Occidental Petroleum Corporation
Author: Tim Cummins
Contracts - and especially contract management - continue in many organizations to be seen as largely administrative. For those who perform tasks in this area, that is never good news. Not only does it lack influence and status, it is also often seen as dispensable.
As anyone who reads this blog on a regular basis will know, I strongly disagree with the view that contracting is an administrative activity. Yes, of course it has elements of the role that are administrative in nature, but that completely ignores the broader impacts of this discipline on an organization's financial performance and reputation.
I was excited yesterday to participate in a webinar that was led by Jessica John, from Kaiser Permanente Northwest. Jessica was telling the story of KPNW's recent implementation of contract management software (the recording of the webinar is available in the IACCM library. Two things especially struck me.
1. To generate understanding and gain senior management support for automation, Jessica had executives come to structured sessions with her team. The purpose of these sessions was to show the many interdependencies between the contracting process and broader business operations. They helped the executives understand how this 'administrative' activity was impeding business speed, agility and competitiveness. In other words, rather than trying to hide or deny the function's 'dirty linen', Jessica used it to press case for improvement.
2. To make their software implementation effective, Jessica worked with Ecteon, her selected provider, to ensure integration with other systems. Not only did this streamline operational performance, it also led to cross-functional appreciation for the many tentacles of a holistic contracting process and generated a welth of new business data.
Through these two measures, the business gained a fresh perspective and has come to appreciate the critical role of a coherent and high performing contracting process. Today, it sits firmly within the core functions that determine and implement strategy. For Jessica and her team, the benefits of that to the function and to the business more generally are already significant – but as she outlined, they have really only just begun their journey.
The key point here is that automation can be used to open doors and advance business contribution. Far from being a threat, it is an opportunity – and congratulations, Jessica. for grasping it!