Archive for the ‘Contract Management’ Category

Are you monitoring your Contract Leakage? Can You?

Monday, October 12th, 2015

 

Todays post is by Ron Southard, CEO at SafeSourcing Inc.

The answer is probably not or you would not have any and 80% of all companies not only have contract leakage, but because of it they often do not realize the hard earned savings the negotiated with their new e-procurement tools.

However congratulations are in order, you have used your new e-procurement tools effectively and awarded the business to a new supplier. You may have also offer a Letter of Intent or LOI to get things moving while the contract is being completed. With that assumption in place, how does your organization ensure that the award of business is implemented or delivered as awarded so that you indeed receive all of your savings?

This is probably the most difficult part of the entire procurement lifecycle. The first step is to understand your data and where it is kept, that includes understanding what constitutes contract leakage so that you know what you are looking for. This data needs to be looked at on a regular basis in order to insure leakage is not occurring. This should be at least monthly depending on specific contract language (Meta data). Most contract management systems have alerts that can be triggered as frequently as required against this data.

The following list although not all inclusive speaks too many of areas in which contract leakage can occur. This happens in all companies large and small. If you are aware of them, capture them and report on them regularly there is a good possibility of controlling them.

1.  Award Date
2.  LOI Date
3.  Contract Date
4.  Delivery Dates
5.  Quality specifications variances
6.  Making payments at a prices different from the contract
7.  SOW creep
8.  Rebate misses
9.  Escalator Misses
10.  Invoice discrepancies
11.  Missed volume discounts
12.  Insurance discrepancies
13.  Shipping discrepancies
14.  Expiration dates
15.  Expiration Notification Dates
16.  Auto Renewals & Evergreening

Don’t work hard to drive benefits from your procurement organization and then lose much of what you have gained to contract leakage. If you’d like to learn more about SaaS based Contract Management offerings, contact your SafeSourcing customer services representative and ask how they can help.

We look forward to and appreciate your comments.

Share This Post

How Much Does FREE Cost? Simple Question right?

Tuesday, September 1st, 2015

 

Today’s post is from the SafeSourcing Archive

The byline to this post would seem simple but the number of large companies that are taken in by it is staggering.

My brother dropped his phone and to no surprise the screen was cracked. He took it into his wireless provider and without insurance he would have to buy a new phone. A new phone? That sounds great! Right? Well he did not have an upgrade available and without insurance he would have to buy the phone at “full retail price”.

The phone that cost him ZERO dollars when he signed a two-year contract was $349.99! I understand that the contract gets you a better deal, but how do wireless providers make a profit when they are just “giving away” phones.

Wireless providers subsidize the cost of your phone into your wireless plan. They have to pay the manufacturer for these phones, but take such a large hit initially in the contract. It takes wireless providers an average of at least six months to begin making a profit on your wireless contract. Makes you wonder how low your service contract could be a month if you paid “full retail” price for your phone.

Many companies have used the word ‘FREE’ to sell a product or service, but are they really free? If you did not accept the free or significantly low cost coffee maker for the office would the year supply of coffee be cheaper? There is a cost for free and that cost usually falls back on the customer or consumer.

SafeSourcing, Inc. has the knowledge and expertise to eliminate the cost of ‘free’ from your service related plans.  If you’d like more information on how avoid the free pitfall, please contact a SafeSourcing customer services representative.

Be careful out there or you might just get what you have not asked for.

We look forward to hearing from you.

Share This Post

Are You Still Printing And Filing Documents in Filing Cabinets?

Tuesday, August 25th, 2015

 

Today’s post is written by Heather Powell, Director of the Customer Focus Team & Project Manager at SafeSourcing Inc

paperstacks

 

 

 

 

 

 

 

 

My co-worker once asked me how many trees I planned on killing one day when I printed a hard copy of a Request for Proposal I had written. I suppose I am “old school” to have paper in hand and make my edits in red pen, then make my revisions to the electronic document, and save those edits in our document management system. Now I have a hard copy in a filing cabinet that, more than likely, no one will ever see and eventually be shredded.

We are a Green company, and I am becoming more cognizant of that by limiting what I print, and save more trees. By utilizing the document management system, the original drafts, as well as all of the edited copies are saved, anyone from our company, at any point and time, can visit those documents and follow the train of thought from beginning to end. It saves time and paper to have those documents accessible.

