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IACCM - International Association for Contract & Commercial Management Contracting Excellence Magazine
 

Contracting Excellence Magazine - Aug 2009

 
 

 

Is knowledge management holding us back?

 
"Knowledge Management (KM) comprises a range of practices used in an organization to identify, create, represent, distribute and enable adoption of insights and experiences. Such insights and experiences comprise knowledge, either embodied in individuals or embedded in organizational processes or practice."   This quote from Wikipedia is given context by a diagram from Gene Bellinger (Knowledge Management-Emerging Perspectives), showing knowledge as part of a continuum from unmanaged data to the creation of wisdom (see Figure 1)   My contention is that while those in the field of contract and relationship management may be individually knowledgeable, as a community we lack understanding. Indeed, in far too many cases, we do not even understand why we need deeper understanding!   TIM CUMMINS, CEO, IACCM
 
 

by TIM CUMMINS, CEO, IACCM

“Knowledge Management (KM) comprises a range of practices used in an organization to identify, create, represent, distribute and enable adoption of insights and experiences. Such insights and experiences comprise knowledge, either embodied in individuals or embedded in organizational processes or practice.”

This quote from Wikipedia is given context by a diagram from Gene Bellinger (Knowledge Management — Emerging Perspectives), showing knowledge as part of a continuum from unmanaged data to the creation of wisdom (see Figure 1 on page 2).

My contention is that while those in the field of contract and relationship management may be individually knowledgeable, as a community we lack understanding. Indeed, in far too many cases, we do not even understand why we need deeper understanding!

Delivering value

The value of high-performance contracting is fast becoming more evident. It has been recognized by governments worldwide as key to greater efficiency and effectiveness in the delivery of major projects and acquisitions. IACCM research and re-engineering initiatives are pointing to the fact that “contracting excellence” can drive potential improvements in bottom-line performance of 5–7%. Armed with facts such as these, it will not be long before executive management is demanding action. Already we see many that are.

But to whom will they turn and what response will they receive? The challenge we see for many in legal, procurement and contract/commercial management is that they remain far too focused on transactional activities, where the ability to demonstrate value is both limited and open to question. Wisdom in such groups depends far too much on age and experience, and far too little on shared knowledge. Collectively, few groups can claim to “understand relations, understand patterns and understand principles” in ways that make them highly influential, or perceived as key strategic contributors. This is because they regularly fail to even share information and knowledge internally, let alone having meaningful collective data or benchmarks to guide their actions.

Taking the initiative

In general, we remain content to carry on doing the same things in similar ways because we do not have the insights to see the value of new approaches, or how they might then be achieved. This leaves us dangerously exposed. 

The story could be very different, and in this issue of Contracting Excellence we explore ways that our community can build its knowledge assets and occupy a position of leadership. IACCM exists for this purpose. Our unique approaches to managed learning and skills assessment offer a constantly updated body of knowledge. Our compelling, on-demand research and benchmarking ensure members in all countries and all industries can obtain up-to-the-minute data, information, knowledge and wisdom. 

Knowledge is exciting. Leadership is exciting. IACCM can equip you not only to respond to executive management questions, but to take the initiative, using our collective knowledge to drive change and improvement in your organization.

 

 

 

Tim Cummins CEO, IACCM






The following two IACCM figures illustrate
The Challenge (how can practitioners identify and apply the correct resources to best mitigate risk, achieve compliance, and deliver value?) and The Solution.









 

 
 

IACCM survey: insights into how organizations manage their knowledge

 
Knowledge management has gained significant importance in most corporations over the past decade. Some organizations have made huge investments in knowledge management suites that promise to capture organization best practices effectively. Other organizations have implemented their own version of a knowledge management system, sometimes using a combination of repositories and tools developed either internally or through outside providers.   In this article, we will look at some of the trends and practices we have identified through our research, and discuss whether the current knowledge management systems for contracting are sufficiently addressing the demands of today’s business environment. KATHERINE KAWAMOTO, SANDRA LEWY and RAM PARAVASTHU, IACCM (Photos Katherine and Sandra)
 
 
by KATHERINE KAWAMOTO, SANDRA LEWY and RAM PARAVASTHU, IACCM

Knowledge management has gained significant importance in most corporations over the past decade. Some organizations have made huge investments in knowledge management suites that promise to capture organization best practices effectively. Other organizations have implemented their own version of a knowledge management system, sometimes using a combination of repositories and tools developed either internally or through outside providers.

In this article, we will look at some of the trends and practices we have identified through our research, and discuss whether the current knowledge management systems for contracting are sufficiently addressing the demands of today’s business environment.

In an IACCM survey on knowledge management conducted in July 2009 (KM survey), which drew input from 116 companies across various industries and regions, we learned that only 13% of respondents claim to have a “complete” formal and documented knowledge management system for contracting, while 28% have no system in place. As we looked at regional variations, we saw that 18% of companies from the Americas said they have a formal and documented knowledge management system for contracting; similar numbers can be seen in the Asian region (11%), while only 3% of companies from EMEA gave this response. (Figure 1.)

Our analysis also showed that there were some differences across industries. Companies from the aerospace industry took the lead, with 43% confirming that they have a “complete” formal and documented knowledge management system. Results across other industries were relatively consistent, with the majority reporting the use of limited knowledge management systems for contracting. (Figure 2)

 

State of knowledge management maturity in organizations

The use of technology to collect, share and analyze information is widely seen as a necessity by contracting organizations today, yet relatively few have been successful in developing a holistic approach.

IACCM research has found that specialist applications, such as contract management software, are part of the solution, but often sit in silos and are not integrated with other key data systems such as customer relationship management (CRM) or supplier relationship management (SRM) systems.

Among interviewed companies in the project “The best in post award contract management in 2008”, the most common tools and systems deployed in support of contract and relationship management were enterprise systems such as ERP. While some had an ERP system in place, others had individual systems for each business unit. In large organizations where each business unit had its own management and data and specific methods of measuring performance criteria and relationships, individual systems seemed more appropriate.

Apart from enterprise resource planning (ERP) systems, a contract repository was a common tool in most organizations. In the KM survey, 85% of respondents said they have a repository for executed contracts, of which 39% have a single, organization-wide repository and 46% have multiple repositories in various parts of the organization. Centralized repositories have been found to store all agreements together with the underlying transactions. While storage for later retrieval was the primary objective, several organizations also could perform a variety of functions with their repositories that aided them in better decision making. For example, some organizations were able to store correspondence between their suppliers and their contracting team around contract issues, and some others had the ability to search those correspondences through the database. This helps them build unique knowledge sharing, both at an individual customer contract level and across the entire portfolio level.

The KM survey revealed some other interesting facts:

· 71% of respondents reported having a standard template library, although 57% indicated that they do not have a standard clause library;
· 68% do not have a negotiation “play book” for their standard agreements/clauses/positions;
· 72% have no repository of contracting best practices that can be shared in their organization; and
· 90% have no automated process for identifying and managing disputes.


These results highlight the need for more information to be provided about knowledge management opportunities and benefits.

In addition to these tools, organizations employed technology for:
 
• measuring activity in terms of volume;
• monitoring deliverables/obligations;
• managing risk;
• monitoring contract changes;
• asset management;
• service level agreement (SLA) management; and
• customer deliverable tracking, which comprises measuring a range of issues, including:

— the duration to process transactions down to the contract level;
— the timeframe to write a request;
— the interval between obtaining responses from the supplier;
— the time consumed in negotiations;
— the amount of local content compared to offshore content in the contract;
— whether the supplier is properly leveraging a low-cost resource;
— the number of issues to establish relationships between suppliers; and
— the number of contract changes required.


Proactive reviews and early warning systems

Some organizations have initial reviews that check the health and status of an account by asking a series of questions. Once each quarter, the contract manager and project officer go through the checklist and check the health of the contract and plan any early changes that need to be incorporated into the contract.

Other organizations use a formal review which draws out a series of criteria, from management to financial risk to commercial management of the contract, in terms of change and estimated time to complete, value technical issues and requirements definition, among other items. The review results are captured in the monthly contract summary report. In a few organizations, the tools automatically feed into the executive reporting tool, providing management with a summary of the information through an information dashboard. 

Thus, most tools discussed fare reasonably well in collating data within an organization and providing it to the senior management at the right granularity. But is this state of knowledge management best-in-class? IACCM has recently found that there is significant interest among members to learn how they can extend their systems not only across their organization, but also to other organizations in the supply chain.

The changing environment

What explains this heightened focus on collecting meaningful data both within and outside the organization? At IACCM, our interactions with organizations have led us to believe that this focus has stemmed from the increased pressure on managers today to quickly make the right decisions, or at least informed decisions. Moreover, as a contrasting development, managers are so caught up with their daily priorities that they may not be aware of the trends in their own industry, let alone across industries. This is especially true of the contract management profession, where a contract manager might oversee hundreds of contracts and relationships.

The skills required by management have moved through various phases — at a basic level, from solving problems which often have had well-defined questions and off-the-shelf knowledge as a guide, to more actively utilizing data and performing historical analysis to study recurring trends and benefit from past lessons. But as we all have come to understand, historical data cannot be used to predict the future in our rapidly changing world.

IACCM research finds that to remain competitive in such an environment, organizations need to move beyond traditional knowledge management practices, which have been largely internally focused. They were analyzing what could go wrong with their organization’s existing position or commitments. However, in a shift towards proactive decision making, organizations increasingly need to look beyond their borders and reflect on what is happening elsewhere.

Microsoft: an example of best-in-class

Contract managers therefore now need to look beyond the silos created by internal data and challenge assumptions about the future. This way, they are able to assess what data they should be looking for in order to support their decisions, rather than being clouded by data of lesser significance and producing very little impact.

While many organizations have adopted a knowledge management system to capture, organize, share and reuse knowledge and information related to contracts, some are taking it a step further by identifying standards across the buy and sell side, as well as across industries, and using this knowledge to improve relationships by facilitating more transparency and building more trust between buyers and sellers.

An example of such an organization is Microsoft, which recently, in collaboration with the University of Chicago Law School, teamed up with IACCM to compare and analyze model IT contracts across industries and corporations. As a result of this collaboration, Microsoft can now identify the industry standard for both buy and sell sides and recognize a “middle ground” between the two sides. Knowledge of such a middle-ground spanning all industries is bound to help Microsoft streamline its future negotiations, thus significantly reducing cost and time to contract.

The importance of benchmarking

In addition to corporations such as Microsoft engaging in cross-industry exercises, newer technologies and techniques are being embraced by corporations. Philippe Hellich, vice president of risks, control and audit at Danone, is already moving to the new model. “We use very few mathematical models,” he says in a statement to Knowledge @ Wharton. “Instead, we rely much more on interviews and benchmarking with peers outside the group and between our subsidiaries around the world. Our approach is based on listening and challenging the operational management, common sense analysis, sound judgment and good governance at the top.” 

At IACCM, we see why more and more executives like Hellich are relying on these new methods. The benchmarking IACCM offers through the Capability Maturity Model has demonstrated the constraints that many face as a result of inadequate technology solutions and weak processes. Poor technology and weak processes trap many managers in transaction-focused groups that are limited in the value they can deliver or demonstrate to the business.

“A coherent approach to KM is a basic building block for future CM organisations and professionals” says Mark David, CEO of Commitmentor. Mark finds contract professionals mostly relying on personal hard drive based systems complemented with email. Although this has been a successful approach so far, it is threatened by the increased technology usage in the contracting arena in the coming years. “One dimension of this will be the ability for systems to automatically establish and manage transactions with limited supervision. In this scenario, the individualistic approach to CM skills, capabilities and operational behaviour will be seriously diminished”

The need for change, Mark adds, is survival — handling ever increasing workloads, learning new things and keeping up with new workforces which expect to access technologies that more mature workers don’t know about. This is precisely the time when contract managers have to take a holistic approach to their jobs by becoming more interested in their peers and monitoring trends outside their organization and industry. The biggest change (and arguably criterion for success), according to Tim Cummins (CEO of IACCM), is the need for contract managers to recognize that they can no longer flourish as talented individuals, but must adopt the behaviors of a profession — a consistent body of knowledge, shared tools and methods, a commitment to continuous improvement through research, benchmarking and pooled experiences and development of learning sources that enable a career path.

Katherine Kawamoto, Vice President of Research and Advisory Services, IACCM, Email: kkawamoto@iaccm.com, and Sandra Lewy & Ram Paravasthu, IACCM.

 
 


 

Contracts and knowledge management principles

 
Businesses today are under more scrutiny than ever before from regulators and legislators. Yet, a persistent defence of business leaders asked why their organizations fail is that they could not be aware of everything going on within the enterprise. The problem is that they did not have a system for managing and disseminating knowledge throughout the enterprise to ensure that the reality within the operations is also evident at the highest levels of management. BRIAN HENRY and SUSAN MOSTERT, Caridon Business Solutions (Pty) Ltd
 
 

by BRIAN HENRY and SUSAN MOSTERT, Caridon Business Solutions (Pty) Ltd

Key points

• Knowledge is about knowing what you need to know at the time you need it. It’s not just about trying to predict what you may need and then structuring the information in advance.
• Managing contracts requires sharing the knowledge that was used in their creation with all stakeholders.
• Tools and technology, such as an expanded enterprise resource planning system, alone won’t solve the problem. The elements of change management must be applied.

