Lack of visibility, time-consuming manual processes – it’s an all too familiar story in procurement contract management. One university shares their journey from contract chaos, to CMS utopia.
There are few procurement professionals in the world who haven’t dealt with paper contracts at some point. And very few, if any, who would look at this experience with any sort of fondness.
For the longest time, contract management has been a labour intensive process, with myriad issues caused by the use of paper contracts.
Every business suffers from the same issues, but not every business takes the steps to make a real change. We can all learn a thing or two from North Carolina A&T State University.
Drowning in Paper
North Carolina A&T starts as an all too familiar story, as you might imagine. NC A&T is one of the USA’s top historically black colleges and universities. It employs over 2,500 people, and educates over 11,000 students at any one time.
With an award-winning faculty, and programmes that focus on community engagement, it’s very much in demand.
However, it suffered from the same issues as many of its competitors. A manual contract management system (CMS), with little or no visibility on contracts, and an average of over 15 days to execute a contract.
At Next Level 2016, Nikki Williams, Director of Procurement Services at North Carolina A&T, talked candidly, and all too familiarly, about her experience of the process.
This included the process of scanning all the pages of a contract, walking (quite literally) to the third floor for signatures, and, of course, the inability to find a contract when it was needed.
On top of this, 99 per cent of the contracts were fully executed by a third party. Although the university would sign the contract, they would never get a signed agreement back from a supplier, and therefore never have a fully executed contract.
Contracts would rarely come back from the third party, and when they did, there was no repository to store, and find, existing contracts.
Chaos to CMS Utopia
Sharing their journey from contract chaos, to contract management utopia, Nikki explains their key goals were to:
- Optimise the CMS process by:
- Eliminating paper contracts – this was an enterprise business goal for the entire university
- Reduce contract execution time from 15+ days to 5 days
- Reach 100 per cent fully executed contracts, with signatures from both parties
- Deliver insights into the CMS process with:
- A mechanism which tracked each contract throughout its life
- Creation of a centralised repository for all contracts
Nikki shared the before and after implementation workflow diagrams – and the differences were startling. Rather than a heady mix of workflow rectangles, decision points and dotted lines, today’s contract workflow is a blissfully simple diagram. There are 4 task boxes, one approve or reject decision point, and only forward motion.
Full Steam Ahead
Using these forms, the procurement team can see that the request template is all ticked green. The form ties all the required, and specific, approvers to the workflow. Best of all, it’s fully automated.
The request form confirms that the supplier is not a student nor an employee (who they are not permitted to contract with), then channels it through the various approvers. All requests are also tracked through TCM (Total Contract Manager) by form number.
Once the request form is turned into a contract, a contract number is created, and tied to the forms so that every stage can be linked together. Once the vendor has signed the contract, it returns to TCM, which acts as the central repository. The system even completes basic information such as vendor names, department names, and approvers automatically.
The university now has a fully complete request workflow. The purpose of contract, department, and other information is contained within the request document. The contract goes to the appropriate person to approve or reject, and on that basis, procurement creates a contract. DocuSign is used to get both parties to sign off on the completed contract.
Challenge of Change Management
Asked about the roll-out of the process, Nikki acknowledges it has been a long one. “We’re not just changing the workflow process, but we’re changing the contract policy at a Trustee level. Changing contract policy is driving the roll out, then we can rock & roll!”
Lisa Malone, General Manager Procurious, was reporting from SciQuest Next Level 2016 last month, bringing you all the best bits.