From our website: www.safesourcing.com

SafeDocument™

SafeDocument™ is a document repository that allows companies to collaborate on documents through an online tool that is a cloud-based SaaS offering available through simple internet access. This tool Provides document sharing and collaboration options where users can organize, edit, protect, and track their documents.

SafeDocument™ includes safety features and controls that enable users to safely share large files across their organization, including the ability to save and recall multiple versions of a document and a notification system that alerts users when changes to the document have occurred.

Implementing SafeDocument™ provides companies with a cost-effective alternative to enterprise content management solutions that is safe and easy to use.

To learn more about SafeDocument™ SafeSourcing can assist you in exploring your document management procedures for your business or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

 

Share This Post

Paper or Electronic – The Future of Your Documents

Friday, August 14th, 2015

 

Today’s post is from the  SafeSourcing Archive.

Faxes, letters, catalogs, whitepapers, newspapers, and books are all things that are in the process of becoming extinct or have been converted to a newer electronic version of what used to be.  The world has been electronic for decades and will continue to move in a direction where nothing gets printed on paper any more.  Whether you support or fight this trend, it is clear that the management of corporate documents is becoming a top priority as file cabinets become empty and hard drives get full.  Today we will look at some of the key points to developing a strategy for managing your digital documents and some details to keep in mind when looking for third party suppliers who can provide assistance to help you with the task.

Establish the starting point – One of first strategic decisions you will make in managing your documents electronically will be to decide how far back you are going to go in getting old documents converted to digital format.  Historical contracts, agreements, and other legal documents will likely need to be managed in this process but will not always have an electronic format.  Some strategic partners will recommend starting with all documents right now moving forward and develop a phase II strategy of converting historical documents later.  The strategic partner you select may also have a staff of employees and solutions that will allow for an easier conversion path as well.

Storage Location– Where you store your electronic versions of documents is the most important decision you will make for the security and protection of your company.  Your IT department will likely have input to lend on this matter and a corporate policy on sensitive documents will also come into play here as well.  Whether they are stored digitally in a database, as files in a folder structure, on computers within your company or  by a 3rd party, the location of your files and the backup procedures to ensure they are safe are important pieces that will dictate the solution, process or partner you choose.

Workflow integration – Document storage and management are one piece of this process, the other piece will be how those solutions/processes integrate with the productivity tools you are using today.  Many document management systems have links into the major office suites of tools like Microsoft Office that will allow for links into the document management system within the tool you are using.  This makes checking out and editing files by multiple people much easier.  Worklflow aspects of a document management system are very important as the majority of documents will have multiple people all working together on them and the capability for a system to allow this without overwriting existing edits is critical.

Version Control & Audit Trail – Along with workflow integration the capability of a document management system to allow users to lock files for changes, create new versions and to provide audit trails for all edits should be one that is required in any implementation.  Being able to track and rollout back to previous versions of a document is an important aspect to protecting companies in situations that arise years after an activity was conducted.  Automated alerts and change subscription features are other aspects to link directly to version control and should be investigated in any solution you review.

Managing corporate documents should be a top priority for every company and the keys above should be considered when evaluating current processes and new vendors to help with the process.  For more information on how SafeSourcing can assist your team in sourcing Document Management Solutions or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Share This Post

You can’t own the sun

Thursday, July 2nd, 2015

 

Today’s post is by Michael Figueroa, Project Manager at SafeSourcing

Maria Duran, of Spain, has been selling “plots” of the sun on eBay since 20131 . She created documents laying claim to our solar system’s only star and had them notarized, and auctioned off these plots with notarized certificates. When Ebay shut down her online store, she sued (Can anyone who’s ever been sunburnt sue her?) However crazy her claims may sound, how is it any different than from any other ownership claim? How does a person or organization make claim to land, goods, oceans, or ideas, and prove or disprove “ownership” other than to say “that’s mine!”? There are two basic concepts at the heart of every ownership claim:

Ownership as an agreed-upon standard within a society:
In most civilized societies, ownership standards are established that “legitimize” a claim. These claims are only functional because of the compliance of the society as a whole with this standard. This is very similar in concept to money: It’s only as good as what people agree to trade you for it. There are places in the world where claims to ownership of even human beings are commonly made. This is why having agreed upon standards within that society are so important; Allowing ownership of people, life or shared life-giving resources (like water or the sun) can have (and have had) disastrous outcomes for societies.

