Just the Facts: Contract Management, A Single Point of Truth

 Having been born and raised in western Canada, the recent devastating floods in the province of Alberta have really hit home with me. Unfortunately,unforeseen circumstances such as this will always be a factor in business operations: the spring flooding in Central Europe, Hurricane Sandy, political upheavals in the Middle East, the earthquake in Japan.Even (and, yes, this is a stretch!) my recent vacation to the ruins of Pompeii.

As an information management professional, I’ve also been imagining what it must be like for the local business community to maintain some semblance of operations under these conditions. The potential for breach-of-contract consequences is significant.

Take Calgary, for example. It’s well-known as Canada’s energy-sector HQ,home to the head offices of the country’s largest energy companies as well as regional offices for a number of major multi-nationals. These enterprises are part of a complex, truly global industry. And they all have contractual obligations to partners, clients, vendors and regulatory bodies around the world. Now, when you add in the myriad of other local businesses and government service bodies that haven’t been able to deliver against their respective contractual commitments, and you can begin to grasp the legal and financial scope of the situation. I can’t help but wonder how many of these entities adequately accounted for scenarios such as this when they were negotiating the contracts,developing a force majeure clause that would effectively negate or delay contractual obligations until regular operations can resume.

The fact is, if a significant service disruption like this can happen in a relatively stable environment such as Calgary, it can happen, in any form, anywhere. It could as large as a geo-political upheaval; it could be as seemingly small as a key employee resigning. Helping companies clarify and meet their obligations in unanticipated circumstances such as these is just one benefit of a contract management solution.
In today’s business climate, all organizations should have an enterprise-wide, structured process to manage the legal agreements that underpin their operations, safeguard their financial health, detail regulatory compliance, and protect their brand.

Thinking about this inspired me to go back and reread a contract management whitepaper we here at OpenText recently co-authored with highly respected energy-sector analyst group PennEnergy.While the paper primarily focuses on contract lifecycle management within the energy sector, it shouldn’t be surprising that all the factors and challenges driving the need for increased contract management awareness are universal:

  • The growing complexity of projects with multi-jurisdictional reach and expanded partnerships
  • Increased risk due to costly litigation and regulatory compliance demands
  • Cost-saving measures resulting in junior staff administering the contract management process
  • Intensified collaboration across business units and departments requiring optimal information sharing

The solution, as it is for most things in business, is found in organization and structure. In this case, a centrally controlled contract repository that’s custom-developed to serve as a holistic storehouse and searchable library for an organization’s agreements and legally binding documents. The benefits are immediate and impactful. Everyone, from procurement to marketing to finance, has instant, permission-based access to accurate, version-controlled documents. Automatic notifications are generated for upcoming renewals, expirations, and amendments. Pre-populated templates ensure enterprise-wide consistency in language and terms.

There’s so much more an effective contract management solution offers, as well. It’s the consummate opportunity to consolidate your single point of truth that one port in a storm you can trust to provide the vital information necessary to quickly respond to and recover from the unanticipated. It’s well worth investigating as part of an overall information governance program because, even amidst all the uncertainty and chaos in this crazy world,one constant endures: The unexpected will happen again.

Alison Clarke

Alison is Director of Product Marketing for OpenText ECM Content Suite and Extended ECM. Alison and her team are passionate about helping organizations use content services technologies to distill more value from information, supporting the needs of individuals and teams to improve productivity and strengthen information governance for the organization with ECM-enabled solutions.

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