Contracts Admin is a title that does a sheer injustice to the inherent functionality of this application suite area of the business applications platform!
Within the main Contracts application suite your users will be able to completely manage suppliers, conduct supplier due diligence, measure suppliers compliance and manage the contracts that underwrite your business relationships with suppliers.
From an administrators perspective your focus will be on a series of dictionaries and a basic set of settings that support automation of the supplier and contracts management process. This is exposed in 3 administrative areas. These are described below.
Cost CentresAllows you to define the cost centres and budget codes under which you manage your contracts
CategoriesDefine your own contract categories and for each category the auto numbering sequence digits that should be used
Status of ContractContracts exist in a wide variety of current statuses, from initial negotiation, to detailing, to review, redlining, commercial review, legal review, pending sign-off to in force and even expired. Manage your own set of statuses here
Type of ContractDefine your own types of contracts, for example Utilities, Product Supply, Services Supply, Leasing, Rental etc
Renewal OptionsWhat are the various types of contract renewal options that are available to your business? You may have annual, annual with review, fixed term 1 year, rolling quarterly and so on
Service Level AgreementThis is where you can set up your own Service Level priorities. With each priority by name that you create you can set its index of importance (from 1 to 10) and for each service level a Response Time and expected Fix Time from any point that issues or problems are raised. You may also set the default SLA for all contracts. Used effectively these SLA’s will assist you in managing the potential impact of liquidated damages or other penalities which you may incur through being in a ‘breach of contract’ in some form.
Contract Sourcing ProcessFor each type of contract that your business manages you probably have a fixed schedule of stages involved in the process to establish that contractual relationship. For each type of Contract your business will use you may create your own sourcing processes. This assists your users in understanding what needs to be done next and where a contract is within its ‘process’ at any time. For each Process by name you may define as many sourcing process steps as you need to cover all typical flows and activity stages. Your processes may be very different when negotiating the supply of utilities to your business versus the contract activities necessary to source another professional services supplier to your partner ecosystem.
Compliance Matrix Questions
When dealing with the compliance of a supplier and the contract to your business you may want to define a holistic suite of questions in multiple sections to assess their compliance with your needs. Use this compliance matrix questions dictionary to define your own compliance questionaires and add as many sections and questions as you need to satisfy your needs.
Each section of the Questionaire has its own name and background colouring.When adding questions you may set the question as a free text option or as a date-picker option and whether or not the question/answer is a mandatory one
The questionaire is designed to support your employees by prompting them to ask the new potential supplier all relevant questions across all relevant sections. When capturing the responses to the questionaire your employees score each answer for each sections ‘importance level’ to the contract and for each question what compliance risk the provided answer exhibits and any mitigating actions and ownership.
Data OwnershipUse as a dictionary to hold entries that define who owns the underlying data in any contract that creates any form of intellectual property in the form of data. Examples could be Contractor, Contractee, 3rd party, 1st party, Mutual etc
Data ClassificationUse as a simple dictionary of data classifications, for example, Public, Classified, Confidential, Commercial in Confidence, Secret, Top Secret
PCI RequirementsSometimes your contracts will require the ability for a party or solution involved in the contract to be able to show that they are PCI Compliant (Payment Card Industry Compliant). Please use this dictionary to define the PCI Compliance levels required and used by your business. Each major credit card company has their own set of compliance levels with Visa, Mastercard and Discover now using the same or very similar compliance levels. Broadly they could be;
* – Level 4 – fewer than 20,000 transaction per annum
* – Level 3 – > 20k < 1 Million transactions per annum
* – Level 2 – > 1M < 6 Million transactions per annum
* – Level 1 – > 6M transactions per annum
Or you may define what ever PCI compliance nomenclature you like
When using the main contract manager application you will generally follow the following order of activities;
- Make sure the intended target company or contact for any new contract is selected as a supplier (see above) in CRM
- Add a new contract, selecting the relevant target of the contract and set effective starting positions for status and contract type. You can also link it directly to your Products, setup the information security overview and any other additional necessary information
- With a contract in place, even if its at a very early stage, for example ‘Initial Set Up’ and the contact saved and numbered you may then proceed to starting Supplier Due Diligence as this requires a supplier AND a contract to be applied against the due diligence phase
- Conduct what ever compliance forms are necessary to support the establishment of the contract and the supplier proper
- Once the contract is in place and has been initiated/is in force then you may proceed to formally adding this new supplier to the Supplier Manager side of Contracts Management. Here you manage each supplier and each associated contract under its own nomenclature
- In day to day use you may use the dashboard to provide you early warning of impending contract renewals or other pending tasks or workflows assigned to you. You can also use the Reports section to provide you with snapshot views of contract expiries, a tracker of all in progress, a due diligence report and a contract signing summary.