Businesses today are under more scrutiny than ever before from regulators and legislators. Yet, a persistent defence of business leaders asked why their organizations fail is that they could not be aware of everything going on within the enterprise. The problem is that they did not have a system for managing and disseminating knowledge throughout the enterprise to ensure that the reality within the operations is also evident at the highest levels of management.

Contrary to traditional wisdom, a knowledge management solution is not just another excuse to expand our data warehousing technologies. Ultimately, knowledge management is about knowing as much as you need to know about any particular subject, issue or problem in order to deal with it correctly and effectively. In practical terms, it takes years to implement a perfect knowledge management solution, so the logical approach is to prioritize such an implementation, starting with the most critical needs.

First, let us consider the problem of managing contracts and apply knowledge management principles.

Contract risk management as a knowledge management problem

Managing contracts is about managing risk to the organization. Contracts are a tool for mitigating risk and limiting impact, but they do at the same time introduce new responsibilities and accountabilities. As contracts become more numerous in the enterprise, so the interrelationships and dependencies between them become more complex, making it increasingly difficult to track the overall exposures and risks to the organization which they represent.

Each contract can affect the responsibilities and activities of many people, from management to machine operators, usually without them being aware of the implications. When one considers the statistics regarding the proportion of lost, inconclusive, unsigned or even expired contracts in most organizations, it is clear that such awareness is not a priority in the workplace. The expansion and growth of the organization through new negotiations and deals means that the composition and framework of the risks represented in these contracts can change daily.

Large corporations may make dozens of acquisitions in a single year, thereby expecting their workforces to absorb inherited contractual terms from third parties.

Knowledge management principles

Knowledge management has been defined in many ways over the years, and there is a school of thought that it is a technology issue. Technologists have been searching for the silver bullet to the challenges of management and executive information systems, and, more recently, “business intelligence” is the buzzword of choice. While these are noble efforts from the scientists, engineers and computer experts, the focus on “knowledge” tends to be lost.

Knowledge is about knowing what you need to know at the time you need it. It’s not just about trying to predict what you may need and then structuring the information in advance in case you have to “ask the question later”. Predicting the question is impossible, because that implies clairvoyance on the part of management.

The paradox is that the information, and often the knowledge that comes from it, already exists somewhere within the organization, either as structured and unstructured data, or as experience in the minds of individuals and teams. It seems that managing knowledge in an enterprise requires a magic mix of art and science, because it requires a combination of technology and business insight.

Why is it that we are conscious of the need to negotiate contracts, but so often thereafter forget the context and content, and never share it with the rest of the organization? In many cases the contract is lost, both physically and intellectually, within the first three months of signing.

Managing contracts requires sharing the knowledge that was used in their creation with all stakeholders and role-players in the contractual terms and relationships. It also means asking knowledge generating questions about how the contract will affect the organization, its operations and its risk profile, such as:
· What relationships or dependencies does the new contract have with other contracts within the enterprise?
· Can it compromise existing relationships and obligations and, if so, which ones and who owns them?
· How will this contract influence the process requirements and capabilities of the organization?
· Is this contract aligned with policy and does it support the business strategy?
· How will the organization need to adapt or change to fulfill the contract?

The knowledge and insight required to manage each contract are relegated to one or two people who become the “experts” on the contract. Should these people be lost to the organization, the essential tacit knowledge is also lost.

A common question when discussing knowledge management relates to the perpetuation of knowledge after individuals have retired or resigned.

In a 25-year-old organization we recently worked with, it was discovered that the information relating to critical founding agreements and contracts was known to one long-service executive, while the whereabouts of the actual documents was not clear. His knowledge of the contracts was enhanced by his insight into the 25-year-old context of these agreements. Further discussion revealed that many of these obligations were inappropriate and irrelevant to the current status, strategy and composition of the organization. Some had matured or expired years previously, at which point material amounts of deposits and rebates should have been recovered, but were forgotten!

Applying knowledge management principles

Knowledge management requires understanding and selectively applying many concepts, but it is necessary to develop the form and processes of the enterprise as a “learning organization” so that “organizational learning” can be achieved.

This means introducing the policies, procedures, disciplines, skills and tools which the workforce can apply to facilitate the learning process. Technology can play an important role here, but only if it is used to support an overall program of knowledge development and has defined objectives.

This requires first identifying these objectives and needs. For contract management, these will flow from a study of the contract types and their associated risks. Carrying out a knowledge audit of the contracts would be the starting point of this to determine the part played by the contracts, who is affected by them, who adds knowledge to the contract throughout its lifecycle, and who does or needs to access this knowledge. (Figure 1.)

A look into the organizational structure can provide valuable insights and provide answers to these questions. The traditional or official view of the enterprise clearly maps or defines reporting structures and information flow established through policies, procedures and processes.

However, these links and information flows may have been replaced by the evolution of informal working teams and information sharing, because people devise more efficient ways to carry out their daily tasks. These teams can operate overtly or covertly, creating a dilemma for management. If the team is counter-productive, it needs to be restructured or removed. If it represents a “better practice”, it means changing the official processes and procedures to empower the new team. Either way, change management is needed.

Five activities of knowledge management

The five activities of knowledge management are shown in Figure 2. These apply to the contract lifecycle, where the creation of the contract generates or also “creates knowledge” through the negotiation process.

Discover

Capturing the knowledge occurs when the contract is negotiated, drafted and finalized. It becomes a formal element of the organization’s knowledge base and, if possible, it should be stored in an effective repository from which the content can be accessed and processed. Risks are, or should be, assessed and analyzed, then organized into the framework of the contract.

Generate

Knowledge is then enhanced or generated as the contract is executed. In a supply or manufacturing contract, experience is gained when dealing with the customer and their expectations, as well as the peculiarities of the order placed and the goods manufactured or delivered. Operational challenges and processes specific to the contract are learned by the teams involved.

Evaluate

Assuming that all the contracts are interrelated or interdependent, they individually and collectively represent a dynamic learning repository from which new experiences and insights can be gleaned. There is a maturity in acknowledging this, rather than ignoring or losing contracts and the information therein.

Share

Contracts invariably affect teams and sometimes the entire organization. Distributing or sharing information about the contract at least to the role players and providing access to this knowledge for daily operations will enhance the organization’s ability to manage the risks and deliver according to the terms and conditions. Unfortunately, this is seldom followed through, leaving role-players to continue operating according to old rules and learned behavior from other contracts. Apart from being potentially counter-productive, there is also the possibility of not managing the threats and risks inherent in the contract.

Leverage

Leverage is all about learning from the contract “knowledge repository” to enhance organizational performance and intellectual capital. To some extent, sharing the knowledge and experiences offers a chance to learn, but a deeper study or structured analysis and reporting regime will extract more value for the individuals and teams.

Implementing a knowledge management culture

It is not enough to provide the tools and technology to facilitate the management of knowledge. An expanded enterprise resource planning (ERP) system doesn’t solve the problem. Without a suitable adjustment in the culture of the organization, the introduction of knowledge management principles and processes will not be understood or accepted by the people. This will lead to failure.

The existing culture may in fact be unsuitable or not aligned with the concepts of knowledge management — knowledge management requires that information is shared. Immature cultures that regard knowledge as power or which instill a belief in the individuals that to share knowledge is to expose oneself to the devious tactics of others, will require significant evolution and encouragement to make knowledge management work.

Internal creative conflict may be a good concept for many organizations, but the question must be asked: “Can the competing entities learn collectively from one another’s successes and mistakes, or will this lead to the success of one team at the cost of another?”

Knowledge management implies that like-minded people with similar interests can and often do discover one another to create informal working teams. A study of the personalities of the teams (both formal and informal) can shed much light on information sharing and knowledge transfer and expansion.

Technology and tools

Few interventions for changing or improving an organization’s way of operating are initiated without a search for technology. Knowledge management is not an extension of the current ERP system, but that’s where our technology teams look to find instant answers, and this gives impetus to the software developers who think that by tweaking what we already have, a quick solution can be created.

Knowledge management requires that a fresh approach be taken to address the mysteries of tacit and unstructured knowledge and the dynamics of learning in individuals and organizations. Technology now exists which can provide solutions, although sometimes in a more radical fashion than we may be comfortable with. For example, web-based compliance and risk tools abound, while metadata management techniques and facilities now create the platform for the delivery of real-time performance dashboards into the executive suite. Solutions based on pattern matching, such as Autonomy’s IDOL™, gather and deliver tacit knowledge from structured and unstructured data repositories within the reach of organizations.

Conclusion

First, it should be noted that contract management is a holistic endeavor and not just a means of cutting costs and leveraging buying power.

As an important element of the risk management challenges, good contract risk management leads to better governance and compliance and ultimately to more efficient and effective management, which ultimately improves the bottom line.
Viewing contracts from a knowledge management perspective can stimulate thinking and discovery of innovative ways to take control of and exploit the knowledge and learning opportunities inherent in the repository of contracts.
What are needed to achieve this are innovative thinking and innovative technology.
 
Brian Henry, Managing Director, Caridon Business Solutions (Pty) Ltd, Email: bjhenry@caridon.net, and
Susan Mostert, Senior Consultant, Caridon Business Solutions (Pty) Ltd Email: smmostert@caridon.net, www.cylon.biz; blog: http://finblogs.24.com/contractmanagement.

About the authors

Susan Mostert is involved in metadata, data warehousing, web services and organizational learning projects. Susan started in the financial services industry in 1995 and later moved to higher education when she joined Technikon Pretoria (now known as Tshwane University of Technology TUT).

Brian Henry has been involved in business and information technology since 1970. He practiced as a management consultant for some 28 years, providing support to management on a wide range of business systems issues. These include security, business continuity, risk and impact assessment, contract risk management, organizational restructuring and strategic planning.
 
 


 

Knowledge transfer: extending the value of outsourced relationships

 
Companies have a significant issue to deal with when using external consultants or outsourcers for business processes, such as strategic sourcing. Organizations get great value from these relationships, but this value quickly degrades as most don’t have effective policies or procedures for ensuring that the knowledge generated from the engagement — such as how to buy certain complex categories or how to evaluate risk in your supply chain — gets transferred to the enterprise. As a result, the value of that activity is only temporary, as the company never gains the knowledge or skills to sustain the benefits and drive continuous improvement over time. KRIS COLBY, Ariba
 
 
by KRIS COLBY, Ariba
 
Keypoints
 
• Make sure that the documented goals for your outsourcing initiative clearly include long-term considerations for knowledge transfer, training, intelligence repositories and the like.
• Ask for, and understand in detail, your provider’s approach to the engagement prior to signing the statement of work.
• Select a technology platform that can provide a full range of process, repository and reporting capabilities, in addition to the more execution-focused activities in sourcing and procurement. Above all, use it.
 
Companies have a significant issue to deal with when using external consultants or outsourcers for business processes, such as strategic sourcing. Organizations get great value from these relationships, but this value quickly degrades as most don’t have effective policies or procedures for ensuring that the knowledge generated from the engagement — such as how to buy certain complex categories or how to evaluate risk in your supply chain — gets transferred to the enterprise. As a result, the value of that activity is only temporary, as the company never gains the knowledge or skills to sustain the benefits and drive continuous improvement over time.

Making knowledge transfer stick — for a change
 
We all know the classic tale of outsourcing/consulting engagements:
 
· a group of smart people show up and …
· they take up a lot of your staff’s time and energy and …
· crank out an enormous amount of analysis and projects in a short period of time and …
· leave behind a pretty binder that sits on the shelf.
 
Your organization has spent large sums of money and probably seen significant short-term value from the projects. However, six months later nothing has really changed and all that knowledge has departed along with the provider on their way to the airport.

How do you keep your fair share of that knowledge in-house?
 
Given their experience and access to many world-class organizations, including your competitors, outsource providers can be a valuable source of knowledge and expertise if you can find a way to keep this information inside your organization once they are gone.
In order to make real knowledge transfer stick, you need to address the root causes behind why it often doesn’t happen, because there is:
 
· a focus on near-term results rather than longer-term enablement and training;
· a lack of a structured approach for driving change; and
· no platform to document, keep and embed the results, process and knowledge gained during the engagement.

Don’t focus on short-term results
 
In the initial scoping of outsourcing engagements, much of the attention from senior executives is focused on driving short-term results and/or cost savings. Typically, the organization is under significant pressure to “deliver numbers”. Discussions on knowledge transfer and change management are spirited and interesting, but those elements of the proposal are often the first to go when money gets tight during negotiations.
 
Example: A major US retailer had the competing goals of needing to drive near-term cost savings during a severe economic downturn, but also fix a purchasing group that had substantial structural issues. While there was significant pressure to reduce upfront engagement costs, the C-level executives involved in the deal recognized that this was an inflection point and an opportunity to make long-term changes on how spend management was done in their organization. An engagement was structured to address the short-term savings needs first and incorporate the learnings from those projects into goals for a more comprehensive change management and transformational engagement immediately following.
 
Lesson: Don’t let the very real pressures for short-term results displace your focus on the long-term needs of your organization. Make sure that the documented goals for your outsourcing initiative clearly include long-term considerations for knowledge transfer, training, intelligence repositories and the like.

