Contract Management: How Visibility and a Cloud Platform Can Impact Your Business
IT Lifecycle Management 9-Point Series: Blog #3
A customer of mine recently recalled asking one of their carriers for the contracts related to services at a particular location. The carrier asked for a list of the customer’s billing telephone numbers and account numbers associated with that location, from which he would see what he could find. There was a collective groan heard across the room! As my customer explained, “I’m paying your company for services monthly–hundreds of thousands of dollars a month, at that! And when I ask you for the contracts associated with those services, you in turn ask me to provide you with the data to research it? That means you (the carrier/provider) have no means of pulling that data based on basic criteria (in this case, searching by location).”
Remarkable as this may seem, this is fairly standard when it comes to contracts with technology carriers. As a customer, you not only need to provide the information, but you should also expect to wait quite some time before getting your answers–and you’re lucky if those answers are complete or accurate. Many carriers are still working out of multiple disjointed back-end systems that don’t tie in or talk with one another. With the continual consolidation of carriers, this challenge is only going to become more prevalent.
The takeaway: As a smart consumer, you need to arm yourself with those contracts, since the carriers aren’t equipped to manage them on your company’s behalf. As Ralph Z. Levy, Jr., a member of the Healthcare Practice Group at the Dickinson Wright law firm in Nashville, recently highlighted in Law Journal Newsletters (LJN), “Poor contract management not only leaves companies in the dark regarding their true obligations and liabilities, but also means businesses are losing out on the ability to capitalize on opportunities.”
Contract Storage / Tracking
There are costs associated with the time spent researching the status of contracts. Where are you going to store this data? It’s been proven time and again that storing contracts on an IT person’s laptop or shared drive will not work. Why not? First, you can’t tie contracts to the assets themselves. If you want to look up a voice circuit in your Portland office, what’s the most effective way to locate that contract to the specific circuit? Not an easy feat, as there may be numerous contracts with that carrier.
Maybe you re-termed some voice services for that office last year, but the data contracts for that carrier are on another version of a contract. By leveraging this method, you’re relying on people to be very diligent in tracking this data, and I’ve found over time that simply isn’t realistic and doesn’t scale well. Once you find the contracts, you need to make sure you stay in front of managing how to make them work for you. This includes proactively identifying opportunities to renew or renegotiate contracts and seizing the opportunity to terminate where services are no longer needed. If you’re talking multiple contracts for various services across a multitude of offices, this starts to quickly get tricky and inefficient.
Contract Review / Benchmarking
Technology contracts can be daunting. Sure, your team is familiar with industry-standard service level agreement (SLA) language, but what about other more nuanced technology terms and expectations? You need to be able to benchmark contracts across carriers from a competitive standpoint and to do so in an agnostic manner.
Electronic contracts are key. Ideally, you want the ability to execute them electronically and avoid the unnecessary scanning and back-and-forth that adds time and decreases efficiency. You also want contracts to be tied to the order when you execute it electronically, and that should flow through to a document library that you can access at any time during the lifecycle of those associated services. You want to be able to move forward when it’s crunch-time and not be challenged by your physical location. We all know people are on their smart phones nearly all the time now, so why not leverage that ability to keep the quote-to-order process moving?
Aggregated Buying Power
With carrier consolidation, it’s becoming even more difficult to be a big fish in a carrier’s pond. You want to have that leverage in order to negotiate competitive contract terms and to call on escalation points during the inevitable technical hurdles (expedites, outages, etc.) This is also to your advantage when you’re considering portability options and flexibility within your contract terms. There will be office moves and business reasons justifying the need to make contractual adjustments mid-term and you want the ability to make those changes. You want to take advantage of that buying power, while also working with a company that’s carrier- and technology-agnostic. Technology is evolving far too quickly to be tied to any one carrier or technology for your businesses success.
Visibility remains essential throughout the entire contract management process. There are financial implications associated with not knowing your company’s contractual obligations. Don’t put yourself in the dark.
Key Considerations for contract management:
Define your goals and a clear definition of success
Evaluate your existing methods for tracking contracts and gaps in the current process
Define key stakeholders (consider multiple departments — IT, accounting, legal, etc.)
Compare vendors and solutions to your desired outcomes
Consider short-term and long-term implications, with a focus on visibility, ongoing management and scale
To find out how contract management can help your business or to schedule a demo, please fill out the short form below: