name)
•What is the date of your interview and where will it take place?(Any date)
•Is it in person, by phone, on the Internet – or by some other means?
1.Answer questions with clarity.
2.Show depth and breadth in your paper to enhance the quality of your paper.
3.Try your best to search in our library to find some papers/articles to support your argument and show them in the reference list.

Module 1 – Background

Introduction to Contract Lifecycle Management
Approximately 60%-80% of all business to business transactions are covered by contracts, and the typical Fortune 1000 company holds 20,000 to 40,000 contracts on any given day (Saxena, 2008). Even small organizations have hundreds, if not thousands of contracts. This is not hard to fathom when you realize that contracts include such daily transactions as purchase orders, leases and utilities, employment contracts, service or maintenance agreements, lines of credit or credit cards, etc. The majority of these contracts are signed and filed away in a drawer, never to be seen again unless a problem arises, because there are just too many to manually oversee. Proactive and automated contract management can boost the bottom line, streamline management processes, improve compliance and reduce risk.

The Contract Life Cycle

Every contract follows a life cycle from birth (conception) to death (close out). In the conception and creation stage, both parties have goals they want to accomplish that are codified in the contract. These goals are sometimes made explicit through a memorandum or agreement or letter of intent. Then the contract is created, which involves a process of precise wording governing the relationship between the parties.

In the collaboration stage, explicit rights and responsibilities are negotiated, and it is not uncommon for an outside authority to review and approve the terms. Such authorization may require the participation of several different entities including legal, tax, risk management, accounting, and/or insurance interests. If the contract is large or significant enough, it may also require the attention of senior management. These negotiations may cycle over several iterations before the contract is finalized.

The execution stage marks the start of the contract procedures and enforcement mechanisms, as well as opens the period when amendments can be made.

During the administration stage, the contract is monitored, tracked and audited to insure compliance with pricing, payment, and service terms. The primary goal is to insure procedural, contractual and regulatory compliance.

Finally, during the closeout and analysis stage the emphasis is on budgetary concerns, evaluation of competing suppliers (or customers), and achieving the optimal allocation of resources to the most profitable entities. Subjects such as outsourcing, future procurement, and risk strategies are discussed. Decisions are made to terminate or continue contracts. Supporting documentation is required for adequately recording that the contract terms were met.

In a utopian world, all contracts would be negotiated and executed in good faith, al parties would be satisfied with performance, and the original intent of the parties would be realized. Unfortunately, it rarely goes this smoothly – raising the following challenges and threats during the life cycle:
•Fragmentation of critical procedures in the collaboration stage – frequently due to miscommunication, clerical or data entry errors delaying negotiation, review, and authorization.
•Labor-intensive processes – expensive and time consuming manual processes involved with drafting, revising, printing, faxing, and storing documents.
•Poor visibility – documents are stored in multiple locations, with multiple versions and copies (digital and hard copy). Documents are not always accessible to those who need them and frequently are available to those who don’t. The problems are access, accuracy, and security.
•Ineffective monitoring – in many organizations, contracts are not routinely audited for compliance leading to a situation where contracts are monitored only after a crisis occurs, leaving the organization open to tremendous risk of violating legal, regulatory or contractual requirements.
•Inadequate performance evaluation – overlooks non-obvious problems like hidden charges and fees, unspecified liabilities and other problems that may not be uncovered until a sale, dispute, or litigation forces them to light.

When contract management in organizations relies on manual, disjointed and decentralized processes, these problems proliferate, leaving the firm open to poor visibility, inflated costs, protracted negotiation periods, inadequate compliance and increased risk of litigation or regulation violations. Automated contract management systems, such as CLM, offer a solution.

Read about contract lifecyle management systems in the following reading. You may need to register at the site to access the article, but there is no charge.

Anonymous. (2006). Contract management- A strategic asset. White Paper: Open Text Corporation. 1-22. retrieved November 27, 2012, from www.opentext.com

Optional Reading

Here are some optional readings that can help you format your cases:

McMurrey, D.A. (n.d.). Online technical writing: Headings. Retrieved November 27, 2012, from http://www.prismnet.com/~hcexres/textbook/headings.html

Hibbard, C.S. (2001). Using bullet points and lists. Cypress Media Group. Retrieved November 27, 2012, from http://www.cypressmedia.net/pages/article7.htm

References:

Saxena, A. (2008). Enterprise Contract Management: A Practical Guide to Successfully Implementing an ECM Solution. Fort Lauderdale, FL: J. Ross Publishing

Required Reading

Domains of Compliance

CLICK BUTTON TO ORDER NOW