Have a structured approach for change

While a certain amount of learning comes through “osmosis” during the engagement, enduring knowledge transfer needs to have a plan to happen. This plan needs specific knowledge transfer and enablement components, goals and tasks with proven approaches to delivery. See a sample framework Figure 1.



 

 
Example: During a multi-year engagement with a major international manufacturer, Ariba employed a structured framework that ensured that education, continuous improvement, repositories, reporting and other knowledge transfer enablers were embedded into the overall structure of the engagement. Rather than just doing a sourcing project for a customer, the engagement team followed a process that included:
 
· process design and mapping;
· embedding processes into technology tools for future use;
· side-by-side execution on early projects to ensure designed processes met needs;
· in-person training of customer staff on both process and technology; and
· design and implementation of continuous improvement processes to make it their own.
 
Using this framework, the program elements for enablement became as important as short-term savings. While steering committee reports and discussions obviously included project results, they also highlighted areas of both progress and challenge in embedding the long-term lessons into the organization. This provided additional visibility at the executive level to both the value and the challenges.
 
Lesson: Ask for, and understand in detail, your provider’s approach to the engagement prior to signing the statement of work (SOW). Make sure that the approach has specific goals around enablement and ways to measure progress, and is a “fit” for your organization.

Have a platform to embed results, process and knowledge
 
Technology is one of the key enablers for making knowledge transfer stick. By employing a robust platform for repositories, process management and execution, your organization can transfer the knowledge of your provider and keep that valuable information and expertise in-house for use at a later date.
 
Example: In developing and implementing an international purchasing office (IPO) for a major consumer products maker, Ariba focused on embedding all the new processes, category knowledge and sourcing learnings into the technology platform that was implemented as part of the engagement. In this way:
 
· resident knowledge doesn’t depart with the resident, it stays in the organization;
· ramp-up time for new resources is dramatically reduced, especially important in international situations where turnover is often very high;
· standard processes within the technology ensure that best-practice processes are being used across the organization;
· templates both help resources new to a category and avoid “re-creating the wheel” on projects that are done only periodically; and
· knowledge transfer and sharing can be done globally, since everyone has access to the same system, even if they’re not in the same office, and executives can more easily focus attention on the key messages through newsletters, online training and the like.
 
Lesson: Select a technology platform that can provide a full range of process, repository and reporting capabilities, in addition to the more execution-focused activities in sourcing and procurement. Above all, use it. Make sure your people are trained, expectations are set around compliance, and you report back on usage.
 
Finally, it is imperative that customers of these service providers recognize the inherent conflicts of economic interest. Depending on the type of service provider and your relationship with them, their incentives may be focused on keeping their team on the ground as long as possible. Look for a provider that specifically focuses on long-term enablement and make sure they have economic incentives to do so.
Conclusion
 
Making knowledge transfer stick in your outsourcing/consulting relationship has the potential to create just as much value for your organization as the initial engagement. In order to do so, you need to address each of the three core issues that typically impede long-term enablement: short-term focus, lack of a plan with goals, and inadequate use of technology. Thankfully, none of these issues are particularly complex; they require only awareness, a plan and follow-through to get it done right. 

Kris Colby, Director, Spend Management Services, Ariba, Inc, Email: kcolby@ariba.com,
www.ariba.com 

About the author

Kris Colby leads Ariba’s retail/restaurant consulting practice, helping organizations design and execute sourcing, procurement, supply risk management, and overall spend management strategies that deliver sustainable bottom-line results.

 
 


 

Using social networking technologies for knowledge management

 
As contract professionals, we must adapt to a rapidly changing business environment. That is especially true for those of us in the software industry. At Oracle, it seems that every week there is a plethora of new policies or processes announced and implemented as a result of legislation or company policy. Acquisition activity also keeps us busy learning how to integrate new products, contracts and even employees into our existing model. MICHAEL D. GREENER, Oracle
 
 
by MICHAEL D. GREENER, Oracle

As contract professionals, we must adapt to a rapidly changing business environment. That is especially true for those of us in the software industry. At Oracle, it seems that every week there is a plethora of new policies or processes announced and implemented as a result of legislation or company policy. Acquisition activity also keeps us busy learning how to integrate new products, contracts and even employees into our existing model.
 
We have specialized, where possible, by having employees support drafting contracts for specific lines of business, such as licenses and services. This specialization allows individuals to narrow their focus on the knowledge for that line of business only, but we still have an enormous amount of information that we need to manage. How can anyone remember every bit of information and knowledge that is required as a contract professional? Quite simply, we cannot. But if we can manage that knowledge in a way that is simple, usable and available when needed, we will be able to remove the “ability to know everything” from our job descriptions.
Before we discuss the “how” of knowledge management, let’s discuss the “what”
 
While there is no universal definition of knowledge management (KM), CIO.com offers this:
KM is the process through which organizations generate value from their intellectual and knowledge-based assets. Most often, generating value from such assets involves codifying what employees, partners and customers know, and sharing that information among employees, departments and even with other companies in an effort to devise best practices. It’s important to note that the definition says nothing about technology; while KM is often facilitated by IT, technology by itself is not KM.1

There are many KM programs and tools. With employees worldwide, the virtual nature of Oracle’s Global Contract Services team requires a sophisticated KM system that gathers and filters information from communities around the globe. We found that one of the most effective methods to facilitate KM with regard to contracting was to use Web 2.0 or social networking technologies. Technologies such as wikis, blogs, forums and information tagging are inexpensive, widely used and easy to implement. Plus, they actually work. The younger generations of employees who are entering the workforce readily accept these technologies. In fact, they expect them.

Wiki while you work

A few years ago, someone in our organization was looking for information about a little-known policy. A colleague of mine, well known for saving every email that has crossed his desktop during his decade with the company, found an email on that very topic, sent to him in a similar situation nearly three years prior. While my colleague saved the day, we quickly realized that this was not effective KM. We also realized that there were probably vast quantities of knowledge floating around on the laptops and in the heads of the people in our organization. How could we better manage that knowledge so that this information could be shared with everyone around the globe?

Around that time, a friend of mine at the US Central Intelligence Agency wrote a paper about using a secure wiki to share information within the intelligence community,2 and how governments “now operate in a real-time, worldwide decision and implementation environment. The total ‘intelligence-decision-implementation’ cycle time can be as short as 15 minutes”. But this does not just apply to governments. “It is characteristic of the way the world works in the 21st century. Thus, not only do we respond more quickly, but also the circumstances to which we respond — in and of themselves — develop more quickly.” He argued that a secure wiki within the intelligence community would help them to “adapt to the rapidly changing national security environment”. It sounded a lot like the situation we found ourselves in and we decided to test whether a wiki could be a viable KM tool for us.
 
We created our “contractswiki” based on the premise that by collaborating and sharing knowledge, we are getting information out of people’s heads and hard drives and into a tool that benefits everyone. While the information is safely behind our firewall, anyone at Oracle can access its pages. Sales can now go to a page created just for them and find useful information and links to help them with the contracts process. Contracts can find critical information and updates about the tools we use every day. There is training information and pages that are specific to each division. There is no limit to the amount of business-related information that we can share — and anyone can edit. What do you do if you see an error on a contractswiki page? You fix it. What if there is some critical information missing? You add it. And if everyone contributes, the information stays fresh and relevant.
 
The idea is that each employee knows something about the organization and its practices and processes. Collectively, through the wiki, the organization stores this information and makes it searchable. Unless information is stored and made searchable, the information that each individual has within the organization is only valid for as long as the employee remains within the organization.
 
Of course, there are challenges. The most heavenly pastries in the world will go untouched if people do not enter the bakery to try them. It wasn’t enough to simply announce that the wiki was available. We had to show people the value it could provide them in doing their jobs. We embedded links to relevant pages in our communications with staff. We even redesigned our internal site to become a portal to the wiki.
 
Another challenge has been trying to change a culture where emphasis was placed only on the hunting and gathering of information. Now we are asking employees to create a more utopian culture of sharing the information that they have collected. Some readily share what they know. Others are more cautious, unsure of what they know or whether it has value to others. This change takes time and we are still working hard to demonstrate how this tool can empower everyone to make a difference in the organization.
 
And don’t let people tell you they are too busy to update the wiki. I often get emails letting me know that a piece of information on our wiki is incorrect and needs to be updated. When I tell them that they have the ability to update the information themselves and that they could have done so in the short time it took to send me the email, their response is usually one of amazement that contributing to the wiki is so quick and easy.
 
A few people remain skeptical, but overall the feedback has been very positive. Several other organizations have contacted us seeking information about setting up their own wikis. Managers are now asking their direct reports whether have first checked the wiki when they come to them with questions about an issue that is already addressed there.
 
Now, even the best wiki will not have the answer to every question. And there are still many instances where one will need to ask a question. But where do you go once your peers and manager are unable to provide the information you need? In the past, I have seen people sending out mass emails in the hope that someone with the information they need will respond. Other times, certain individuals will be identified as experts on a topic, and they soon find their inbox teeming with questions.

That happened to someone on my team — unanswered enquiries were escalated to her from all around the globe. As that is part of her job description, it was expected. But when we determined that she was spending nearly 50% of her time answering repetitive questions, and putting other critical tasks aside, we needed to find a solution. Enter Oracle’s version of Facebook: Oracle Connect.

Oracle Connect

Most people are familiar with Facebook. With over 250 million active users worldwide, odds are you probably log in yourself. Oracle created a similar environment for its employees, called Oracle Connect. In addition to being able to add people to your network, there are different groups that enable you to interact with employees who share the same background or interests. For example, I joined a group that is dedicated to iPhone users. I noticed that many members of the group would post questions like, “Does anybody know how to …?” and “Can someone tell me where to find …?”. Posts could be seen by logging into the site, by email alerts or by using RSS feed technology. Best of all, people responded because they wanted to share their knowledge.

Determined to find a way to free up time for my team member mentioned above so that she could focus on a key project, we decided to create a group for all of the employees in our organization in a particular role. We invited them to join the group and post their questions online. The result was amazing. Someone in Australia could post a question that would be answered by someone in Romania who had encountered the same issue. Once answered, that information was there for everyone to see. Now, the co-worker in the cube next door could actually be located in another hemisphere! And as information matures it is moved to the wiki, as needed.

By implementing these social networking tools to assist us with our KM, my operations team has reduced the amount of email traffic coming across our desks by approximately 35%. This has allowed us to work on other initiatives in our constant effort to ensure that our organization has the information it needs to be successful. We frequently use the terms “wiki” and “Oracle Connect” during our regular staff meetings, and the effectiveness of our KM efforts is measured as a part of our regular performance evaluations. The manner in which we manage knowledge has become as important as the knowledge itself.

Involve every expert

Involvement in sharing knowledge using these technologies is not limited only to employees in our contracts organization. Because we rely on other organizations to provide information and policies to us so that we can adjust our own practices and processes, it was important that those groups be involved in these KM activities — our own knowledge is built upon theirs. We were able to involve key individuals from these outside organizations to assist in answering questions through Oracle Connect. Doing so helped them to see opportunities to clarify or create policy and to see first-hand how those policies affected our organization.

The next generation of KM

Where do we go from here? There are still plenty of current technologies that we have not tapped for our KM activities. For instance, microblogging, or “tweets”, could be a useful tool. And there are still technologies that are being developed that will certainly provide additional and more robust ways to share knowledge. What is most important is that we leverage all of the technologies available to us so that every contracting professional has the information they need when they need it. Today’s workforce demands it. Today’s business environment demands it. You should too.

 
Michael D Greener,
Senior Director of Business & Integration Operations for the Global Contract Services Organization, Oracle, Email: michael.greener@oracle.com,
www.oracle.com.
Endnotes
 
1. Levinson, M “Knowledge management definition and solutions”, www.cio.com/article/40343/Knowledge_Management_Definition_and_Solutions (14 July 2009).
2. Calvin Andrus, D “Toward a complex adaptive intelligence community: the wiki and the blog”, https://www.cia.gov/library/center-for-the-study-of-intelligence/csi-publications/csi-studies/studies/vol49no3/html_files/Wik_and_%20Blog_7.htm (13 July 2009).
About the author
 
Michael D Greener graduated in 1990 from Brigham Young University and received his JD from Seattle University School of Law. Following a period in private practice, Michael joined Oracle’s Commercial Contracts organization in 1998.
 
 


 

Accenture's Contract Management Information Channel

 
Knowledge capital is one of the most valued assets of a company. A strong knowledge management system truly affects the bottom line, providing an overall benefit to companies striving to achieve high performance. Accenture’s internal research has shown that a good knowledge management system has many benefits, including increasing the rate of innovation, improving job performance, reducing the time a workforce achieves competency, decreasing knowledge loss from turnover, reducing operating costs and assisting with globalization. MARGARET SMITH, Accenture
 
 
by MARGARET SMITH, Accenture

Key points
 
• Knowledge can be successfully shared throughout an organization by using the proper tools and methodologies.
• The value of a winning knowledge management system is measured over time and proven effective as reflected in cost savings and overall efficiencies.
• Nothing is constant, even the best knowledge management system grows and evolves over time.

