"Smart ECM" - Cloud-Based Enterprise Contract Management for the Global Enterprise
Enterprise Contract Management (“ECM”) has typically focused on the management of procurement processes as well as compliance processes with respect to the contractual obligations of the Enterprise. The utilization of Cloud and Big Data technologies support and create the potential for ECM to be extended to new activities across the Enterprise, including but not limited to sales processes, the execution of Go to Market strategies and the mining of Business Intelligence from contract compliance.
This extension of ECM has created two complimentary branches of ECM services. The first branch is Contract Management, while the second branch emphasizes Program Management. Let’s briefly examine these two branches and the functionality that they deliver.
Contract Management ECM covers all stages of the contract lifecycle from creation, execution and discovery through renewals, renegotiation, performance monitoring and financial analysis. Contract management enables Global Enterprises to actively manage all types of corporate contracts, including procurement and sales contracts.
Contract Management ECM features support the Global Enterprise in reaching the following objectives:
• To gain global contract visibility and transparency while optimizing the utilization of legal and contracting resources
• To dramatically improve supplier relationships, through the employment of Key Performance Indicators (KPIs) which actively drive contractual compliance and mitigates risks for procurement activities
• To automate sales contract management processes to speed time to revenue, reduce cost of sales and improve long-term customer relationships.
"Smart Machines” will truly drag ECM from the dark back offices of the Global Enterprise into the bright light of mission-critical business processes
Program Management ECM provides program management capabilities across spend, supplier and procurement initiatives. It provides a series of tools to manage programs proactively by monitoring, measuring and tracking program progress and results.
Program Management ECM delivers the following functions to the Global Enterprise:
• To improve management and accountability by establishing a framework to manage and monitor procurement programs.
• To identify sustainable savings and to reduce risk through the global coordination of savings and risk mitigation initiatives.
• To increase productivity and capacity by using a single, centralized cloud-based workspace for collaboration.
• To aid compliance efforts by defining processes and enforcing compliance with corporate standards and policies.
Why Cloud ECM?
Contracts and procurement documents have often been created within desktop applications which are often stored on local hard disks or network shares. This makes it very difficult to manage or provide oversight over these transactions. It also makes it difficult to harvest actionable data from the collective management of these documents.
If a user needs to access critical content in a location other than where it was originally stored, they often resort to sending it via email, copying it to an external disk, memory stick or laptop which they then take with them, notwithstanding the corporate security policies which often prohibit that kind of activity.
The availability of cloud-based ECM, which can also harness the analytics of Big Data as a Service (BDaaS) drives new efficiencies in terms of how this data can be utilized. Documents can now be centralized and easily accessed by authorized users on a global basis. Analytics allow the Global Enterprise to automate many of the processes around contract management, to help identify actionable data, to measure KPIs and financial results and, in some cases, to create opportunities to monetize this data.
One of the major impediments toward the adoption of cloud-based ECM have been concerns around security and the potential for critical Enterprise data to be “offshored” in jurisdictions without appropriate data privacy regulations. As a result of these concerns, Hybrid Cloud ECM is becoming a popular approach to facilitate these solutions. Critical data can be stored on site and encrypted and tokenized. That data can then be processed utilizing cloud-based ECM (which supports encryption and tokenization technologies) without the requirement of “offshoring” critical data.
Cloud-based ECM is transforming what essentially was a labor-intensive, disconnected back office business process to a centralized, automated and collaborative series of business processes that provide visibility, optimization, and competitive differentiation around the management of corporate contractual obligations, the procurement process and the sales process. Cloud-based ECM, if properly deployed, can provide greater transparency into the procurement process, drive compliance with corporate policies, manage autonomous monitoring processes and to conduct more meaningful financial analysis around the sales process as well as the procurement process.
In the near future, Cloud-based ECM will begin to use “Smart Machine” approaches based on context and deeply embedded analytics to drive additional autonomous processes that will provide greater oversight and optimization of critical business processes. “Smart Machines” will truly drag ECM from the dark back offices of the Global Enterprise into the bright light of mission-critical business processes