1. Implementation and Use of a Contract Management Methodology
Introduction to contract management processes and to the fundamental aspects of contract management roles
Practical experiences from contract management methodology implementations
Ole Horsfeldt

2. Introduction
Contract and vendor management at the core of the (outsourced) enterprise
VISION
A clear vision and strategy on what it takes to be an outsourced enterprise
HR STRATEGY
Knowledge retention and appropriate HR strategy covering skills and incentives
PROCESSES
Ability and processes that link business technology with business strategy in an proactive manner
CONTRACT MANAGEMENT
A formal contract management implementation with clear roles and task descriptions integrated with contract manuals/playbooks
Use of a common contracting platform (templates) for all types of outsourcing contracts
Implementation of a service agnostic risk management system

3. When implementing a contract and vendor management methodology, we face two main challenges…
Contract management is in reality performed in a cross organisational manner but contract management is most often organised in a silo
Most organisations don’t have a clear understanding of which informal processes they actually use and which processes would serve contract management purposes well
and
Contract management
procurement
Delivery and obligations tracking
Issue management
D&O reporting
Escalation, negotiation
Performance management
legal
finance
Issue qualification – is there a dispute?
Service management
Dispute management
Recipient/user
Incident management
Dispute resolution processes
Domain experts

4. Having responded we were then asked: Please implement your ideas.….
In 2014 a client asked us: How to do you see contract management – what is contract management to you?
Having responded we were then asked: Please implement your ideas.….
This presentation tells our journey from inventing and designing a role based contract and vendor management methodology to implementing it with a variety of buyer organisations
Explain the importance to GSS

5. The core of our philosophy
Introduction to Gorrissen Federspiel’s contract management methodology
The core of our philosophy
Contract management is about:
use of well structured know how in a Consistent manner and
taking appropriate discretionary decisions
in other words decisions taken by well-trained people applying years of accumulated knowhow )
based on
Contracts
understanding of the organisational attributes of your own and the supplier’s organisation
the involved personal dynamics and relationships
The core ability to do contract management is not about automation, storage of contracts, and software solutions but can benefit greatly from being supported by such systems
Contract management is done by individuals and groups of individuals collaborating in a coordinated manner with distinct responsibilities

6. The framework - Gorrissen Federspiel’s contract management methodology
The philosophy
Each person must understand her role – that requires detailed role and task descriptions and work flows

7. The framework - Gorrissen Federspiel’s contract management methodology
The philosophy
…and you must add training and easy-to-use event based playbooks that double as contract manuals
…thereby giving your contract managers an understanding of details of their specific task and role and where they fit into the overall picture

8. The Contract and Vendor Management Framework
The framework - Gorrissen Federspiel’s contract management methodology
The Contract and Vendor Management Framework
Service and contract generic
contract specific or agnostic
Tasks for roles
Workflows between roles
Playbooks/contract manuals
Roles
Processes

9. The 6 contract management processes
The framework - Gorrissen Federspiel’s contract management methodology
The 6 contract management processes
Performance
management
Financial
management
Optimization
management
Compliance
management
Dispute
management
Time
management
To ensure performance of the services and to enable enforcement of such performance
Financial control, budget compliance and foreseeability and to avoid over-payments and value leakages and to use financial incentives to drive behavior
To extract value the parties contracted for and to optimize the value beyond the original expectation
To enable the Customer to remain compliant with legal requirements relevant to its business
So that disputes and disagreements are dealt with efficiently and quickly without a detrimental effect on the relationship between the parties
So become aware of and use the rights and strategic opportunities that apply at particular intervals

10. Workflows between roles
The service and contract generic – or agnostic - roles and role descriptions
Tasks for roles
Workflows between roles
Roles
Processes

11. The 6 contract management processes
The service and contract generic – or agnostic - roles and role descriptions
The 6 contract management processes
Performance
management
Financial
management
Optimization
management
Compliance
management
Dispute
management
Time
management
Lead manager
Lead manager
Lead manager
Lead manager
Lead manager
Lead manager
1 lead manager and other general managers.
1. We assigned roles to each of these 6 contract management areas who together have the responsibility for managing that area
2. Roles are allocated to people
3. One person can have several roles

12. The service and contract generic – or agnostic - roles and role descriptions
Role description – setting out overall/general responsibilities for that role
PROACTIVE TASKS
and REACTIVE EVENT-BASED
The 6 contract management processes
Performance
management
Financial
management
Optimization
management
Compliance
management
Dispute
management
Time
management
Lead Manager
Transition Manager
Performance Manager
Multiple Vendor Manager
Change Manager
Risk and Security Manager
Technical Architecture and Policies Manager
Retransfer Manager
Lead Manager
Budget Control Manager
Financial Change Manager
Audit Manager
Benchmarking Manager
Lead Manager
Innovation Manager
Relationship Manager
Contract Information Manager
Lead Manager
Data Protection Manager
Regulatory, Policies and Confidentiality Manager
Lead Manager
Dispute Manager
Lead Manager
Time Manager