Introduction
 
Knowledge capital is one of the most valued assets of a company. A strong knowledge management system truly affects the bottom line, providing an overall benefit to companies striving to achieve high performance. Accenture’s internal research has shown that a good knowledge management system has many benefits, including increasing the rate of innovation, improving job performance, reducing the time a workforce achieves competency, decreasing knowledge loss from turnover, reducing operating costs and assisting with globalization.
 
As companies continue to expand into the global marketplace and their need for virtual support increases, a reputable, tested and up-to-date knowledge management system will become even more critical for any company to survive. At Accenture, the Knowledge Exchange (KX) is available to all employees and is frequently used — with more than one million downloads from the site each quarter. Complementing the KX, the contract management organization has its own knowledge management site — the Contract Management Information Channel (CM Info Channel) — which concentrates vital contract management information in one location. Since its inception more than a year ago, the CM Info Channel has been accessed more than 313,247 times.

CM Info Channel

The CM Info Channel is an internal website designed to quickly help new contract management professionals (CMPs) to get up and running and stay on top of changes and challenges that can affect their management of contracts on the various projects that we support. It gives them an understanding of what is required of them with respect to policies, procedures and best practices. It also helps them to remain up-to-date and in compliance with the required obligations related to contract management support at Accenture. More than 500 CMPs have access to the CM Info Channel.

Based on both formal feedback (including surveys) and informal feedback (for example, email and to CM “people advocates”), we have evolved — and, we believe, perfected — the CM Info Channel over the past three years, and we will continue to evolve the site. Through this feedback we also know that the site has enabled our contract managers to find relevant content more rapidly, which translates into less time spent looking for information and more time spent delivering value to Accenture and its clients.

What the Info Channel looks like

Upon entering the CM Info Channel, there is a menu that reflects a highly organized knowledge management system. The menu includes some of the following information:
 
· CM toolkit
— Contract Management implementation suite
— Policies affecting CM
— CM processes
· Knowledge warehouse
— Accenture links
— Knowledge capital
— Meeting materials
· Training and development
— Career counselling
— Mentoring
— CM-related training
· What’s new
— Personnel updates
— Announcements of other updated materials
· People
— Calendars
— Contacts
— Initiatives/global projects
— Organization charts

Some elements of the CM Info Channel
 
· CM processes
   The CM processes that Accenture provides to its CMPs include policies, processes, templates and best practices.
· Training and development
   The training and development area gives CMPs access to all teleconference training materials, including such topics as deliverables management, IP management, Accenture policies, risks and issues management.
· Best practices
   Policies and procedures, and best practice samples provide all CMPs with the ability to perform a quality check to help ensure that processes they are using are in line with Accenture’s policies and standards.

Advantages of the CM Info Channel
 
Apart from its cost-effectiveness, the most prominent benefits include:
 
· the ability to keep seasoned CMPs updated and trained as needed, and to keep training materials current;
· consistency with contractual documentation, processes, documents, and so on for supporting projects;
· a centralized location where contractual-related documents, processes and related information are housed;
· the need to “start from scratch” is minimized for contractual templates, processes, tracking logs and so on; and
· ease in locating best practices for new and seasoned CMPs.

Accuracy, confidentiality and sharing of information
 
Prior to the release of any documentation and materials onto the CM Info Channel, all items are reviewed, approved and revised if necessary by the dedicated owners of the website and management. All materials are updated on a regular basis to keep CMPs current with industry and Accenture standards. The website has security protection so that only a few people have access to upload or change any documentation within the site. The CM Info Channel is confidential and for use by CMPs and select Accenture personnel. Case studies do not mention clients’ confidential information or any other specific information that could be linked back to the client and their confidential information or data.

Challenges in developing a knowledge management system
 
The main challenges that the team encountered in developing and managing the system included the time required to:
 
· develop and gather the necessary documentation;
· develop the back-end database system;
· train CMPs to use the system effectively; and
· promote ongoing use of the system by CMPs.

Statistics prove beneficial
 
We monitor the site to help ensure that it is being used and is providing valuable information. The most current statistics indicate that the site is being accessed on an ongoing basis by most CMPs. Additionally, annual surveys are performed to gather information to improve the system, as needed.

Concluding remarks
 
The knowledge base of a company’s employees represents a massive resource and a critical asset. At Accenture, the more efficiently employees can tap into each other’s expertise, the more effectively we can respond to the needs of our clients. The CM Info Channel site is always evolving — as any good knowledge management system should. Accenture’s focus on sharing knowledge helps everyone in the company, ultimately helping Accenture to achieve high performance.
 
Margaret Smith, Executive Director—Contract Management, Accenture, Email: margaret.smith@accenture.com,www.accenture.com.

About the author
 
Margaret Smith joined Accenture in 1989 and has held a variety of roles ranging from extensive commercial negotiations with both clients and subcontractors, running large teams, building new practice areas, and running large bids for both public service and commercial clients. Margaret has worked on a number of large clients for Accenture in North America, the United Kingdom and Norway. She has also performed the internal role of operations lead for Banking in Northern Europe and South Africa, commercial director in the UK and director for Contract Management for Europe, Africa, the Middle East and Latin America.
 
 


 

Conversational engagement versus static accessibility: sharing knowledge in the 21st century

 
In August 2008, I wrote an article titled “The Web 2.0 Association: a dynamic engagement between stakeholders sharing the same interests and goals”. The basis for the article was tied to the fact that, by and large, the majority of associations and the models under which they operate have become somewhat stagnant as a facilitator of dynamic (and meaningful) interaction among their membership. JON HANSEN, Procurement Insights
 
 
by JON HANSEN, Procurement Insights
 
Key points
 
• Old mindsets must be set aside in favor of a more progressive view that is commensurate with the growing awareness that an organization’s purchasing team is not merely a functional extension of another department, but plays a critical strategic role in the emerging global enterprise.
• This is not just limited to purchasing, as both CIOs and CFOs are going through a transformation that is based on a collaborative versus a siloed view of organizational duties and complacent relationships.
• A key enabler for this change in outlook is the various social networks and mediums. But it is painfully apparent that the recognition of how social networks can and ultimately will influence both conversational insight and the purchasing function itself is lost on the majority of procurement professionals.
 
In August 2008, I wrote an article titled “The Web 2.0 Association: a dynamic engagement between stakeholders sharing the same interests and goals”. The basis for the article was tied to the fact that, by and large, the majority of associations and the models under which they operate have become somewhat stagnant as a facilitator of dynamic (and meaningful) interaction among their membership.
 
This is a sentiment that was reflected in the numerous comments I received, such as the following from a global logistics specialist in Panama. (Note: the fact that the article was able to solicit responses from Panama and other parts of the world gives testimony to the reach and therefore expanded perspective provided through a dynamic Web 2.0 engagement capability.)
 
“Where it once did, the value gained from the traditional association model can no longer compete for my attention. I need to collaborate bigger, faster, stronger — and at my convenience.”
 
This is a telling statement, especially given that the Rodney Dangerfield mantra “I get no respect” has dominated the collective psyche of a profession that has traditionally been viewed as an adjunct of finance.
 
The fact is that the increasing recognition that an organization’s purchasing team is not merely a functional extension of another department, but in reality plays a critical strategic role in the emerging global enterprise, means that old mindsets must be set aside in favor of a more progressive view that is commensurate with this growing awareness.
 
Part of this revised outlook — which is not just limited to purchasing, as both CIOs and CFOs are themselves going through a transformation that is based on a collaborative versus siloed view of organizational duties — is to break out of the manacles of complacent relationships. In short, we have to stop going to the familiar wells of knowledge and long-held bastions of outdated expertise, and begin to expand our horizons of understanding. And a key enabler for this expanded insight is the various social networks and mediums.
 
Unfortunately, and as demonstrated by a recent question posed on LinkedIn regarding Twitter, it is painfully apparent that the recognition of how social networks can and ultimately will influence both conversational insight and the purchasing function itself is lost on the majority of procurement professionals.
 
While some associations, such as the Institute for Supply Management,have established at least a presence within the realms of various social networks, rather than leveraging the conversational dynamic of the new medium to broaden engagement, they have simply resorted to the same kind of broadcasting practice that is indigenous to a static website. In short, they are going to where the new people are but are failing to engage them and therefore capitalize on what Ecademy’s Thomas Power referred to as “the law of random connections”. (Note: according to Power’s law, it is “the people you don’t know who are the most important”.)
 
This is tantamount to a nomadic strategy whereby associations simply pick up the entire outdated infrastructure (website), and move it to a social media platform. Or worse, maintain the same static website (which, of course, does have a purpose in terms of serving as a transformational bridge) and dutifully establish return links in the hope of generating traffic. Traffic activity means very little, of course, if it is not reflective of either a practical utilization or an expansion of the existing knowledge base but is instead a repository of the same people saying the same things.
 
It is therefore not unreasonable to think of most association websites (or, for that matter, websites in general) as a stationary library with endless “shelves” of information. While you can search through the site to pull a topic of interest, the hushed atmosphere (isolated experience) of a library provides little opportunity to actively engage others — especially those who may not be members of that particular branch (or association).
 
Alternatively, if you bring your book into a nearby coffee shop, the opportunity for open discussion in a welcoming atmosphere enables you to expand your understanding of a particular topic through the conversational engagement of other patrons, be they known or not. The value of the social network platform is that it removes what for many are the uncomfortable barriers of approaching a stranger face-to-face.
 
I do not want you to mistake my reference to a static website as a denouncement of websites in general, because it is possible to have a site that is truly interactive and in the process complements the various social media platforms with which it is connected. In fact, in certain instances a website structured around a proactive inclusionary framework might even be preferable, as it serves as a filtering mechanism for the infinitely expanding sea of information that is available through the internet. However, and as research clearly demonstrates, the majority of websites lack the capacity to both engage and maintain the conversational give and take that is necessary for the meaningful, ongoing interaction of an expanding network of contacts.
 
And even though statistics clearly indicate that venues such as Twitter can experience a 60% drop off in terms of new user  activity, the retention rate is still considerable. Therefore, it is an important facilitating platform that continues to engage people who otherwise would not have even ventured at this stage into the world of social media. How many websites can say that? And, at the end of the day, it is the frequency of interaction with ever-widening perspectives that ultimately stimulates both the level of knowledge being shared and its sustaining veracity.
 
Jon Hansen, Procurement Insights, Email: jwhansen@sympatico.ca, www.sympatico.ca.
 
About the author
 
Jon Hansen has studied and written extensively about e-procurement and the changing face of procurement around the globe. His Procurement Insights Blog reaches 300,000 syndicated subscribers each month worldwide, and is currently available in several languages. Funded by the Government of Canada’s Scientific Research and Experimental Development (SR&ED) program, Jon’s work in identifying the existence of commodity characteristics, as well as defining and recording their impact on “best value” purchasing practices, represented a seminal breakthrough that led to the establishment of new theories surrounding the practical utilization of synchronized platforms in achieving sustainable coordinated savings and overall process efficiencies.
 
Jon is also the host of the acclaimed PI Window on Business Show on Blog Talk Radio (BTR).
 
 


 

Building a Business Case for a Contract Management Solution: Strategies for Securing Executive Sponsorship

 
This article by Allen Pogorzelski, Selectica Inc, and Neville Letzerich and Leslie Weller, EMC Corporation, is the special sponsoring contribution to this Knowledge Management issue. ALLEN POGORZELSKI, Selectica, Inc., NEVILLE LETZERICH, EMC Corporation and LESLIE WELLER, EMC Corporation (Photos: Allen & Neville)
 
 

by ALLEN POGORZELSKI, Selectica, Inc., NEVILLE LETZERICH, EMC Corporation and LESLIE WELLER, EMC Corporation

Key points

• Create a compelling business case that emphasizes outcomes.
• Get other parts of the organization involved.
• Map business goals to specific capabilities and functionality provided by the technology.
• Leverage third-party expertise as you build your business case.
• Align ROI expectations to commitment levels.

In the past year, most companies have gone through several rounds of belt-tightening. While most executives now see the value of contract lifecycle management (CLM) solutions, and the value of these solutions has been well documented in third-party research, today many contracting professionals are seeing their initiatives stalled or cancelled due to lack of funding. In this economy, gaining executive buy-in and receiving the green light to fund an initiative requires professionals to work harder in building a rock-solid business case that articulates how these solutions will achieve company goals and deliver a strong return on investment (ROI). 

Achieving the business benefits desired by a software implementation requires the development of a business case that gains executive buy-in, gets funding and helps to drive effective implementation of the solution. The five strategies outlined below will help you in building your business case.
Strategy 1: Emphasize outcomes

“Contracts should be viewed as tools to build better business partnerships and to ensure successful business outcomes,” says Tim Cummins, president and CEO of IACCM. “With CLM software, companies can create and enforce well-defined contract procedures, assure clear allocation of roles and responsibilities, and establish a proactive execution environment.” These core messages should come across in your business case.

In addition, in a June 2009 IACCM webcast, Building a Business Case for a Contract Management Solution, Mickey North Rizza, Research Director, AMR Research, stated that a business case should demonstrate how a CLM solution will:

· increase contract visibility across the business;
· provide an avenue to link sales to supply-side processes;
· eliminate the need for disparate systems and redundant workflows;
· reduce contract cycle times;
· enable collaboration across the enterprise; and
· provide top- and bottom-line results.