Ownership as control that cannot be overcome:
The other standard of ownership stems from simply exerting control over an object that no-one else has the power to oppose. Ownership claims of territory by governments are in place all over the world, enforced by the threat of exerting control through the military. Ideally force is used only to protect the more peaceful standard of agreed-upon societal ownership standards.

There are costs and benefits associated with ownership. In purchasing, WHEN transfer of ownership takes place is critically important. Concerns arising from point-of-ownership include:

·  Who pays for freight?
·  Who pays for damaged goods?
·  Who is responsible for temperature control?
·  What happens if product is not up to spec?
·  How do I verify transfer of ownership happened?

[1] “The curious case of the woman suing eBay over ownership …” 2015. 16 Jun. 2015 <http://www.washingtonpost.com/news/the-intersect/wp/2015/06/04/the-curious-case-of-the-woman-suing-ebay-over-ownership-of-the-sun/>

Understanding the agreed upon FOB point is crucial to call out in your documentation. Because as Maria Duran can tell you, ownership disputes can be difficult to sort out.

For more information on how SafeSourcing can assist your team with this process or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments.

Share This Post

Business as Usual? We Should Hope Not When It Comes to Contracts!

Tuesday, June 30th, 2015

 

Today’s post is written by Heather Powell, Director of the Customer Focus Team & Project Manager at SafeSourcing Inc.

'In conclusion; our major contract expires tomorrow, we have no idea what we want, and no knowledge of the market,  It is time to pass this across to the Procurement Team,,,'

 

 

 

 

 

 

 

Do you have a contract expiring soon? Or are you working from a contract that already expired months or years ago and have not done anything with it?

Now is the time to act, do not let your contract go on any further until you know for sure it is beneficial to your company.

How do you go about making that assurance? By doing a lot of research and homework first and foremost, and asking those who need the goods and services on the contract if there are any changes, modification, recommendations that they would like to see. Many times goods are purchased through the supplier you have always worked with…or why rock the boat when it has always worked great for your company in the past.

In either circumstance, it is great you have confidence in your supplier or their product; but are they offering you the best product, warranty, certifications, services, pricing, and even net terms?

By running a RFI to gather information from your supplier’s competition, you can determine who’s who in the category. By running a RFP you can see if they can implement the same, or better pricing, or net terms.  Running a RFQ with all the suppliers, including your supplier or incumbent, you can be sure they are competitive in their pricing, terms, and goods.

It is never good business practice to let a contract expire or work from an expired contract. SafeSourcing can assist you in exploring your procurement solutions for your business or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative.  We have an entire customer services team waiting to assist you today.

We look forward to your comments

Share This Post

Contract review is tedious work?

Saturday, May 30th, 2015

 

Todays post is from Ronald D. Southard, CEO at SafeSourcing Inc.

Many large companies have law departments and at least as many don’t. Most small companies don’t either. Which company is in better position to review and evaluate existing contracts?

The answer is neither or maybe both. The first important question for each type of company is who is actually evaluating the contracts, and just because they have a law degree does not mean that contract evaluation is a specific skill set this individual may possess. This author strongly recommends choosing who will provide this function within your company or as a service and then make absolutely sure that they have the skill set required to do the job and stay up to date.

There are any number of contract management certificate programs available from prestigious and well know institutions. To name a few, there is Villanova University, The University of California Irvine and St. Louis University. In addition there are organizations that also offer this type of training. Probably the most well know is, the National Contract Management Association or NCMA that has been around for over 50 years.

Many of these organizations offer on line courses that can be completed within a reasonable period of time. Many of the University and College courses are actually accredited as well as affiliated with NCMA.

Once you have resources that are certified, provide them with the tools they need to do their job. All companies have 100’s if not 1000’s of contracts and most do not have a contract management solution. These solutions today are available via the cloud in Software as a Service model for very little investment. You can buy what you need when you need it. Most of good providers will also assist with evaluating your existing contracts in order to create your Meta data and populate your  contract database.

SafeSourcing offers a cloud based Software as a Service contract management solution called SafeContract™ which is supported by these types of services.

Please contact a SafeSourcing  customer services representative in order to learn more.

We look forward to and appreciate your comments.

