Enterprise Contract Management: A Practical Guide to Successfully Implementing an ECM Solution »

Today, between 60% and 80% of all business-to-business transactions are governed by a formal agreement, yet inefficient contract management can mean significantly higher costs, customer dissatisfaction, missed savings opportunities, and regulatory violations. These risks have led to a heightened interest in automation of contract management processes, putting the spotlight on contract life cycle management, also known as Enterprise Contract Management (ECM). However, until now, there has been no comprehensive resource available on this topic.

Enterprise Contract Management addresses all the questions surrounding ECM, ECM solutions, and the project, change, and risk management considerations required to ensure successful implementation. This concise text will help your organization manage the challenges of the contract life cycle and the key success factors and pitfalls in a typical ECM solution implementation.

List of Tables     xiii
List of Figures     xv
Foreword     xvii
Preface     xxi
Acknowledgments     xxix
About the Author     xxxi
About IACCM     xxxiii
Web Added Value     xxxv
Basic Concepts, Fundamentals, and Theory
Contracts     3
Overview     3
Evolution of Contracts     4
Definition of a Contract     5
Types of Contracts     6
Fixed-Price Contracts     6
Cost-Reimbursable Contracts     8
Partially Defined Contracts     8
Letter Agreements     9
Summary     9
Enterprise Contract Management     11
Overview     11
Definition of Enterprise Contract Management     12
The Contract Life Cycle     12
Contract Conception and Creation     13
Contract Collaboration     14
Contract Execution     14
Contract Administration     14
Contract Closeout and Analysis     15
Challenges in the Contract Life Cycle     15
Current State of Contract Management     17
Impact of Poor Contract Management     19
Summary     20
Enterprise Contract Management Solutions: An Introduction     23
Overview     23
What Is an ECM Solution?     24
How Does an ECM Solution Address the Challenges in the Contract Life Cycle?     25
Is an ECM Solution Right for My Organization?     27
Which ECM Solution Is Right for My Organization?     30
Content and Document Management Capabilities     30
Contract Authoring and Configuration Capabilities     31
Collaborative Contract Development Capabilities     32
Resource Planning Capabilities     32
Performance and Compliance Management Capabilities     33
Integration and Services Capabilities     33
Other Criteria     34
What Are the Current Trends in the ECM Solution Market?     35
Where Will This ECM Solution Fit in My Organization?     37
What Benefits Can I Expect from This ECM Solution?     39
Summary     41
Enterprise Contract Management: The Vanguard of Sustained Compliance     43
Overview     43
Compliance: Past, Present, and Future     46
Definition of Compliance     46
Evolution of Compliance in Modern Business      47
The Current State of Compliance     48
The Future of Compliance     51
Sustaining Compliance     54
A New Vision of Compliance     54
The "Ripple Effect"     56
Components of Sustained Compliance     58
People     58
Process     59
Technology     60
Role of Technology in Achieving Sustained Compliance     61
The Relationship between Technology and Compliance     61
How Does Technology Address Compliance Requirements?     63
Technology Solutions That Are Being Used to Address Compliance Issues     66
ECM and Compliance Management     71
Procedural Compliance     71
Contractual Compliance     73
Regulatory Compliance     73
ECM Solutions Address Sarbanes-Oxley Requirements     74
ECM Solutions Address Common Requirements of Multiple Regulations     78
Lessons Learned from Initial ECM Solution Implementations     82
Summary     85
Enterprise Contract Management Maturity Model     89
Overview     89
The Problem Statement     90
Maturity Models     91
An Overview of Maturity Models      91
Key Components of Maturity Models     93
ECM Maturity Model     96
Objectives of the ECM Maturity Model     97
Scope of the ECM Maturity Model     99
Description of the ECM Maturity Model     99
Progression to Higher ECM Maturity Levels     106
Shift in Focus and Improvement in Process Capability     111
Summary     113
ECM Maturity Appraisal Method     114
Overview     114
Case Study     130
Step 1. Planning the Appraisal     131
Step 2. Preparing for the Appraisal Effort     132
Step 3. Execute the Appraisal     133
Step 4. Reporting and Analysis     138
How ECM Solutions Assist in Progressing to Higher Maturity Levels     140