Above all, Rizza says, when preparing a business case, companies should always keep in mind their own specific objectives, clearly identify the magnitude of the business problems they’re trying to solve and quantify the continued cost of doing nothing.
Strategy 2: Get other parts of the organization involved — take an enterprise approach

Contract management is often viewed from a departmental perspective. This approach has led many companies to spend hundreds of person hours creating department-specific systems, processes and workflows that aren’t transportable to any other department facing similar challenges. As a result, efforts are duplicated, resources are wasted, and changes to company-wide policies and procedures are often enacted slowly and unevenly. 

When building a business case for an automated CLM solution, achieving executive sponsorship can hinge on taking an enterprise approach that delivers a faster ROI, greater bottom-line benefits and improved visibility across all departments. While contract professionals sometimes fear getting other parts of the organization involved because they’re worried about slowing things down, cross-departmental participation is essential Leveraging a knowledge management system can more easily facilitate the necessary cross-functional flow of information. With feedback and support from legal, procurement, sales and finance, your business case will be much stronger, you’ll have much greater support, and you’re more likely to achieve a funded initiative.
Strategy 3: Identify the specific CLM solution capabilities required to achieve your business goals

While companies preparing CLM business cases typically include their business goals, some overlook the importance of outlining the specific solution capabilities that will help them to achieve these objectives. As a result, their business cases are often less credible and compelling. If a business goal is to cut contract cycle time in half, for example, the business case should specify the capabilities of the solution that will help achieve this result, such as parallel approvals, fax integration and digital signature support. If improving collaboration and providing access to corporate knowledge is one of your primary business objectives, you should specify in your business case how the CLM system will integrate with your knowledge management system. Too often, business criteria outline generic capabilities that don’t directly support the business value companies are seeking.
Strategy 4: Leverage solution experts when building your business case

A business case will carry more credibility with executives if it contains content that demonstrates the value of the technology to your organization — the kind of content that is often best created by people with extensive CLM experience. But at the point when a business case is being developed, companies typically lack this depth of knowledge.

Some prefer not to consult with vendors because they feel that this is like “sleeping with the enemy”. The reality is that technology vendors have been down this path dozens of times and can readily provide data and insights, usually at no cost. In addition, experts can facilitate creation of collaboration teams across the enterprise, assist in defining precise business objectives, and ensure that the selected software can offer the functionality required to meet these goals.
Strategy 5: Align ROI expectations with your level of commitment

Before putting together a business case, most companies familiarize themselves with analyst reports and a wide variety of market information. While this information is valuable as background, it must be considered with a critical eye. 
Market research reports tend to present eye-popping metrics from companies that have fully implemented the entire range of high-end CLM solutions’ functionality. While these are most certainly accurate for the companies reviewed, your results may differ substantially. Some professionals have damaged their credibility and their careers by promising those same eye-popping ROI metrics without first taking a critical look at their companies’ level of commitment to making investments in people, training and advanced technologies. Companies that don’t view contract management as strategic don’t get executive support and visibility, and if they don’t choose to implement more advanced solutions, they rarely achieve results that make headlines.
 
There is no doubt that CLM software delivers enormous benefits that can quickly pay for the entire investment and go on to add value to your company. Sample hard and soft ROI metrics can be found in Figures 1 and 2. But these benefits are contingent on the sophistication of the technologies chosen, the way it is implemented, and the internal commitment to make the implementation successful. Expressing these factors clearly and openly in the business case — and setting real expectations for ROI — can go a long way towards achieving executive buy-in. 

In conclusion, there are many factors that make a CLM implementation successful, but invariably they all begin with the business case. Only by creating a compelling business case that secures executive sponsorship and funding can a project move off the drawing board and into the enterprise. 

To learn more about building a compelling business case for a contract management solution at your company, IACCM members can view a webcast featuring speakers from IACCM, AMR Research and Man-Tech at www.selectica.com/businesscase.

The article references a related webcast we conducted, available at www.selectica.com/businesscase. If you need a link to our companies’ websites, please use www.selectica.com and www.emc.com/solutions/business-need/transactional-content-management/contract-lifecycle-management.htm.
 
Allen Pogorzelski, Vice President of Marketing, Contract Management Solutions, Selectica, Inc, Email: apogorzelski@selectica.com, www.selectica.com, and
Neville Letzerich, Vice President and General Manager — Transactional Content Management, EMC Content Management and Archiving Division, EMC Corporation, Email: emc_live@emc.com, www.emc.com.
 
Co-authored by
Leslie Weller, Senior Solutions Marketing Manager, EMC, Email: emc_live@emc.com.
About the authors
Allen Pogorzelski has over 18 years of experience helping companies to understand, implement and derive value from new technologies. As Vice President of Marketing for Selectica, he is responsible for the company’s overall corporate and product marketing strategy. He has also held roles at early pioneers in contract management software, as well as leaders in CRM and business intelligence.
 
EMC (NYSE: EMC) is a world-leading developer and provider of information infrastructure technology and solutions. Neville Letzerich is the Vice President and General Manager with overall responsibility for EMC’s transactional content management offerings which include imaging, data capture/classification and business process optimization. His functional responsibilities include product strategy and management, product development, product marketing and product business development. Leslie Weller is a Senior Marketing Manager for EMC Corporation in its Content Management and Archiving (CMA) division.
 

Figure 1: Sample hard ROI metrics

 

 

Figure 2: Sample soft ROI metrics

 

 
 


 

 


 

 

How knowledge management could help to avoid crises, such as the global financial crisis

 
I think that crises such as the current global financial crisis could be avoided, or at least better managed, if knowledge management (KM) principles were applied. By "knowledge management" I mean:  ...a multi-disciplined approach to achieving organisational objectives by making the best use of knowledge. KM focuses on processes such as acquiring, creating and sharing knowledge and the cultural and technical foundations that support them. The aim is to align knowledge processes with organisational objectives.1 PATRICK CALLIONI, Enterprise Intelligence Pty Ltd
 
 

by PATRICK CALLIONI, Enterprise Intelligence Pty Ltd 

Key points
 
• Complex systems, such as the global financial system, are inevitably going to undergo crises.
• While crises are unavoidable, we can take steps to lessen their frequency and negative impacts.
• To do so, we need to develop tools to make the financial system more resilient and capable of self-healing.
• Knowledge management principles and practices can help to develop those tools and to use them wisely.
 
I think that crises such as the current global financial crisis could be avoided, or at least better managed, if knowledge management (KM) principles were applied. By “knowledge management” I mean:
 
… a multi-disciplined approach to achieving organisational objectives by making the best use of knowledge. KM focuses on processes such as acquiring, creating and sharing knowledge and the cultural and technical foundations that support them. The aim is to align knowledge processes with organisational objectives.1
 
Research suggests that the organizations that are most likely to achieve long-term survival can reconcile the conflicting forces for change and stability and can maintain a dynamic fit with their environment.2 This is especially true in a highly changeable environment, such as we find in the financial services sector.
 
Why is the financial system so important?
 
The wellbeing of society depends on how well the financial system runs. The purpose of the global financial system is to enable capital to go where it can get the greatest return for its owner. Its fundamental purpose is to allocate risk, leveraging trust to do so, because money is a substitute for trust.3
 
Ideally, this global risk engine would operate like a machine, using the information available to it to allocate risk where it is best dealt with. Alas, the financial system is fallible, like all human creations. Information is always imperfect or incomplete; profit is not always the motive of the actors and the laws of economics have to interact with the even less rational laws of politics.
 
Because the ability of the financial system to allocate risk depends on people, risk is not always placed in the safest hands or on the strongest shoulders. It lands where it will, and when the bubble bursts, people and economies get hurt. While economists delude themselves that economic laws protect us from systemic failure, all that stands between us and disaster is a thin web of regulation, which has proved itself to be inadequate to the task.
 
In the United States, company directors must make an assertion to shareholders that the proper controls over financial reporting are in place and working effectively. That assertion must be based on reasonable evidence, which must be open to scrutiny and has to exist in documented form. The documentation must cover all relevant controls and procedures needed to effect control and must identify the crucial elements of control, evidence that those controls have been tested adequately, and how any shortcomings were or are being addressed. Also, if shortcomings are identified, the documentary evidence must show that they are not significant and explain why that is so. An external auditor has to provide an opinion on the directors’ declaration, and the auditing process, which is long and cumbersome, must itself be documented. All of this is subject to further auditing by the Public Company Accounting Oversight Board. None of this stopped Ken Lay or Bernard Madoff, did it?
 
The problem with current regulatory arrangements is that they focus on the wrong place, because they do not pay sufficient attention to where the money is going. For example, to prevent Ponzi schemes from taking hold, I would ask the fund to account officially for expenditures and for placements of funds, and I would also track large transactions in the banking system.4 This would add transparency to the system, would boost confidence and would reduce uncertainty.
Any significant uncertainty in the world of finance is amplified into economic disruption and social instability. The efficient functioning of global supply chains is then threatened, as governments, companies and individuals retreat from risk and cut back on demand. Reduced demand drives a vicious deflationary cycle, which develops its own momentum and produces negative consequences far greater than the original shock to the system might seem to warrant. Middle-of-the-road, sensible politics tend to be pushed aside, often replaced by extremist left or right solutions.
 
My fear in these times of turmoil is that governments may want to fix regulatory frameworks by over-regulating, while others, for ideological reasons or driven by greed, claim that what we need is less regulation. What we need is regulation that is fit for purpose, balancing competing interests and allowing each of us to get on with the business of business. This is where KM can help.
Move to a solution based on KM principles
 
What I propose is a solution based on KM principles, a federated network of trust as an alternative to cumbersome transnational regulation and as a replacement for the inadequate arrangements currently in place. This has been done before.
 
The development of marine insurance laws was fundamental to the development of mercantile economies and to capitalism in general. What is significant here is the time it took for such developments to occur, starting with city authorities, such as Barcelona in 1434,5 enacting codes or ordinances that would not develop into a form we would recognize until the latter part of the 18th century.6 In the 21st century, we cannot afford to wait for hundreds of years while the rules evolve to suit our requirements; we cannot even wait decades, largely because of the speed of technological development and its social, economic and cultural consequences.
 
Yet, while time is short, the challenge is ever more complex. The challenge is to balance what government wants — maximum compliance — with what business wants — minimum interference and no unnecessary costs. The consequent trade-off for a regulatory system is effectiveness versus transaction costs.
 
From rule-based to principle-based regulation
 
What we need to do is to move from rule-based towards principle-based regulation. Rule-based approaches work well in simple, predictable systems. They do not do well in complex, unpredictable systems. When rule-based approaches falter, they produce uncertainty, which undermines confidence in the system’s ability to manage future risk. As we have seen, the effects of that loss of confidence can be dramatically bad.
 
A fundamental objective must be to reduce uncertainty. We can do that by lessening complexity or by reducing unpredictability. Because we can do little to lessen complexity, we must focus on reducing unpredictability. Because we cannot predict the future, we must make the system better able to adapt and to react appropriately to external shocks and to the consequences of its own failings, using KM principles.
 

Using those principles, we can put in place a regulatory framework that encourages and rewards openness and transparency and punishes secrecy and opaqueness. Figure 1 illustrates how this transition from rules to principles can be effected and how information and communication technology (ICT) offers a model from which we could learn.

 

 

 
Cert model
 
The world of computers is as vulnerable to viruses as we are, and how we defend ourselves from “disease” in the ICT world is very similar to what we do in the real world. We rely on building robust systems, vaccinating regularly and responding quickly and effectively to crises — thanks to a federated global network, with national control, that enables sharing of knowledge and prompt diffusion of remedies, curative and preventive. That model is known as CERT, which is short for Computer Emergency Response Team Coordination Centre (CERT/CC). There are CERTs in government agencies and in corporations. Each CERT operates independently, a creature of its owners, but they coordinate their activities across the world, voluntarily, recognizing that this is the only way to deal with a global threat to a complex global system originating from many sources.
 
The CERT model focuses both on responses to specific incidents, which is where it has its origins, and on identifying and addressing existing and potential threats, notifying system administrators and other technical personnel of these threats, and coordinating with vendors and incident response teams globally to address the threats. And it all seems to work, because the model focuses on sharing, managing and exploiting knowledge acquired or developed by many for the collective good of all.
 
This approach makes the CERT model capable of learning as it deals with each problem or incident. Once it has learned something useful, the model easily socializes that learning across the globe, quickly reaching those who need to know.
 
CERT also supports activities intended to harden the system against known or probable threats, for example by assisting critical infrastructure owners and operators to identify vulnerabilities in computer systems and related networks, and to test their ability to resist exploitation and attack. In Australia, the Government CERT provides financial assistance to do this and access to a panel of vetted and trusted consultants. This seems to be a more sustainable approach than forcing financial institutions to undergo expensive stress-testing, which is conducted too rarely to be of any real value in strengthening the system.
 
Of course, merely constructing a CERT equivalent would not fix the global financial system. In a book that will be published later this year, I put forward a solution, incorporating CERT, that would give us a fix.7 However, I am using CERT to show that we can learn from other realms of human activity and that principles developed to manage one complex system can be used to design a better way of managing another. We can also draw lessons from past experiences, in the world of finance or elsewhere, such as public health, where similar factors are at work. But in the world of finance, experts obstinately stick to the logic people used in the Middle Ages. Each time we face a crisis, we think we are dealing with something new; we retreat behind national or corporate moats; we blame individuals for causing or spreading the plague; and we fiddle at the edges, ignoring the real causes of the problem.
 