Share This Post

What are you doing about your Contract Management Needs?.

Tuesday, February 10th, 2015

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

If you want to insure against contract leakage that can be as much as 5% per year and also protect the savings from your hard fought eNegotiations, it may be time to take a look at your contract management needs.

Most contract management systems have relatively short ROI periods. In fact a company might even be lucky enough as they go through their data collection process to find a single contract that when analyzed might pay for the entire system.

There are all sorts of benefits associated with using contract management software. Probably the most important and least recognized of which is finally having all spend data in one location enabling more effective negotiations. If you have ever run an e-procurement event and tried to assemble a simple specification or incumbent supplier data you already understand the time involved. Administrative costs alone can be reduced by 25-30%.  That’s a huge number in today’s world of insufficient staff.

If you want to get started, here are some basics that a system should be able to provide.

  1. Create contracts
  2. Maintain contracts
  3. Control contracts
  4. Track user access to contracts
  5. Track and monitor the status of contract Meta data
     a. Award date
     b. Contract begin date
     c. Contract end date
     d. Begin delivery date
     e. Escalator language
     f. Notification clauses
     g. Termination Clauses
  6. Automatically alert buyers and management of required actions
  7. Custom Reporting
  8. Supplier Scorecards

If you want to get started tomorrow, please contact a SafeSourcing customer services account manager and ask about SafeContract™.

We look forward to and appreciate you comments

Share This Post

What is a price or commodity index and how is it used?

Thursday, January 8th, 2015

 

Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.

This author has heard a lot lately about prices indexes or indices. Every time we source something we are asked what index should we use. Although there are times when an index is helpful in sourcing in order to manage contracted pricing once a baseline has been determined versus the rise or fall of an index, that is not always the case for every product.

Here is an old post from November of 2011 where I feel the subject was described well that you might find useful.

I was reading our local paper today “The Arizona Republic”. In their MARKET TIP on page 3 of the business section they had a nice synopsis of the Consumer Price Index or CPI relative to measuring inflation. It was brief and holds true in terms of how indices are used to measure the rise or drop in prices over time. In your annual contracts you may wish to review them quarterly and have escalator language that locks in price increases or decreases versus a specific index to protect you from volatile commodity markets like the oil market.

According to the Bureau of Labor Statistics website, the Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The CPI is used as an economic indicator, a deflator of other economic series and as a means of adjusting dollar values. The CPI affects nearly all Americans because of the many ways it is used.

To learn more about how the CPI index is used please visit the Bureau of Labor Statistics website.

If you’d like to learn more about the variety of indices and how they impact the many products that you buy for reuse as well as resale or if you are not in the business of prognostication, please contact a SafeSourcing  customer services account manager.

We look forward to and appreciate your comments.

Share This Post

How does your organization ensure that every award of business is implemented or delivered as awarded?

Friday, October 11th, 2013

Stopping contract leakage is one of the most difficult tasks in the entire procurement lifecycle. To begin with, you need to understand where the data to be measured is kept. Good luck if you do not have a contract management solution. Once you have a clear idea as to the location of the data, it needs to be looked at on a regular basis in order to insure leakage is not occurring. The question here is what constitutes leakage and how often it should be reviewed such as monthly depending on contract language. Most contract management systems have alerts that can be triggered as frequently as required.

If you had a contract management system, most of the following list speaks too many of areas in which contract leakage can occur and can also be measured. These discrepancies happen in all companies large and small. If you are aware of them, capture them and report on them there is a reasonable possibility of controlling them. Again, you can’t do it without a contract management system

1. Buying without a contract.
2. Expensing something outside of a contract
3. Having multiple contracts in place:
4. Executing a new agreement when one is already in place
5. Paying a price different from the contract
6. Delivery variances
7. Quality specifications variances
8. Making payments at a prices different from the contract
9. Scope creep of the product or service purchased without change control
10. Resulting Invoice discrepancies
11. Missed volume discounts
12. Insurance discrepancies
13. Shipping discrepancies
14. Expired contracts resulting in price uplift (evergreening)
15. Overtime Violations
16. Material discrepancies
17. Sub Contractor discrepancies

Don’t work hard to drive benefits from your procurement organization and then lose much of what you have gained due to contract leakage. Ask your e-procurement solutions provider how they can help.

We look forward to and appreciate your comments.

Share This Post