Are you constantly wondering what or who is holding up your contracts?
Virtually every procurement professional I have spoken with in the past year has listed visibility and transparency as top goals for their group.
Most companies have a predefined path that a contract must follow to be executed.
Unfortunately, that path is manual and not always documented clearly.
There are tremendous efficiency gains to be captured by automating the process.
There are some common reasons that a manual approval process is still used that have been shared with me:
- “It will cost a fortune to customize this.”
- “How can we be certain that access will be restricted to the appropriate people?’
- “I wonder if any system can properly rout every contract given the multiple paths at each approval step.”
- “Some departments in our company are reluctant to give up control over their contracts.”
- “Some groups seem to be worried that an automated system will demonstrate that they are the bottleneck.”
- “I don’t believe that I can get every group to buy in even if logic says this will save time and frustration.”
- “Who has the time to make this happen?”
Resistance to change is common and that is why you need to communicate the benefits clearly to win over the naysayers.
Let’s assume that the approval path in your organization is reasonably documented. It may not be perfect, but it has 80% of the steps laid out.
If I was going to put in a system this is what I would want it to have:
- Sophisticated logic that determines the next step based on multiple criteria like size, spend category, department, contract or supplier type, urgency, etc.
- Automatic communication to alert approvers and reviewers that they are up next
- A specific time frame for action can be assigned to each step
- Automatic reminders on open or past due steps
- Ability to automatically send the task to a supervisor or designee if no action is taken
- Dashboard reports that display each completed or open step, delinquent tasks, history of on time and delinquent performance etc.
- Automatic dissemination of reports based on personal preference
Ok that should be enough basic points for you to consider.
You may be thinking that this all sounds great but how long will it take and how much will it cost to create and then maintain it?
Here is what I can share based on actual implementations:
If a process is well-defined this can be set up and tested in 3 weeks or less. This is the consultants time.
If your organization has many departments that are involved it may take 2 months, but the consultants time will be the same or similar. In other words, the additional time will be for internal discussions and finalizing steps.
If the process is not documented properly then it is likely that the consultant can lend their experience to help accomplish this. Experience with similar processes will move this along. Most organizations will realize that going through this process will help them streamline and eliminate unnecessary steps.
The investment will naturally be based on the consultant’s time and most organizations that offer this type of tool will also require an annual license fee.
You may be thinking that I have left out a maintenance fee and the cost to update the process if needed.
Quality organizations that offer this type of tool will not require a maintenance fee.
Updates should be rare and if required are likely to be based on changed approval levels or adding and/or removing steps in the process. These should normally be completed in 10% to 20% of the original time.
If your organization is struggling with a manual process that is stagnating contract routing and approval, I would welcome the opportunity to review your challenges.
You may be surprised to learn how quickly other companies have streamlined their process and are now smiling.
Ask better questions, make changes and 2019 will be your best year ever.
Action Step: If you are uncertain where to start the process of change, a procurement professional like myself can provide guidance and expertise to help your organization achieve the results you want.
If you want to go explore this topic in greater detail, please contact me. I invite you to request 30-minute discovery conversation. In my experience the next step will be apparent at the end of the call. I never assume that what I have to offer will be right for everyone, so don’t expect a sales pitch. You can reach me at (973) 718-7071 x875. The call will be forwarded to my mobile phone if I am not in my office which is pretty likely.
If you would like to know more ways to reduce costs without changing the way you do business, simply give me a call or send me an email with your contact information and the best time to reach you.
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Commit to taking the next step.
Until Next Time, I Wish You Great Success in Your Business and in Your Life