Investment bubbles are part and parcel of the market system and, like the poor, they will always be with us. Individuals do not cause a bubble to burst, though they may seem to be doing just that; once a bubble has inflated, anything will serve to puncture it, if the conditions are right. Like vinegar flies, crooks and charlatans will always be attracted by a market gone sour and will seek to profit from it, but they are not the cause of the problem. It is not individual greed that causes a bubble, but our collective greed.
 
Focusing on overpaid executives is scapegoating, channelling the anger of the crowd onto a few individuals so that we can avoid accepting our own share of the collective guilt, just as Jews and others were scapegoated in medieval Europe whenever a pandemic of plague broke out, because our ancestors did not understand that their poor hygiene and a liking for crowding into towns were to blame for the disease and death that had befallen them. Becoming aware of all this would be a useful first step towards meaningful, constructive change, and KM can play an important role.
 
 
Patrick Callioni, Managing Director, Enterprise Intelligence Pty Ltd, Email: patrick.callioni@enterpriseintelligence.net.au.
 
Endnotes
 
1. Taken from www.knowledge.standards.com.au/KM/INFO/KMINTRO/KMINTRO.HTM on 7 October 2003.
2. A De Geus et al’s The Living Company (1997) remains the best source of guidance on this subject.
3. Shubik, M Theory of Money and Financial Institutions, MIT Press (1999).
4. Media reports (eg, Associated Press at www.google.com/hostednews/ap/article/ALeqM5hp_FtaxDqD00vJHWQ6AOZfM6TYHAD95OCLH80) suggest that investigators have found no record of any share placement by Bernard Madoff’s organization during its entire existence. If that is so, then the incompetence of the regulators and the ineffectiveness of the regulatory regime in the United States are indeed proven.
5. Gow, W Marine Insurance: A Handbook (4th ed), Macmillan & Co Ltd, London (1917).
6. Boi,G “The marine insurance system in Italy: its present, its future”, in Marine Insurance at the Turn of the Millennium, Vol 1, ed by M Huybrechts, E V Hooydonk and C Dieryck, Intersentia, Antwerp (1999).
7. Waves of Change: Managing Global Trends in the Financial Services Industry, Global Professional Publishers, likely publication date is September 2009.
 
About the author
 
Patrick Callioni is the Managing Director of Enterprise Intelligence Pty Ltd, a consulting company that specializes in helping business to do business with government and vice-versa. Patrick has recently retired from the public service, where he held several senior executive positions since the 1980s. His last role was as Deputy CIO for the Australian Government.
 
 

Getting the most out of contract metadata

 
Contract relationships are becoming ever more essential to business, non-profit and governmental organizations. Operations formerly thought of as “core”, such as HR or distribution, are rationalized for outsourcing. Information technology has shifted from “build” to “buy”. Purchasers of complex goods and services are often looking to shift whole domains of risk to providers, and providers in turn seek to limit their obligations. Dependencies and risk exposures can extend to counterparties’ contracting partners and beyond (eg, supply chain risk). For many organizations, contract management is a core competency — and one that cannot be contracted away. Management techniques, including information and control structures, that used to reside within an organization have moved outward and become the subject of contract.  CAROLYN PARIS, London School of Economics
 
 
by CAROLYN PARIS, London School of Economics

Key points

• Knowledge management for contracts is increasingly important, but classic management information systems fall short.
• Basic approaches to knowledge management include better management of contract documents and capture of contract “metadata” (ie, structured data about contracts).
• Contract metadata ranges from simple “fill-in-the-blank” information to more complex information about the contract document, such as whether certain types of contract terms appear, and can also include information about the contract that does not appear at all in the contract document.
• Capturing contract metadata — opportunities, challenges and trade-offs: a number of practical issues that contracting professionals should consider when thinking about capturing contract metadata.

Contract information in the networked economy

Contract relationships are becoming ever more essential to business, non-profit and governmental organizations. Operations formerly thought of as “core”, such as HR or distribution, are rationalized for outsourcing. Information technology has shifted from “build” to “buy”. Purchasers of complex goods and services are often looking to shift whole domains of risk to providers, and providers in turn seek to limit their obligations. Dependencies and risk exposures can extend to counterparties’ contracting partners and beyond (eg, supply chain risk). For many organizations, contract management is a core competency — and one that cannot be contracted away. Management techniques, including information and control structures, that used to reside within an organization have moved outward and become the subject of contract.

In this environment, organizations need better knowledge management for contracting. Beyond contract and legal compliance, there are risk management and strategic information needs, relating to (for example) valuation, counterparty relationships, supply chain risk, trends and patterns, market share or league table information, and mergers and acquisitions. More generally, contracting represents not only the organization’s principal economic exchange, but also its information exchange with the outside world. So contracting not only requires good knowledge management, but should also be a contributor to it.

Management information systems typically focus on transactions and financial accounting, developed to serve a different, vertically integrated business model. Enterprise resource planning (ERP) systems incorporate more and more of an organization’s internal operations into a structured database version of the enterprise. Neither seems to offer an ideal knowledge management platform for contracting in the networked economy. If anything, contracting is sometimes driven by these schemes (who is not familiar with the pressure to meet quarter-end targets?). A better place to start is with contract document management and the capture of contract metadata.

Contract documents versus contract metadata

Managing contract documents is fundamental to any knowledge management platform for contract. Organizations need to be able to locate the definitive, legally binding contract documents, even in those many cases where the contract document does not provide a complete and accurate picture of how the contracting parties are actually working together. Contracts, like other important corporate documents and records, need to be stored, preserved from tampering or inadvertent alteration, associated with other relevant documents and records, made available to those who need to see them, and protected from improper access. Searching for a contract document is not a question of “relevance ranking” — identification and retrieval need to be precise and exact.

Contract metadata means structured data about a contract

Structured data is information that has been organized under a classification scheme, so that it can be put into a spreadsheet or database. With structured data you can search, aggregate, calculate, test, report out and so forth — the information becomes more powerful in an operational sense than when it was locked up in documents.

Contract metadata is associated with the relevant contract through coding or tagging — for example, by identifying a contract by counterparty name, or attaching a product code to a sales contract for the product. Sometimes the contract metadata (eg, the name of the book that you buy from Amazon) associates to the contract automatically when the contract is made; in other cases, coding is a separate, manual process.

Contract management software, also called contract lifecycle management (CLM) software, typically incorporates (and integrates) contract documents and contract metadata as part of the product offering. However, a well-organized file cabinet of paper contracts indexed to a corresponding spreadsheet of key contract terms would also qualify as a basic contract document management system with associated metadata.

Types of contract metadata

Storing contract documents for precise and exact retrieval requires the most basic contract metadata: name or type of contract, party names and the date of the contract. These are the unique identifiers of the contract under a custom that goes back long before modern information technology. (Note that a standard document management system profile will instead focus on the electronic history of the particular electronic file: author, date created, edit history, access history.)

Depending on the type of contract, it might be easy to define additional “fill-in-the-blank” metadata: price, volume, discounts, delivery dates, payment dates, termination date, renewal date. These translate directly into compliance or alerts systems (or into an ERP system), and the advantage over manual processes is obvious.

Beyond fill-in-the-blank metadata, metadata tagging can support precise and exact retrieval of contract documents for further analysis where wording (eg, of change of control clauses) can vary, and text-based searching is not reliable. But other key contract metadata may not correspond to wording in the contract document at all — for example, counterparty credit risk, corporate group affiliation of the counterparty, or how the contract is categorized under various regulatory or accounting classification schemes. Coding of this more complex metadata can require analysis and judgment. Addressing some of the risk management and strategic issues (eg, extended interdependencies, geographic or political risk) to identify high profitability or high risk contracting may mean going beyond contract document wording to develop a more comprehensive but strategically defined profile of the contract, including contract outcomes.

Contracts vary significantly as to what I call their “data discreteness” — how much of their content can easily be captured in structured datapoints. A “click to accept” software license agreement is highly “data discrete”. The contract terms, like the background governing law, have become a standardized frame for the particular transaction, and the contract document has been reduced to an electronic record of counterparty agreement. Highly data discrete standard contracts can be managed in volume, including through strategies such as clause level management (contract documents are treated and managed as assemblies of clauses) or “management by exception” (contracts are standard unless otherwise indicated).

What contract metadata to capture and how: opportunities, challenges and tradeoffs

Deciding what contract metadata is important for your organization is not a technology issue, it is a business and strategy issue. Contract metadata can support the skills and knowledge base of contracting professionals, but it can also provide value to financial, legal and compliance, and risk management functions, as well as to the business units and senior management.

You don’t need to limit your thinking to data derived from contract documents or from the contracting process. In particular, if you have, or are planning, a CLM project, but even if you are not, and regardless of your technology platform, there is a potential opportunity to create and offer value with strategic contract metadata. Some of this metadata might (also) be the subject of risk management, so-called “business intelligence” or “client relationship management” initiatives, but it is still at the core of contracting competency.

You might start out with an ideal, comprehensive set of metadata that you think would be useful to capture. The following considerations may help you both scale back and reorient this vision.

 If you don’t have metadata for all of the contracts of the relevant type, the program will produce incomplete (junk) data and unreliable search results. So the program should be mandatory. But there are limits on what you can expect of people before you encounter resistance and its by-product, inaccurate (junk) data. The implication: you can’t go overboard on manual coding or tagging requirements.
 The dreaded legacy problem (how to get existing contracts coded and into the system): Manual coding of existing agreements can take months, cost thousands of dollars and raise questions of quality control. Automated coding strategies are worth considering, even if they produce only partial coding. Depending on the duration of your contracts, you may decide to skip the coding of existing agreements and simply roll into the metadata program with new contracts over time.
 How will the coding or tagging get done on an ongoing basis? In some systems, metadata can be drawn from the automated contract creation process. This works where there is no possible corruption of the datapoints from the automated contract creation process through to contract execution (like in your Amazon book order), and where your own contract documents are used. Document-based tagging, where codes or tags are associated with particular clauses, can work where metadata corresponds to contract document text. But any manual coding or tagging (whether in contract creation or coding after-the-fact) will need to be done by knowledgeable, accountable persons who are motivated to maintain data quality.
 Because contract types are so different, there is a natural limit on how far you can extend a detailed metadata program within the organization. Still, a set of high profitability or high risk parameters (eg, specific contract terms) for a particular group of contracts could be valuable, even if it is not applicable to other types of contracts.
 Developing “enterprise” level strategic contract information, such as aggregated counterparty relationships, geographic or other global risk mapping, flow-through of warranties and indemnities, or matching buy-side with corresponding sell-side contracts, can support scenario planning and other strategic knowledge initiatives. Building out this type of contract information would require enterprise classification schemes and information modeling that will almost surely transcend particular contracting processes. You may have to reconcile competing views about what is relevant and how to define it. Alternatively, perhaps there is something to be said for allowing competing views to co-exist and be considered in parallel; this could create a sort of information system redundancy for validation. (For example, accounting standards, though the most definitive system of record, can hardly be said to be the last word on corporate prospects and risks.)
 Contract metadata schemes will not remain static. Business evolves, laws change. Beyond the fill-in-the-blank metadata, you can’t know for sure what will appear to be relevant in hindsight. But strategic metadata categories by definition may be relatively short term, and there will always be an element of the ad hoc. This is normal and natural in knowledge management, and does not suggest that there was something “wrong” with the original design.
 As in all cases where structured data is being used to simplify and abstract (think about your bank’s customer profile of you), relevant information may be lost. Structured data works by reducing information. In the case of contract, we need to maintain a healthy respect for the actual wording of contract documents as well as for the totality of the contract relationship. Depending on contract type, there are almost certainly limits on how far you can go — or want to go — in “transactionalizing” a contract relationship by reducing your knowledge of it to metadata. (We have all been on the receiving end of this approach in our relationships with our banks and other providers of consumer services.) Indeed, recent research suggests more potential in opening up what I call the “knowledge bandwidth” between you and your contract partners.

In conclusion

Process- and document-defined approaches to contract metadata are unnecessarily limited; instead, targeted capture of contract metadata toward strategic knowledge presents upside potential for organizations and contracting professionals.

Capturing contract metadata is a matter of tradeoffs, and your expectations should not run ahead of what realistically can be achieved. But even partial, temporary and imperfect capture of metadata may be valuable if it is strategically selected and executed, not set in stone, and properly understood as potentially information-reducing.

If you have thoughts or experiences on this subject to share (on a confidential basis), I would like to hear from you, at C.Paris@lse.ac.uk.

Carolyn Paris, Information Systems and Innovation Group, Department of Management, London School of Economics, Email: C.Paris@lse.ac.uk

About the author

Carolyn (Carrie) Paris, a former corporate finance partner at law firm Davis Polk in New York City, has worked in legal knowledge and risk management. She is currently in the Information Systems and Innovation Group, Department of Management, London School of Economics, where she is researching IT support of contract.
 
