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Technology can boost smarter collaboration if you understand the process

Published: 15 Nov 2013 Average Rating: unrated Print
 
This article appeared in Contracting Excellence magazine on 15 Nov 2013 view edition
 

Most of us agree.  We need constructive collaboration in the business community as it relates to the contracting process for business-to-business (B2B) transactions.  But research shows the enterprise collaboration process generally, is not going well.  Why?  What can be done? 

By Peter Thomson, COO of ContractRoom.com

Can we transform from a highly manual and fragmented approach to deal-making?  Can technology and automation improve the overall process?

Research shows that many businesses don't understand what collaboration technology means.  They don't know how to incorporate it into business processes to improve efficiencies and overall employee productivity.  And, it has become apparent that management's idea of collaboration is what they've experienced with the consumer-based social media tools.  But there's much more to enterprise collaboration and its ability to impact a corporation's bottom line.

Enterprise collaboration can be a significant development for the business community and commerce worldwide. But first we must understand what it is and how it differs from social collaboration. The goal is to implement an end-to-end, data-based approach that is fast, seamless and profitable. 

This article expands upon three ways we need to change the way we think:

  1. Companies need to embrace more collaboration with one another (internally and externally).
  2. Organizations must not use a one-sided collaboration process that isolates employees from the business community. Collaborative technology that draws buyers, sellers, customers and vendors into a seamless and fluid community of commerce will combat this isolation effect.
  3. We must focus more on data-driven processes as opposed to the existing manual, paper-laden approach.

Unless organizations embrace these objectives, they will constantly face manual pitfalls that lower productivity, decrease profits, lose sales, and hinder social commerce.  We need a more data-driven, collaborative environment based more on capturing and managing data real-time through parallel processing as opposed to pushing paper around in sequential process.

What happens when you don't collaborate with a data-based approach to contracting?  Companies are forced into the following inefficiencies:

  • Generating many documents to essentially negotiate the same terms throughout the deal making process. This is repetitive and highly inefficient, costing companies millions of dollars each year.
  • Wasting time comparing documents and tracking changes.
    • The change tracking process also leads to multiple errors that can often lead to an entire breakdown in the negotiation.
    • Version control (working off of the most recent document) is crucial to getting deals done faster. Manual processes can bottleneck and slow down the process.
  • Manually reconstructing the history of a deal, going through emails, notes and memory. Risk drastically increases when companies expose their processes to human error.
  • Carrying additional headcount and resources to support highly manual contracting process. By streamlining the business, a company can invest in other resources that will enhance their core practices.
  • Purchasing, integrating, deploying and maintaining multiple applications to address fragmented pieces of the negotiation and contracting process. This inevitably complicates negotiation and collaboration activities even more than before, when dealing with applications that often overlap and fail to compliment one another.

Enterprise collaboration is not the same as social collaboration

Although technology can enable far greater collaborative participation, it can generate problems if it involves too many or too few people and the wrong people.

According to a recent study by Avanade, 77% of responders said their organization was using some form of a social collaboration tool. Of these, 82% said they would like to use these tools more often in the future1. However, many of these companies are simply referring to social networks instead of true enterprise collaboration technology solutions.

Key findings:

  • Social collaboration is rising.
  • Both business and IT professionals have a false sense of what social collaboration really entails.
  • People have a polarized view of social collaboration meaning some business leaders are skeptical about the real value of these tools.
  • More businesses plan to adopt collaboration tools within the next year, meaning there is a large opportunity within this market.2

LET'S GET SMART!

Software solutions and rapidly advancing technology has changed the way people work with each other, their partners and their customers. Now, we have dozens of ways to motivate, collaborate, and negotiate without being in the same place at the same time.  We just have to learn how to implement and use the software properly.

What spawns successful collaboration?

Carol Lukas and Rebecca Andrews of the Fieldstone Alliance describe four real keys to success in collaboration.

  1. Involve the right people. It is surprising how often collaborations slow down or stop all together because too many or too few people were in the process.
    • Only work with as many people as you need to get the job done.
    • As the number of collaborators increases, so does the number of communications, leading to increased difficulty and coordination efforts.
  2. Clarify the purpose. People tend to think that simply being in the same room and discussing the same issues means they are “collaborating.” This is not the case. Varying levels of intensity exist within the collaboration process. 
  1. Let form follow function. Real collaboration begins only when everyone is dedicated to a high intensity interaction and has committed time to the realization of shared goals.
  • Different types of collaboration exist as well. These vary in terms of difficulty, time and impact.
  • The best collaborations are the ones that take the least amount of time but have the greatest impact on the people you serve.
  1. Get it in writing. Contracts and collaboration charters are the best practices for ensuring an overall understanding of roles and responsibilities as well as laying out rules, timelines and milestones. By understanding your own core collaboration processes and applying some of these keys to success, your company is limitless to how much it can improve in terms of collective trade practices3.

Invest in B2B Collaboration

Time savings is the major benefit of B2B collaboration.  In an article published in Midsize Insider, Kevin Permenter describes how many mid-market companies are becoming successful through the use of B2B collaboration technology. B2B collaboration is by far one of the most difficult practices to implement but this investment can be well worth the effort.

A study by the Aberdeen Group showed that firms collaborating with suppliers are resolving issues an average of three days faster than those who do not implement collaboration techniques.4  Time savings alone amount to thousands of dollars for small businesses, hundreds of thousands for the mid-market organizations and millions of dollars for the Fortune 500 enterprises.

Use data-based technology rather than paper processes  

Once we adopt a “data-driven collaboration technology, the entire process becomes significantly more efficient and intelligent. The main challenge is to break the habit of using offline and online systems that support paper processes (email, PDF, phone).  A manual, paper-driven B2B process can lead to time lags, data and text inaccuracies, security breaches, and missed savings, to name a few.

The benefit of a cloud-based software platform is that it captures and flows data and communication seamlessly among multiple parties as opposed to the solutions that focus on speeding the movement of paper:

  • Improved accuracy, productivity, transparency, and efficiency with greater risk mitigation.  As organizations grow, collaboration both inside and outside of an organization becomes more complex and difficult.
  • Better discipline involving the right people.  Using technology creates a layer of disciplined process for users to engage. With technology we can define user roles for those who have the rights and permissions to edit, approve, comment, sign, or simply view content. This layer ensures that collaborators operate within defined parameters and framework.
  • Better time savings.  Collaborators can be restricted to providing input only on certain sections of an agreement, allowing them to focus on only the area in which they are needed.
  • Improved security.  Finally, through the use of defined role assignments and approval processes, technology ensures that collaborators who are not entitled to make contract changes can be prevented from doing so; or their changes could be captured separately and run through the proper approval channels.

Either embrace change or risk competitive disadvantage

Companies today need to seek out methods to embrace changes in collaboration technology; companies that don't will suffer a competitive disadvantage.

It is a data-driven approach to engaging both internal and external parties in a B2B transaction that allows for the seamless movement of communication and data. Implementing and using it properly will increase productivity and profits. Efficient B2B collaboration will help reconnect the business community, and in turn, lead to a more responsible and productive deal-making process.

 

END NOTES

1 Most Businesses Lack Fundamental Understanding of Enterprise Social Collaboration Tech

2 Avanade, Global Survey: Is enterprise social collaboration living up to its promise?, May 2013

3 Carol Lukas and Rebecca Andrews, Four Keys to Collaboration Success

4 Kevin Permenter, Better Together! How the Best Mid-Market Companies Collaborate and Prosper

TO CONTACT THE AUTHOR, please mail your question to Info IACCM or connect using the IACCM Member Search (login required)

ABOUT THE AUTHOR

Peter Thomson is responsible for ContractRoom 's business operations, financial success and administration. In the 1990s, Peter started up and exited two technology companies, the first in software outsourcing and the second in international telecommunications. In 2001, he moved into the financial industry where he worked in private banking, financial planning and M&A. A technologist at heart, in 1987, Peter designed and programmed a legal case management system that is still in use today. Peter earned his BA from Denison University, and MS from Carnegie Mellon University.

ContractRoom is a revolutionary, cloud-based technology that transforms the way businesses collaborate, negotiate, transact, and contract.  ContractRoom is the first-to-market, singular software platform that automates and streamlines the entire contracting process. It allows any contract or agreement to be negotiated, closed, signed, stored, and managed with anyone, anywhere, anytime, and in any language. ContractRoom shortens the time to close a deal, reduces transaction waste, improves accuracy and productivity, mitigates risk, and enhances business control.

 
 
 

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