Contract Management Best Practices

Join RPI while we present Contract Management: Best Practices. Learn how the Contract Management module integrates with your procurement S3 modules to improve your contract process.

Transcript

Speaker 1:           Good afternoon everyone. We’re going to go ahead and get started. I want to thank you once again for attending this afternoon’s webinar on Contract Management best practices. We have a great presenter with us here today, Miss Stephanie Kowal, and I will hand off to her in just a minute. First, I have a couple of housekeeping items. One is there is a live video feed with this webinar. You should be able to toggle the camera and the PowerPoint to your liking. Second, you’ll notice if you attended the first two webinars of the day, we welcome questions. Any questions at all you have, please type them into the GoToMeeting module chat or questions box. We’ll ask them during the presentation if they fit in. If not, we’ll save them until the end, and if we run out of time, we will follow up via email.

Lastly, this is the question we get most often, so I’ll answer it up-front. We will be recording this presentation. This presentation will be available to you to view and to share with your colleagues. It will be on YouTube, and it will be on our website. It usually takes us a day or two to get it up there, but we will distribute that link to the email of all attendees. Without further ado, I give you Miss Stephanie Kowal.

Stephanie:          Hello everyone. Very excited to go through this presentation on Contract Management best practices with you. Here’s today’s agenda, what we’ll be going through. It’s a lot of information. More of an overview and some best practices if you’re thinking of implementing this new application.

First off, what is Lawson’s Contract Management? It’s actually a rich client that’s installed on your PC, much like how SmartOffice is. It integrates heavily with S3 Procurement module. All these different areas, inventory control, purchase order, accounts receivable, general ledger, it’s all connected with Contract Management. Also, things like rebates with accounts receivable. There’s also on a separate application, strategic sourcing, that’s used along with supplier portal, which is integrated as well.

It’s designed to improve your contract processes and management. It’s really meant to automate a lot of your bid processes and the renewal of your contracts. It allows you to use electronic approvals instead of having that piece of paper follow you around. It really creates a lot of visibility around the whole contract life cycle and your spend. This can be used amongst multiple different organizations, not just healthcare, for multiple different types of contracts. Not even just item special services.

It provides better integration with 832s. If you’re using those now, there’s way more that you can do with contract management. It also allows you better management of those special items. You can add special items to purchase order agreement. How about that? Very exciting.

Contract Management integrates with Strategic Sourcing. I’m really going to be focusing on contract management today. Just so you know, the two share a lot of information. A lot of the setup that you’ll be doing in Contract Management, if you choose to implement Strategic Sourcing after the fact, you can use the same information. If you’re using Strategic Sourcing now but don’t use Contract Management, again, half your setup’s already there. These are two separate Landmark modules that are installed separately but can work together.

Here’s your challenges. You all know them of managing your contract today. There’s a whole bunch of different processes, different team members trying to organize this information, trying to load items, looking at of your items on contract and seeing which items your requesters are ordering on specials and trying to bring those all together. There’s no visibility there, or very little visibility to bring all this information together. It’s difficult to report on any of your contract performance. You miss a lot of your milestones and deliverables. You don’t know how to track those rebates easily or when to renew those contracts.

There’s also a lot of legal issues, compliance that you need to adhere to. That can be difficult to manage as well. That puts you in contract violations.

Here’s a typical project approach. Really it’s starting off with gathering the requirements of your organization. What are your business needs? What’s your approval structure? Can you utilize your requisition approval structure for your contract approvals? Do you have any audit concerns? Then really, going through and prepare all of your data.

We’re going to get into this at a later slide, but making sure your item master and vendor master are cleansed. Making sure you have a naming convention to follow. What contract types and classifications you have. Thinking ahead. Going through your built. Building your Contract Management structure. Replacing your PO25 agreements because now they’ll be beginning in Contract Management and integrating with S3 PO25.