 


 

Envisioning visual contracting: why non-textual tools will improve your contracting

 
In this article, grids, system illustrations and flowcharts will be referred to as “visual content”.   Your internal clients today often consider contracting professionals to be professional obfuscators, delaying delivery of their desired deal-closing until completion of dense prose. And later readers and users of your work may struggle to understand the original intent, context and impact of contracts that you drafted and refined in prior years.   Is there a better way? Yes.   Is the contracting tradition an inviolate process, in which ancient, mysterious laws preclude new methods or tools? No.   This article analyzes why and how graphic, non-textual tools and content can speed up, upgrade and simplify both your work processes and your work product — and maybe even generate more appreciation of your contribution. HENRY W (HANK) JONES III, Law Office of Henry W Jones III & Intersect Technology Consulting
 
 
by HENRY W (HANK) JONES III, Law Office of Henry W Jones III & Intersect Technology Consulting

Key points

• Some companies include grids, system illustrations, flowcharts and other non-textual content in their contracts.
• Global trends make adding graphics to your career toolkit and contract work product a smart move.
• Social science research, management theory, legal research1 and other wisdom support supplementing prose with illustrations in contracts.
• Experimenting with visual (non-textual) contract content and tools is a great way to develop your and your internal customers’ comfort, familiarity and fluency with using graphics in contracts.
• Helpful books, websites and software are available to help you assess and deploy this recommended diversification of your skills.

In this article, grids, system illustrations and flowcharts will be referred to as “visual content”.

Your internal clients today often consider contracting professionals to be professional obfuscators, delaying delivery of their desired deal-closing until completion of dense prose. And later readers and users of your work may struggle to understand the original intent, context and impact of contracts that you drafted and refined in prior years.

Is there a better way? Yes.

Is the contracting tradition an inviolate process, in which ancient, mysterious laws preclude new methods or tools? No.

This article analyzes why and how graphic, non-textual tools and content can speed up, upgrade and simplify both your work processes and your work product — and maybe even generate more appreciation of your contribution.


 

 

 

 


Habitual insistence on text-only contracts is short-sighted.

Contracting traditionally is textual. However, multiple trends in the last decade make textual dependency and exclusivity less effective.

· In a hyper-competitive economy, any tool that can save time and stress, or that can remove ambiguities and resulting opportunities for commercial disputes, can increase credibility and career opportunities.
· In an era of globalized companies, fewer colleagues share the same first language. Your instruction or assumption that internal customers should “Just read it” may be inconsiderate, ineffective or even career limiting when “it” is a complex or long document in your own language. Consider whether your work environment includes non-native language colleagues.
· In an era of more transnational trade, relying solely on a single mode of communication for effective operational communications or contracting may be unnecessarily self-limiting and may increase risks.
· There are no longer any technical or financial barriers to both you and your colleagues creating or exchanging graphic communication. Cheaper, more standardized and readily accessible computing tools with robust graphic creation and display capabilities are now universally available to non-experts with easy-to-use graphics software. Younger workers, in particular, are accustomed to attractive graphic information. A generation of video game-playing workers, laptop-based students and now PDA-dependent individuals are contract process participants who are not, and will never be, as paper-oriented as older folk.

Broader contract management and knowledge management goals are supported by
visual content.

Do your departmental big-picture priorities, long-term strategy and directives include adding value to procurement? Does your boss expect you to “partner with” and enable other business units in your company? Does your career progress require your evidencing that you made a difference in long-term clarity, utility and enforceability of your employer’s contracts? If so, adding appropriate non-textual tools and components to your agreements can be a good fit with your environment.

Benefits result from supplementing contracts with visual content.

By innovating in the definition and creation of contracting processes and content, you can contribute measurable benefits to your company. Potential benefits include reduced overall time to conclude a contract (at least for one which is large or covers a new subject area), fewer cycles of team efforts to define the deal, and higher evaluations of you by your internal customers (assuming your work performance assessment includes an opportunity for your innovative efforts to be noted).

Successful companies deploy non-textual components in their commercial communications.

There’s no basis to assume that non-textual communication isn’t serious communication. Supplementing text with graphics is already common in a wide variety of contexts.

You can find precedent for such process innovation in US Securities and Exchange Commission filings (eg, “FAQ” information disclosures to employees in new merger situations); intellectual property quality control (eg, open source software project quality control and license compliance); product sales/marketing literature; customer support tools/documentation; tax liability/assessment analyses; figures (ie, illustrations) in academic research literature and patent applications; software asset management (ie, license compliance and inadvertent piracy avoidance); guidance in trade association newsletters; hospital medical procedure explanations to new patients; architectural/network layout of vendors’ product/services; journalism; internet humor; standard of care (ie, best practice) diagnostic and treatment guidelines for cancer care; and other communications.

You already use some visual communication in your contracting, such as section headings, indented margins and other document traditions which are proven cognitive guideposts.2

Risks from visual contracting are too small to defer experimenting now.

Contracting professionals surely have risk management responsibilities. But the worry of perhaps creating new ambiguity or some other problem by innovating in contract document content can be mitigated. For example, as an internal quality check, you can test the accuracy of contract flowcharts and illustrations by asking individuals who weren’t working on the original deal team to interpret their meaning and impact. Also, your “order of precedence” provision can relegate charts and graphics to the lowest-relevance category.

Take these practical action steps to begin visual contracting.

You can take small, easy steps to begin broadening your contracting vision and reality.

For example:

Gather: Create a file or collection of samples (ie, third-party uses of visual components in their contracts). Designate a person or place in your department as the “custodian” or “warehouse” for such examples. Periodically supplement it. For example, a graphic can visually summarize an expected final, complex deliverable from a contract for delivery of components and project management services for an advanced energy management system. For examples available to be freely “mined” from non-confidential government filings, see the links in the endnotes.There are further examples in my article “Doing deals with flowcharts” (published in ACC’s The Docket magazine), available on request.4

Question: Find and interview graphic artists, marketing material authors, adult “second language” educators and other professionals with experience and interest in non-textual communication to learn what works for them, for which types of audiences, and why.

Experiment on your own: In your big or new deals, create bird’s-eye view and/or process flowchart illustrations. Circulate these initially among your team, then to the other company as a new tool to accelerate “getting to yes”. These tools can help identify gaps and ambiguities in the deal as initially presented, even if they’re not retained in the final contract. Also, consider using graphics to supplement the text of selected exhibits, especially to assist people and departments responsible for later implementation of the transaction who may receive only that exhibit but not the base agreement.

Experiment further: Harness and leverage your internal customers’ thinking. Ask them to create flowcharts to assess and improve the clarity and completeness of their deal vision, perhaps before you begin to design or draft a new contract.

Experiment: Sketch a one-page bird’s-eye view chart showing all the immediate and indirect players in your next good-sized deal, with anticipated future changes covered, but without drawing links/lines between the parties. Send that preliminary chart to internal customers to compare and refine their view of “who’s contributing to, impacted by and necessary for this deal’s success”. Then, after initial discussion and collegial synchronization, build on that skeleton by adding process vectors (ie, arrows) to communicate causation, finance, delivery, approval or other points), plus footnotes, color-coding and/or other communication supplements.

Advocate internally: Ask yourself, and then ask colleagues: “Can you close your eyes and remember all of your own contracts’ processes and their variable paths/outcomes?” Then consider the question: “Might adding a quick, easy-to-understand reminder or hint about the contemplated, agreed processes, requirements, deliverables or remedies improve the deal summary memo and/or the actual final contract?” Then ask: “Is there any reason that a reminder or hint must be textual rather than graphic?”

Research, on your own: Borrow from your public library and browse the “graphic communication” books by Yale Professor Edward Tufte5 or the vividly expressed management ideas of Tom Peters. Finally, the websites of marketing communications consulting companies showcase engaging graphic business communication and case studies.

Research and refine, in your department: Survey your internal customers regarding whether they find particular visual content that you or others have used to be helpful or useful.

Plan: Include visual contracting in internal training sessions on contracting skills as an agenda item for your next offsite meeting, along with specifications for a future “contract automation” software system.

There’s no point in waiting. May your visualization efforts point you to new effectiveness and success!

Henry W (Hank) Jones III, Law Office of Henry W Jones III and Intersect Technology Consulting, Email: memphishank@aol.com.

Endnotes

1. For example, note the article in the June 2009 issue of Contracting Excellence (Vol 2 issue 5) “Better business through proactive productization and visualization of contracts”, by Katri Rekola and Helena Haapio (www.iaccm.com/contractingexcellence.php?storyid=906) and the research cited in that article. Also, note Doti’s Contract Law Flowcharts and Cases: A Student’s Visual Guide to Understanding Contracts (2007), with its second edition appearing soon (www.westacademic.com/Professors/ProductDetails.aspx?productid=141905&tab=1), and Essential EC Law in Charts (www.beg.ch/ec-charts/index.html), even though the project and book are not related to contracts only. Also, see the events listed in the breakout box below.
2. Visual comprehension of a contract is so important that “Layout” is the third of 19 chapters in A Manual of Style for Contract Drafting by Kenneth A Adams (2nd ed, 2000, American Bar Association).
3. For examples, see the contract artifacts in corporate contract filings with the US Securities and Exchange Commission, available at: www.sec.gov/Archives/edgar/data/1372664/000119312507000742/dex101.htm and http://www.sec.gov/Archives/edgar/data/731727/000106299309002024/exhibit99-1.htm .
4. Published in the October 2001 issue of The Docket, the magazine of the (then) American Corporate Counsel Association (now known as the Association of Corporate Counsel) and selected for their “best reading for small legal departments” list. Co-written by this writer and Michael Oswald.
5. The most often recommended resources for effective graphic presentation of various types of information are Envisioning Information (1990) and Visual Explanations: Images and Quantities, Evidence and Narrative (1997) by Professor Tufte.


About the author

Hank Jones is a 30-year contracting lawyer, consultant and trainer who has worked in six global companies, including as head counsel for two global publicly traded companies and as VP of IP Development for another. Based in Austin, Texas, Henry works nationally and globally on sourcing, information technology and other transactions, training and disputes. He welcomes feedback and more visual contracting examples at memphishank@aol.com.

 

 

 

 
 
 

 

 

 

 

 

 

 

 

 

 

Ashif Mawij negotiates poker moves with the stars

Ashif Mawji (CEO of Upside Software) was invited to play among 300 poker players at a tournament where some of the proceeds were donated to charity. Among the group were individuals such as Warren Buffett (super-investor and philanthropist), and a number of athletes (including Vince Carter – NBA player for the Orlando Magic) and the who’s who of the corporate world. Ashif finished 120th out of 300 — and this was his first poker tournament! Ashif was ousted by Vince Carter when Ashif went all in with pocket aces and the flop had a K, 4 and 2 all off suit. According to the odds, he had a 95% chance of winning. But Vince had pocket queens and then got a queen on the river (a 5% chance). Lesson learned: Even if you have the best odds, prepare for the worst. The tournament was held at the Wynn in Las Vegas.



         

 

June wedding highlights Susan Birch’s artistry

Susan Birch of IACCM Resourcing and the cake decorations she made for former IACCM employee Karen Kelley’s wedding. Suzanne’s specialty is forming flowers from sugar paste, copying the bride’s bouquet as her keepsake for life. The flowers are made petal by petal, reconstructed into blooms, tinted and dried, and then formed into a presentation similar to the original fresh bouquet.

 


 

Contracting Excellence

 
Volumes 1 and 2 themed issues - Table of articles ...
 
 
Vol 1 No 1: supply chains
Contracting excellence and supply chains: a missing link?            1
TIM CUMMINS, CEO, IACCM
The secret to risk management is closer to being revealed            3
TIM MINAHAN Procuri Inc, Blogmaster for www.SupplyExcellence.com.
Breaking down barriers between buyers and suppliers      5
CHRIS HAPP Blue Solutions Inc
The global view: how IBM Corporation is responding to the challenges of the networked world           8
M.C. McNEILL, Vice-President of Global Contract Development and Global Alliance, IBM Corporation, in conversation with TIM CUMMINS, CEO, IACCM.
Prevention beats cure — proactive contractual care for successful supply chains     10
HELENA HAAPIO Lexpert Ltd
Technology as an enabler for global contracting   13
GREGORY TENNYSON Oracle
Business continuity planning for contracted manufacturing relationships    15
PAT SCHAFER Intrasphere Technologies
The re-emergence of the group purchasing organisation     18
DAVID B. CLEVENGER Corporate United
The evolving legal response to supply chain management concerns            20
GREGORY M CHABON Womble Carlyle Sandridge & Rice PLLC.
Financial supply chain management — changing dynamics           22
PAUL ROBINSON, HSBC Global Transaction Banking
From the front line — your letters and questions 23
 
 
Vol 1 No 2: collaboration
Collaboration: business reality or marketing hype?            1
TIM CUMMINS, CEO IACCM
Context for collaboration................. 3
Mark David, Principal, Commitmentor
Getting serious about collaboration. 5
JONATHAN HUGHES, Director and Head of Sourcing and Supplier Management Practice and JEFF WEISS, Director and Head of Alliance Management, Vantage Partners
Structuring a collaborative relationship    9
BILL HUBER, Procurement Practice Leader, TPI
Zero disputes? Collaboration lessons that businesses can learn from the construction industry         11
James P Groton, Sutherland, Asbill & Brennan LLP (retired)
Service design as a basis for successful commercial contracting   13
KATRI REKOLA, Managing director, Rekola Design Oy
Achieving success with collaborative negotiation is about more than just negotiation            15
MARK DARBY, Principal of Alliantist and author of Alliance Brand, Fulfilling the Promise of Partnering
Social networking — leverage the power of the masses for your next innovation       18
ASHIF MAWJI, President and CEO, Upside Software
Will you help me move your job overseas?           20
Craig Guarente, Vice President, Oracle
Collaboration is key to success of category management at Chevron          22
GRAEME MCKELLAR, Chevron with Oindrilla Chatterjee, Ashraful Khair, Luis Rivas and Omar Idundun.
From the front line........................ 25
Your letters and questions
Regulatory update........................ 27
GREG BROWNLEE, Managing Director, Blake Newport PAUL CARTER-HEMLIN, Director, Blake Newport
 
 
Vol 1 No 3: measurement
The value proposition behind commitment management and improved corporate contracting 1
TIM CUMMINS, CEO, IACCM
Capability Maturity Model — a vehicle to understand and drive commercial excellence       3
MARK DAVID, Principal, Commitmentor; KATHERINE KAWAMOTO, Vice President of Research and Advisory Services, IACCM; and TIM MCCARTHY, Director of Global Contracts and Pricing, Rockwell Automation
KPIs to align the contract management process with your sales process 6
JASON LEMKIN, CEO, Echosign
Six steps to a successful automated KPI program           8
ASHIF MAWJI, President and CEO, Upside Software
Converting the construction industry’s ‘disputes potential index’ into a ‘success potential index’ for any kind of business relationship................................. 10
JAMES P GROTON, Sutherland, Asbill & Brennan Llp (Retired)
Creating better service level metrics 12
IAN S HAYES, Clarity Consulting Inc
How SLAs drive, and don’t drive, performance: strategic, technical and process limitations 16
PATTERSON SHAFER, Intrasphere Technologies
Measures that inspire innovation... 20
BOB TRENT, Director, Supply Chain Management Program, and George N Beckwith Professor, LeHigh University
Output-based contracts — whose responsibility is it        22
MICHAEL PORTER, Associate Director, Blake Newport
From the front line........................ 24
Your letters and questions
 
 
Vol 1 No 4: government and public sector
Public Sector Contracting: Innovation or Bureaucracy?     1
TIM CUMMINS CEO IACCM
Government procurement contracts: Some principles of deterrence in public extortion situations       3
BRUCE HOROWITZ Paz Horowitz, Abogados
Outside contracting column............ 7
Extreme contracting — Christian Cullinane trekking across Alaska
Assessing risk on third-party relationships           8
CAROLYN LINDSEY, Trace International Inc
Who is to blame when government contracts go astray?    10
RICHARD CRUME
Step up to the mark — why procurement leaders need to embrace contract management   12
PETER SMITH Procurement Excellence, UK
Private sector can learn from government — really!            15
ASHIF MAWJI Upside Software
A holistic approach to deal with complex public procurement issues: a call to action          17
JAVIER CARRASCO, NATO C3 Agency
U.S. Communities — overview of a government purchasing alliance            20
STEVE SWENDIMAN National Association of Counties Financial Services Corporation and U.S. Communities Government Purchasing Program
IACCM government contracting expert panel profile their valued resources 21
JOSEPH J MCGRENRA, CFCMTO NY MACKEY, HP
From the front line........................ 25
 
Vol 1 No 5: risk management
Losing touch with the market.......... 1
TIM CUMMINS, IACCM
Risk and compliance: contention or competitive advantage           4
MARK DAVID CommitMentor, with collaboration from ROSS MCKEAN and DAVID HALLIDAY Baker & McKenzie LLP
Cooperative risk management: creating opportunities out of uncertainties 7
robert A ENDRES Synaptic Decisions
Taking charge of supplier risk........ 10
MARK SEVERNS Emptoris
Top Contractual Risks in 2009...... 12
BRIAN FRANK Ariba
Leveraging automation to enhance your risk management 13
ASHIF MAWJI Upside Software
How can we analyze contractual risk?    15
TOBIAS MAHLER Norwegian Research Center for Computers and Law, The Faculty of Law, University of Oslo, Norway
Reducing risk in complex IT projects requires careful  contract drafting      17
BOB SCHMITT Technology Contracts
Outside contracting column.......... 19
From the front line........................ 19
 
 
Vol 1 No 6: organization management
The key to organizational success. 1
TIM CUMMINS, IACCM
Resourcing — the alternatives and why you should care   4
MARK DAVID CommitMentor
What is core to your contracting function?           8
PAUL SEGALINI Cisco
Contracting excellence with technology   11
MICKEY NORTH RIZZA, AMR Research
Crossing the contractual chasm: using contract management automation to improve organizational relationships    14
KEN MIKLOS Ariba Inc
Outside contracting column.......... 16
The evolution of procurement: How CPOs can drive real competitive advantage, à la Darwin 17
PIERRE MITCHELL The Hackett Group
Training and development for competitive advantage — best-in-class practices       20
SUSAN NWANORO and KATHERINE KAWAMOTO, IACCM
From the front line........................ 22
 
 
Vol 2 No 1: customer/vendor experience
What is “the customer/vendor experience”?          1
Tim Cummins, IACCM
The challenge of contract management in a supply-constrained environment         3
PROFESSOR ROBERT HANDFIELD North Carolina State University
Improving the partner experience through policy, process and automation 6
CRAIG GUARENTE Oracle
Get the most out of your relationships during tough trading conditions      9
MARK DARBY, ALLIANTIST
Enterprise applications 2.0: back to basics         12
TIM MINAHAN Ariba
Contracting: ease of doing business 14
SANDRA LEWY and PATTABHIRAMAN PARAVASTHU, IACCM
Integrating service level agreements and balanced score cards within your relationship management           16
ASHIF MAWJI Upside Software
Western influence on Eastern contracting styles  18
DOUG HUDGEON Macquarie Bank
From the front line........................ 20
Your letters and questions
 
 
Vol 2 No 2: financial considerations
In tough economic times, contracting excellence offers relief        1
TIM CUMMINS, IACCM
Moments of Risk........................... 4
Jacqui Crawford, Rolls Royce
Managing the financial cost of exception to contracting standards            5
ASSOCIATE PROFESSOR RENE FRANZ HENSCHEL University of Aarhus
From industrial service providers to performance partners — no more services for free        8
Katri Rekola Rekola Design Oy
Evaluating public procurement: a platform for discussion — RAND Europe            13
Karen Northey BT Global Services
Some perspectives on revenue recognition from IACCM members 15
Mark David, Nigel Cairns and Craig Guarente
Driving better fiscal management and revenue recognition with enterprise contract management technologies         17
Kevin Potts EMPTORIS
Wise working capital management: cash may be king. Just don’t kill your subjects            19
DREW HOFLER and TIM MINAHAN Ariba
Outside contracting column.......... 20
 
 
Vol 2 No 3: leadership & strategy
In turbulent times, survival is not enough 1
TIM CUMMINS, IACCM
How secure is your job?................. 2
TIM CUMMINS, IACCM
The role of a contract manager........ 4
 
Quality of leadership — leaders, providers and academics share their views on how our contracting community is faring in the areas of leadership and strategy
Practitioners’ responses................. 6
Providers’ responses.................... 12
Academics’ responses................. 14
Law matters — but which system is best?          18
Outside contracting column.......... 19
From the front line........................ 20
Your letters and questions
 
 
Vol 2 No 4: developing people and skills
In a knowledge-based world, imagination is the final boundary        1
TIM CUMMINS IACCM
Mentoring: an untapped asset for security in a down economy      3
TIM MINAHAN Ariba and MIKE MARSHALL BAE Systems
A day in the life: the transformational effects of Web 2.0    6
VAUGHN HOVEY Ohio State University, with an introduction by TIM CUMMINS IACCM
 
Developing people skills — contemporary challenges
Applying negotiation best practice and advances in personal productivity technology           8
MARK DAVID CommitMentor
Addressing contemporary challenges — collaboration      10
MARK DARBY Alliantist
The role of universities and business schools in developing leadership        13
RENÉ FRANZ HENSCHEL University of Aarhus, DAVID LOWE Manchester Business School, and ROBERT B. HANDFIELD North Carolina State University
Organizational capabilities versus functional skills — The battle between groups for ascendancy     15
THOMAS D. BARTON PhD California Western School of Law and THOMAS M. LARKIN Credit Suisse, Supply Management
Specificity in skills and expectations 18
LAMAR CHESNEY Suntrust Banks Inc.
Developing commercial and contract management skills and competencies in an MBA for commercial executives — survey findings....................................... 19
David Lowe University of Manchester
From the front line........................ 22
Want better results? Motivate, don’t mandate — experiences of Hess Corporation 23
TIM MINAHAN Ariba
Are skills and knowledge on hold?. 24
MARK DAVID CommitMentor, with collaboration from RENE FRANZ HENSCHEL and ROBERT B. HANDFIELD
Outside contracting column.......... 27
 
 
Vol 2 No 5: managing solution requirements
Keeping pace with a changing world: Challenges for contract management and negotiation 1
TIM CUMMINS, IACCM
From “servitization” to the service oriented enterprise, a call for business innovation 4
DOUG MORSE Services Transformation and Innovation Group LLC
Managing supplier integration in new product development            7
ROBERT B. HANDFIELD North Carolina State University, and TIM MINAHAN Ariba Corporation
Contractual challenges in moving from products to services and solutions             12
PROFESSOR SOILI NYSTÉN-HAARALA University of Joensuu, Finland
Why integrating your buy-side and sell-side agreements in one contract management system is advantageous       14
ASHIF MAWJI Upside Software Inc, and ROB ROWE OptumHealth, a division of UnitedHealth Group
Better business through proactive productization and visualization of contracts       17
KATRI REKOLA, Rekola Design and HELENA HAAPIO, Lexpert Ltd
Managing risk in SaaS, Cloud Computing and other on demand and web 2.0 IT contracts    20
ERIC ESPERNE James River Consulting LLC
Outside contracting column.......... 24
Connective forces — getting back to the bargain 26
JACQUI CRAWFORD SwissPort
From the front line........................ 27
Your letters and questions
 
 
Vol 2 No 6: knowledge management
Is knowledge management holding us back?       1
TIM CUMMINS, IACCM
IACCM Survey: insights into how organizations manage their knowledge    3
KATHERINE KAWAMOTO, SANDRA LEWY and RAM PARAVASTHU, IACCM
Contracts and knowledge management principles 7
BRIAN HENRY and SUSAN MOSTERT Caridon Business Solutions (Pty) Ltd
Knowledge transfer: extending the value of outsourced relationships         11
KRIS COLBY Ariba
Using social networking technologies for knowledge management 13
MICHAEL D GREENER Oracle
Accenture’s KM Information Channel 15
MARGARET SMITH Accenture
Conversational engagement versus static accessibility: sharing knowledge in the 21st century         17
JON HANSEN Procurement Insights
Building a business case for a contract management solution: strategies for securing executive sponsorship             19
ALLEN POGORZELSKI Selectica, NEVILLE LETZERICH and LESLIE WELLER, EMC
How knowledge management could help to avoid crises, such as the global financial crisis            22
PATRICK CALLIONI Enterprise Intelligence Pty Ltd
Getting the most out of contract metadata           25
CAROLYN PARIS London School of Economics
Envisioning visual contracting: why non-textual tools will improve your contracting             27
HENRY W (HANK) JONES III, Law Office of Henry W. Jones, III and Intersect Technology Consulting
Outside contracting...................... 32
Ashif’s and Susan’s items
Contacting Excellence Volumes 1 and 2 themed issues – Table of articles           33
 
 

 


 

 
 
 

Editor
Kerrie Tarrant
ktarrant@iaccm.com

Consulting editor

Tim Cummins, CEO, IACCM

Vice President of Research and
Advisory Services, and Advertising
Sales enquiries

Katherine Kawamoto

Editorial Panel
Mark David, CommitMentor, UK.
Craig Guarente, Oracle, US
Helena Haapio, Lexpert Ltd, Finland
Doug Hudgeon, Macquarie Bank Ltd, Australia
William Knittle, BP, UK
Lamar Chesney, SunTrust Bank Inc, US
Sterling A. Spainhour, Charlotte School of Law, US
Christoff Hoefner, Nokia Siemens Netwroks, Germany

Automation and technology panel

Mark Darby, Alliantist, UK
Ashif Mawji, Upside Software Inc, Canada
Tim Minahan, Ariba, US
Kevin Potts, Emptoris, US

Guest Editorial Panel
Patrick Callioni, Enterprise Inteligence Ply Ltd

Address: International Association for Contract & Commercial Management (IACCM)
90 Grove Street, Ridgefield, CT 06877 USA.
Ph: (1) 203 431 8741, www.iaccm.com
Editor: ktarrant@iaccm.com
Sales enquiries: kkawamato@iaccm.com

Production
Print
:  Julianne Billington, LJ design, Australia
               www.billingtonphotography.com.au

_____________________________________________________

This issue may be cited as (2009) 2(6) Contracting Excellence.
ISSN: 1937-9765; ISSN: 1937-9757

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