13. The service and contract generic – or agnostic - roles and role descriptions
Role description – setting out overall/general responsibilities for that role
PROACTIVE TASKS
and REACTIVE EVENT-BASED
The 6 contract management processes
Performance
management
Financial
management
Optimization
management
Compliance
management
Dispute
management
Time
management
Lead Manager
Transition Manager
Performance Manager
Multiple Vendor Manager
Change Manager
Risk and Security Manager
Technical Architecture and Policies Manager
Retransfer Manager
Lead Manager
Budget Control Manager
Financial Change Manager
Audit Manager
Benchmarking Manager
Lead Manager
Innovation Manager
Relationship Manager
Contract Information Manager
Lead Manager
Data Protection Manager
Regulatory, Policies and Confidentiality Manager
Lead Manager
Dispute Manager
Lead Manager
Time Manager

14. The service and contract generic – or agnostic - roles and role descriptions
Example of role description for a Performance Manager under Performance Management

15. The service and contract generic – or agnostic - roles and role descriptions
Example workflow

16. The implementation project

17. Let’s be clear about the challenges!
The implementation project
Let’s be clear about the challenges!
‘What management will think
What management needs to understand
Everyone who interacts through personal interaction or through with the supplier is a contract manager
You never need a system before you have the knowhow and the right people
Contract management is done across the organisation by the ITSM organisation, by finance and internal audit, by legal, and by vendor management: you’re one team
We need one contract manager
We have a vendor management organisation, they can run our contracts
We need to buy a system
Explain the table and what happens if an agreement is not well managed.
Implementation is easy, just get it done quickly
Implementation is a fundamental change project that needs to be driven from top down

18. The two implementation models
The implementation project
The two implementation models
Organisational approach: a group of dedicated contract managers handle many contracts and fulfil a specialist role (typically just one role) in relation to many contracts
Contract approach: The separate team per contract approach where dedicated individuals manage only one contract and each individual will have multiple roles
Apply to all relevant major contracts
Add playbook/contract manual for each new contract
No matter the model, the key is resolving the cross organisational riddle and the assigning of persons to roles

19. The implementation project
The organisation approach recommended: Large company with many business critical outsourcing contracts (this is an outsourced company)
Performance
management
Financial
management
Optimization
management
Compliance
management
Dispute
management
Time
management
Lead Manager
Transition Manager
Performance Manager
Multiple Vendor Manager
Change Manager
Risk and Security Manager
Technical Architecture and Policies Manager
Retransfer Manager
Lead Manager
Budget Control Manager
Financial Change Manager
Audit Manager
Benchmarking Manager
Lead Manager
Evolution and Innovation Gain Sharing Manager
Relationship Manager
Contract Information Manager
Lead Manager
Data Protection Manager
Regulatory, Policies and Confidentiality Manager
Lead Manager
Dispute Manager
Lead Manager
Time Manager
One person per lead manager role
Groups of persons for each manager role – a person can have main responsibility in relation to a particular contract or domain of contracts
Implemented across many contracts
ITSM or similar roles mainly manned by separate organisation
1 lead manager and other general managers.

20. Streamlined roles with essentials
The implementation project
Both implementation models recommended: Medium sized company with one major outsourcing contract and additional outsourcing contracts
Performance
management
Financial
management
Optimization
management
Compliance
management
Dispute
management
Time
management
Lead Manager
Transition Manager
Performance Manager
Multiple Vendor Manager
Change Manager
Risk and Security Manager
Technical Architecture and Policies Manager
Retransfer Manager
Lead Manager
Budget Control Manager
Financial Change Manager
Audit Manager
Benchmarking Manager
Lead Manager
Evolution and Innovation Gain Sharing Manager
Relationship Manager
Contract Information Manager
Lead Manager
Data Protection Manager
Regulatory, Policies and Confidentiality Manager
Lead Manager
Dispute Manager
Lead Manager
Time Manager
1 lead manager and other general managers.
Streamlined roles with essentials
Lead manager can have other roles within that area
One person can have more than one role
SMEs will possess contract manager roles

21. One common lead manager
The implementation project
Contract approach recommended: Smaller companies with one business critical outsourcing agreement
Performance
management
Financial
management
Time and Optimization
management
Compliance and Dispute
management
One common lead manager
1 lead manager and other general managers.
Several processes collapsed into fewer processes
One or a small team per contract area
One person can have more than one role

22. The implementation project
Existing delivery/services processes are connected to the contract management processes through process maps –
This is an essential part because this is where the “end to end” process is created that enables efficient contract management

23. The implementation project
Example of the performance manager role mapped into a RACI chart for incident manage
R=Responsible
A =Accountable (Approver)
C= Consulted
I= Informed
Responsibility
User/Customer
Service Desk
ITSI
Vendor
Contract Management Performance Manager
Create Incident R
Provide Info
Resolution confirmation
Analyze Incident C I
Resolve front-end issues
I, A
Responsible for S2-S4 issues A
Forward back-end issues to vendor
Inform customer, Service Line and ITSI
Close incident
Incident follow up
Responsible for S1 issues
R, A
War-room creation
Escalation (If SLA not met)
Create change or problem
Reporting
Analyze incident
Solve incident

24. Recap and time for questions

25. The 6 contract management processes
Recap and time for questions
The 6 contract management processes
Performance
management
Financial
management
Optimization
management
Compliance
management
Dispute
management
Time
management
Processes
Roles
Tasks for roles
Workflows
between roles