You also need to think about security and any kind of additional customizations that you need. Since it is a landmark module you would be using Configuration Console to hide or remove, add new fields.

Then of course testing. Making sure you test out all these different contract types. If they follow different approval flows. If they have different requirements. Train and deploy to all your super users. Anyone that’s involved in the contract process. Making sure each point in the process is documented. Again, making sure that you have a good support plan moving forward.

Your design considerations. I said this earlier in RQC best practices, if you were joined in there. Same general setup. Have a workshop with all your stakeholders. Get everyone in the same room and whiteboard all these different contract scenarios. You can choose to implement this with certain teams first. Just using it for your supplies contracts and then maybe layering in your service contracts and your facility contracts and just phase it out.

Look at your current state and your current processes and think about how they could change this new tool. It’s very important to understand how Contract Management is set up. All the different structures since this is a newer application. You’re so used to Lawson setup. This is a lot different. We’d really recommend going to training prior to a lot of these workshops so you’re a little bit more informed of what all the setups are in Contract Management and how it can work for your organization.

There’s also other tools in play. A lot of different organizations may have other contract repositories. Having a better understanding of your organization, will that contract repository still be in play? Is only certain contract types? Are you going to have it interface instead? Make sure you think about all these things ahead of time. Making sure you have a data conversion cutoff. Who’s currently adding agreements in PO25 today and when are you going to be going live at Contract Management, then no one can directly add in PO25 anymore. Now they’re always still in Contract Management. What’s your main source of detail? Where do you go to first?

Again, making sure you have your approval processes in play. Is there only certain contract types that you need those approvals for or is it every type of contract? Can you utilize a hierarchy that was already built or do you need to create a whole new one?

Master data files. The most important part of any kind of integration, building Contract Management out. You need to have integrated structure. What this means is making sure that your vendor file is cleansed. Make sure that a detail that you’re carrying over, that you have in Lawson today, is still going to be accurate in Contract Management.

There’s certain things like tax ID numbers that you can make sure that there’s not duplicates because you do not want duplicate vendors in Contract Management. It will give you a hard stop if you choose to. This really can help you with vendor mergers, help you create the right kind of process and have the right kind of tools to help you manage this process a lot better. Making sure you start off with the cleanest slate possible is only going to help you.

Same thing with your item master file. Any kind of changes that you’re doing to your item master. Any kind of PO13 inactivations, creating new item masters, replacing because of a unit of measure change. All of these processes are going to be greatly impacted with Contract Management because there’s a new way to go about it. There’s new utilities that you can run. Everything is connected. Contract Management is connected with S3 and it goes round and round and round. Any kind of one off where a process is done in S3 sometimes, in Contract Management other times. It gets things really messy, so making sure you have a clean slate and then you have those processes in place to know that the right roles are picking the right actions on the right forms.

There’s also different integrated structures that you can use with relating distributor contracts with manufacturer contracts. You don’t have to connect the two, but it is a option that’s available to you, so making sure you test that out and understand if it works for you.

There’s also parent, child, and preferred contracts in Contract Management. You could basically have one header agreement contract, and then multiple different contracts that are separate but they relate to that parent contract. There’s a lot of flexibility there in Contract Management that you don’t currently have today in PO25.

This is just a sample of the rich client if you were to log in. Here’s the Contract Manager icon. When you open this up there’s options to create contracts. Create events if you had supplier portal. There’s processing contracts, analyzing contracts, you get the point. It’s very clean, very pretty, easy to use.

Creating contracts. This is the typical creation process in Contract Management. You’re adding the contract header in contract details, just like you do in PO25, PO25.6 today. You can choose whether or not you want the contract to relate to a vendor agreement, and then you tell the system what type of vendor agreements. Special, blanket, standing, quote, contract, or you can just have it sit in Contract Management. That just means it’s just there as a repository and it’s not connecting to S3 at all. It’s just sitting in Contract Management.

From here you release the contract. You go through approvals, any kind of negotiations you may