Summary     142
Implementation
Implementation Methodologies     147
Overview     147
Six Sigma     148
Origin of Six Sigma     148
The Basics of Six Sigma     151
Key Themes of Six Sigma     153
DMAIC: The Key to Six Sigma Methodology     154
Benefits of Six Sigma     154
Should ECM Implementation Be a Six Sigma Project?     156
Results or Business Benefits Criteria     157
Feasibility Criteria     158
Organizational Impact Criteria     159
The ECM Solution Implementation Road Map Using Six Sigma     160
The DMAIC Process: Key to Six Sigma Methodology     160
D-Define     160
M-Measure     162
A-Analyze     162
I-Improve     164
C-Control     164
Design for Six Sigma Approach     165
I-Identify     167
D-Design     168
O-Optimize     168
V-Validate     169
The ECM Six Sigma Team     171
ECM Project Champion     172
Master Black Belts, Black Belts, Green Belts, and Yellow Belts     173
The Steering Committee or Leadership Council     174
Alternate ECM Solution Implementation Methodologies     175
The IDEAL[superscript SM] Model     176
I-Initiate Phase     176
D-Diagnose Phase     178
E-Establish Phase     179
A-Act Phase     179
L-Learn Phase     180
Generic ECM Solution Implementation Methodology     181
Preproject Preparation Phase     181
Project Planning Phase     182
Analysis and Design Phase     183
Configure, Load, and Test Phase     185
Go-Live and Support Phase     186
Summary     187
Change Management Considerations     189
Overview     189
The Change Champion     191
Organizational Change Management Elements: Key to Success in ECM Solution Implementations     192
Establish a Sense of Urgency     193
Create a Guiding Coalition     194
Develop a Shared Vision     195
Communicate the Vision     195
Empower Employees for Broad-Based Action     197
Generate Short-Term Wins     197
Consolidate Gains and Produce More Change     199
Anchor Change in Corporate Culture     199
Summary     200
Risk Management Considerations     203
Overview     203
Types of Risk     203
Program Risk     204
Project Risk     204
Functional Risk     205
Resource Risk     205
Business Risk     205
Technical Risk     206
Risk Management Process     206
Summary      208
Integrating an Enterprise Contract Management Solution     209
Overview     209
The Business Imperative for an Integrated ECM Solution     211
The Extended Enterprise     211
The Agile Enterprise     213
Globalization     214
Technology Advancements     215
Outsourcing     216
Era of Compliance     217
Building a Business Case for Integrating ECM Solutions     218
Costs     219
Risks     220
Benefits     221
Opportunities     222
Key Financial Metrics     225
ECM Solution Integration Approaches     226
Information-Oriented Integration Approach     226
Business-Process-Oriented Integration Approach     228
Services-Oriented Integration Approach     231
Portal-Oriented Integration Approach     233
Ten Steps to Integrate ECM Solutions     235
Step 1. Understand Business Goals and Objectives     236
Step 2. Align Resources and Organization with Enterprise Integration Strategy     238
Overview     239
Scope     239
Stakeholders     239
Integration Strategies      239
Standards     240
Risks     242
Step 3. Define Scope of Effort and Outline Metrics     242
Key Metrics in Scope     243
Step 4. Establish Clear Lines of Ownership and Accountability     244
Step 5. Develop Functional Specifications     245
Step 6. Develop Technical Specifications     249
Step 7. Configure and Construct     250
Step 8. Test Integration and Perform Cutover Tasks     251
Integration Testing     252
System Testing     252
Regression Testing     253
User Acceptance Testing     253
Performance Testing     254
Load Testing     254
Stress Testing     254
Cutover Tasks     255
Step 9. Deploy Pilot Integration     255
Step 10. Measure Success and Support Continuous Improvement     255
Vision of a Fully Integrated ECM Solution     256
Summary     260
Metrics: The Catalyst to Achieve and Maintain Success     263
Overview     263
Metrics     264
Defining Metrics     264
Choosing Metrics     264
Implementing a Metrics-Based Program      265
Metrics in ECM     266
Adding Value to the Contracting Group     266
Adding Value to Business Functions     267
Adding Value to the Organization as a Whole     268
Summary     269
Sustaining Excellence beyond the Implementation     271
Overview     271
Top Ten Success Factors and Pitfalls in ECM Solution Implementations     272
Sustaining Success beyond Implementation     272
Summary     280
Regulations at a Glance     282
List of Abbreviations     291
Bibliography     293
Index     295