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will recommend starting with all documents right now moving forward and develop a phase II strategy of converting historical documents later.?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.

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.

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

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

Today’s post is by Ron Southard, CEO at SafeSourcing

The shame is that the retail industry is at least that bad. And we wonder why retail profitability continues to be a challenge. Not having a contract management in place can erode 3-5% of hard earned savings from your e-negotiation best practices.

If you put a bunch of senior executives in a room and ask them what they would like in the way of contract control; the meeting could last weeks. At the end of that time you might not have anything that resembles what you started looking for. And that is why we have the saying that a camel is a horse created by committee.

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 could 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 any 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, contact SafeSourcing and ask about SafeContract™.

We look forward to and appreciate you comments

Quite often the lengthier the contract the more legalese there is to try and interpret and almost every one you ask will in fact interpret it differently.   Most contracts begin with a section called definitions which is where most companies and associates get lost to begin with. This section is just exactly what it says, all terms used within the following clauses of the contract refer back to this section for their specific explanations of a terms meaning within that clause. You are probably finding this confusing already.

The simple way to begin is by focusing on the definitions as if it were a separate document and then set it aside and read through the clauses. Most of the time this will clear up some of the confusion.

Most contracts have a pretty good flow to them and will include a format that covers most if not all of the following.

1.  Definitions

2.  Merger and Integration

3.  Choice of Law

4.  Statute of Limitations

5.  Indemnification Language

6.  Time of Performance

7.  Arbitration

8.  Severability

9.  Fee’s

10. General Provisions

11. Non-Waiver

12. Liquidated Damages

If you need some help trying to interpret the flow of these documents, please contact a SafeSourcing customer services account manager to learn more about how SafeContract™ services can help you.

We look forward to and appreciate your comments

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.

We?have noticed an increase in discussions related to the effectiveness and benefits of including supplier penalties in contracts. From the recent opinions expressed, it appears that in the world of IT and Telecom, penalties included in Service Level Agreements (SLAs) are viewed as necessary and acceptable and are usually accompanied by financial incentive awards for exceeding SLA requirements. Other opinions note that penalties in product agreements can be counterproductive. The goal of penalties is usually to improve supplier performance and responsiveness.

Some large retailers such as Wal-Mart include penalties in the normal course of business as a standard operating practice. Wal-Mart made news in February of 2010 when they announced they would begin charging a 3% cost of goods penalty to suppliers and carriers that failed to deliver goods within a 4-day ?must arrive by date? window.

Other companies, such as PEPBOYS, clearly list its vendor requirements on their website and include penalties such as 5% of the cost of items not shipped if the on-time fill rate falls below 95%.

What constitutes an effective penalty will vary from one contract to another. Penalties should be clearly defined for the supplier. When determining penalty amounts, ensure that the penalty has enough ?bite” that it will cause elevated visibility within the supplier?s organization. Remember, if penalties are too numerous or frequent, they can become a burden to manage and consume your staff resources.

So, what?s the downside? Vendor penalties and fines can increase your cost of goods sold over time. Just the threat of penalties could be enough to cause a supplier to not want to do business with you. In the end, the use of penalties should always be legitimate and not a means of making money for your organization.

If you are looking to achieve the lowest cost of goods sold, contact SafeSourcing to see how we can help.