Contract Management and Governance of Complex Partnership

Business success and outsourcing success are inseparable. We help our clients establish the governance disciplines and obligation tracking that are necessary to capture the benefits of global contracts and partnerships by managing these and their lifecycle, staying in control and constantly maximizing the value/cost relationship.

 
 
We handed over one of our major complex delivery contracts with more than 1000 pages, and two weeks later we got a very clear and intelligent extract, containing a structured overview of our delivery responsibilities, our obligations, and our Service Level agreements, organized according to our requirements – straight forward usable for our delivery managers.

Vi afleverede en af de store komplekse kontrakter på over 1000 sider og fik 2 uger senere et meget overskuelig og intelligent udtræk tilbage, der indeholdt et struktureret overblik over vores leveranceansvar, vore forpligtigelser og vore SLA’er organiseret efter vore ønske – lige til at gå til for de leverance-ansvarlige
— Henrik Ulsø, Vice President, KMD

TODAY BUSINESS SUCCESS IS INSEPARABLE FROM OUTSOURCING SUCCESS

Today Business Success and Outsourcing Success are inseparable – outsourcing and offshoring are important provisions to enable focus on core competencies and to be able to compete in a global world.

Furthermore, the outsourcing scene has changed dramatically. Companies face a multi-sourcing environment with an increasing number of outsourcing contracts. At the same time these contracts are getting more complicated and the contract life cycle is getting shorter and vendors change more often.

Vendors and Clients are equally challenged by the increasingly complex contracts and requirements, and Mio have helped both vendor and client side to improve and automate their management of such contracts. Interestingly the contracts are designed to guide the relationship, but rarely we see contracts to be the dynamic and transparent set of rules for cooperation that it should be. Clients and vendors alike, will benefit from transparency in the contract text, the expected governance, the changes made over time, the obligations that both parties will need to adhere to, the SLA's that guide the expectations, the financial results for both parties, the risk associated, and tracking of issues and actions to closure.  

Figure 1: Source: Whitelane Resarch 2016 Nordic management summary

Figure 1: Source: Whitelane Resarch 2016 Nordic management summary

Our clients therefore face increasing complexity in the outsourcing environment and consequently need to manage a number of new challenges in order to capture the benefits of global contracts and partnerships and ensure return on investment.

NEW CHALLENGES:

  • Work across a wide range of ever-changing, collaborative business models. Examples are single-sourcing, multi-sourcing, global business services, distributed teams, off-shoring, near-shoring, ..

  • Manage operational models from procurement to vendor management to global business services

  • Survive in a more technology driven and interdependent business scenario

  • Navigate in a world where many fundamental management principles are giving way for new interdependent approaches coming from a new generation of business managers

  • Manage in a world of bi-modal models and cloud computing

MANAGEMENT OF COMPLEX OUTSOURCING CONTRACTS BECOMES MORE IMPORTANT

Figure 2: Successful vs Unsuccessful Vendor Management

Figure 2: Successful vs Unsuccessful Vendor Management

The management of complex outsourcing contracts today involves many different functions in the organization with a high risk of an uncoordinated effort and no clear objectives resulting in poor results and low return of investment.

For example, we believe that a coordinated Vendor Management discipline should be put in place at client side, with accompanying new business processes, objectives and governance. Likewise an Account Management discipline should be established with vendors, to manage the relationship with strategic clients. 

 
 
 

We help establish and manage both vendor and account management disciplines

Mio Management help client side companies to move from traditional purchasing to “Vendor Management” - a central and important discipline which ensures a coordinated and managed Vendor Management discipline throughout the organization. Likewise we help sell-side companies to establish and mature Account Management disciplines, to enable both client side and vendor side to benefit from transparency and maturity in the service acquisition and delivery disciplines. 

We help to design and build the disciplines that captures the benefits of global contracts and partnerships. This discipline includes managing global contracts and their life cycle, managing relationships and building delivery models. We also assist clients on a more operational level, building processes, ensuring the profit of a single contract, re-shaping contracts, creating improved governance of existing contracts, establishing systems in order to manage SLA’s better and so on.

We build our services on models that we have developed based on industry standards and processes combined with our many years of practical experience within the area of global collaboration.

For example, our Vendor Management services include:

Vendor Management Processes.png
  • Overall design and implementation of the Vendor Management discipline across the client organization

  • Establish and implement processes for relationship management - transition in/out, sourcing and negotiation processes, adjusting of organization and competencies, change management and relationship lifecycle - including clear roles, responsibilities, KPI's and measurements

  • Establish and implement processes for contract management - manage contracts and obligations, manage performance, manage risk, manage financials, manage disputes, monitor and report

  • Identify the necessary data, management information and tools to support Vendor Management

  • Implement a central Vendor Management function with overall responsibility for vendors which ensures a managed and coordinated discipline across the organization

  • Bringing a troubled contract back into shape - using our 7-keys methodology as an accelerated approach to fast identifying problem areas followed by the identification of the necessary interventions in order to get back in shape and implement these

  • Assess Vendor Management maturity - how mature is the vendor management processes and consequently how should these be matured

  • Assess the possibility for contract leakage reduction - in our experience it is possible to reduce leakage with up to 25 pct. of the contract value - and implement this

  • Maturing the ability to validate invoices against performance to ensure the correct connection between delivered performance, invoice and contract agreement 

we deliver our services using an accelerated approach

We always aim for an accelerated approach when delivering our services using “fast -track” methodologies as for instance our 7-keys approach that within a week delivers recommendations on how to turn a troubled contract around. This recommendation furthermore has the “buy-in” from the involved parties in the client organization. 

If you are interested in learning more or discussing how we can help you, please pick up the phone and give us a call.

 
 

Utilize our Vendor Management Assessment questionnaire and feedback service

Mio Management provides a unique self-assessement opportunity, where you are invited to fill in this questionnaire and get a free feedback from our experienced consultants. Please download the document, fill it in, and send it back to info@mio-management.dk

 

Questionarie