what is contracts management?
We define it as a systematic way to handle written agreements with third parties by utilizing standard language, procedures, tracking key terms and proactively addressing issues before they escalate. The closer you manage your contracts the more business value can be extracted from them. We help our customers transform their contracts department from a cost center to a profit center. Large organizations will realize over $1 million in savings per year with an effective and optimized contracts management function.
Contracts management, simply put, enables you to get organized, maintain compliance and save money. It puts you in a position to grow without putting more stress on overhead costs. As a first step, getting organized and having a way to track your contracts and related documents minimizes your risks overall. Developing standardization and teaching your teams to follow certain procedures will add efficiency to your business and ensure compliance. Finally, the close monitoring of your contracts will enable you to extract more value out of them, not just monetary value, but also in terms of avoidable costs, better relationships, innovation and the ability to proactively address any issues before they escalate into high-cost solutions.
the oasis approach
When it comes to contracts process and management, perhaps you are not quite sure how to approach implementing improvements in your organization. That's where we come in. OASIS is our proprietary approach that enables us to successfully help our customers get from A to B over time. It takes into account not only organization, process and standardization but also ensures that the people aspects of making changes are addressed. We understand that without the team members' involvement and buy-in a process will not work effectively.
Contact us and we will help determine where to start and develop a plan for you. In doing so, you will see increased margins, less risk and better agreements with your third parties overall.
Gap-Free Supplier Contracts
Challenge: A multi-national equipment manufacturer and services Company had accumulated numerous suppliers and did not have sufficient contract language to cover rigorous customer requirements, government regulations and its code of conduct leaving them wide open to risk and disputes.
Solution: Our personnel used a methodical and organized strategy as follows: thoroughly reviewed largest and most stringent customer agreements, identified gaps, developed improved supplier templates, established an enhanced vendor management questionnaire, obtained buy-in for new process and implemented change by including key personnel in the development of the new streamlined ways of working. Existing suppliers were brought into compliance through a streamlined contract process.
Result: This project resulted in minimized risk exposure, ability to quickly locate documents and significant margin improvement by avoiding costs associated with slow-turn-around times, fines, disputes and insurance premiums.
Rectifying an Expensive Quality Crisis
Challenge: Company B was experiencing a significant problem adhering to its ISO Quality System requirements. As such, Company B was subject to numerous civil and criminal fines due to its quality issues.
Solution: Our personnel performed an assessment and identified the quality issues and the cause of the fines. It was discovered that deficient and over-burdensome procedures were the cause of the company’s inability to pass ISO Quality system certification. The gaps were identified, the ISO procedures rewritten and contract language was drafted to address the issues. The new process was implemented through collaboration and buy-ing from the internal teams.
Result: As a result, the company was able to pass its ISO certification with no findings or observations and its exposure to multi-million dollar fines was eliminated.
Bringing in New Investors
Challenge: Company C, a growing construction company, was at a turning point and poised for growth. This growth prompted changes in ownership and the bringing in of new investors. The problem was that the company was formed 20 years ago, they had changed names multiple times and they had trouble locating the previous ownership information, bylaws and shareholder agreements.
Solution: Our personnel worked with the existing owners and new owners to gain a full understanding of the intent of the parties and also to provide awareness about what was needed for all the documentation to be valid. After some discussion, everyone was on the same page. Our team drafted all the necessary documents, made amendments to exiting documents and generally produced a clean and enforceable set of corporate documents.
Result: Setting up proper corporate agreements and related documents provides protection to the owners from personally liability. Also all the owners were now clear about the ownership structure. Since the details of their ownership were taken care of, they were now able to focus on the business and move forward full steam ahead with their growth plans. Our team is now working on setting up their contract templates and helping them develop a streamlined process for contract review, negotiation and supplier on-boarding. Doing so will reduce their overall risk exposure, limit their liability, reduce their insurance premiums and allow them to make consistent and smart business decisions as a team.