Contracts – the Missing Link: Utilizing Contract Management to Close the Gap on Savings and Compliance

Michael Koch, SAP Ariba / August 31, 2016
Contracts – the Missing Link: Utilizing Contract Management
to Close the Gap on Savings and Compliance
Public

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public
Important information
This information reflects the status of SAP Ariba solution planning as of June 2016. All such
information is the confidential information (per the contract between our companies), and must
not be further disclosed, as stated in the confidentiality clause of that contract. This
presentation contains only intended guidance and is not binding upon SAP or Ariba to any
particular course of business, product strategy, and/or development. Its content is subject to
change without notice. SAP and Ariba assume no responsibility for errors or omissions in this
document. SAP and Ariba shall have no liability for damages of any kind including without
limitation direct, special, indirect, or consequential damages that may result from the use of
these materials.

Agenda
Contract management overview
Ariba Contract Management

Different levels of contract management are used
to support organizations
Key activities
Operational management
• Implement day-to-day operational deployment and management of
suppliers – quality, health and safety, and risk management
Administrative contract management
• Review delivery in accordance with the contract – products and services
• Take action
Performance management
• Review supplier performance data
• Implement improvements and corrective actions
Strategic relationship management
• Manage strategic alignment and development interdependencies
• Identify opportunities for growth and act upon them
Increasingstrategicimportanceofcontract

Contract management helps to capture value from
sourcing activities
Contract
awarded
Supplier value scenario
Illustrative
Value
Contract tendering (typically perceived to be the
only place where procurement adds value)
How we capture value from our contracts
Strategic relationship management to create new supplier value
beyond what is in the contract
Performance management to maintain and gradually improve value
Zero or minimal contract management – “get and forget” the
contract
1
2
3
Time
Most sourcing savings can disappear without rigorous contract management

Contract management benefits
Benefits (based on benchmarks provided by SAP Ariba solution customers):
 Improved negotiation efficiency with up to 50% faster contract cycles
 Automated contract management from contract request, contract authoring,
workflows, and contract execution using electronic signatures
 Standardized contract processes and approvals and with all approvals done
within SAP Ariba solutions
 Up to 30% lower administrative and legal costs
 Reduced operating and regulatory risk
 Centralized contract repository with contract expiry alerts
 Improved supplier performance
 Automated workflow for supplier enablement and onboarding that is modeled
after leading practices

Contract management value drivers
Accelerate bottom-line results and mitigate litigation and regulatory risk
Better contract compliance
 Reduce contract leakage with noncontract suppliers
 Drive more spend to contract suppliers
 Help ensure more purchases are compliant with contract pricing
Captured rebates
 Easily identify contracts with rebate structures (tiered pricing, pricing formulas, indexed pricing, and the like)
 Track and capture lost rebates
 Embed automated milestone notifications for rebate tracking
Enhanced sourcing savings
 Improve visibility into expiring contracts and existing contract rates for timely renewals
 Minimize time spent researching and reviewing contracts
 Reduce contract duplication
 Boost compliance to standard contract terms
Contract visibility
 Gain enterprise-wide visibility into agreements and ability to accurately monitor and access satisfaction of contract
commitments
 Get notification of expiring contracts for improved renewal management
 Improve management of rebates and discounts
Process standardization
 Enable regulatory compliance (such as with the Sarbanes-Oxley Act)
 Empower enterprise users to create contracts from predefined templates
 Allow the legal team to manage by exception
Performance management
 Attain real-time internal and supplier compliance
 Easily identify existing contracts and avoid duplication
 Fulfill contractual obligations and, thus, satisfy business partners

These are the challenges we hear from our customers
 Weak contract management. Poor contract compliance,
belated renewals management, and lack of performance
information
 Ineffective contract creation. Lack of tight contract
authoring controls, creating legal risk
 Poor contract visibility. Dispersed and redundant
contracts and the inability to track regulatory compliance
or understand contract history
 Disconnected negotiation processes. Inconsistent and
e-mail-intensive processes, long negotiation and approval
cycle times, and risk of not including the correct
stakeholders
 Slow time-to-value. Poor user adoption, lengthy
deployment, and limited process and data integration
Legal

Delivering optimized contract lifecycle management
 Improved contract management. Improved contract
compliance, timely renewals management, and visibility to
performance information
 Effective contract creation. Tighter controls and
minimized legal risk
 Full contract visibility. Single repository for contracts,
elimination of redundant contracts, visibility into
commitments, and the ability to track regulatory
compliance and understand contract history
 Streamlined negotiation processes. Streamlined and
controlled processes, abbreviated negotiation and
approval cycles, and inclusion of the right stakeholders
 Rapid time to value. Enables strong user adoption,
delivers rapid on-demand deployment, and provides
process and data integration

Ariba Contract Management (buy and sell)
Driving spend compliance across all contract types
 Contract creation
– Contracts of any type: Buy, sell, internal/corporate
– Collaborative authoring – including integration with procurement and CRM systems
– Single point of access for sellers across all buyer relationships
– Standardized contract creation from templates and clause libraries
– Deep integration with the sourcing process for contract creation
– Powerful workflow and approval engine controlled completely within the user interface
 Repository, reports, and alerts
– Customizable, role-based dashboard for contracts data
– Advanced repository and search
– Automated compliance monitoring and alerts
 Compliance and usage
– Performance/audit management on contracts
– Integration with back-end systems for automated procure-to-pay usage of agreements
 E-signatures through DocuSign and Adobe Sign
 L1 customer support, BPC expertise, setup included in subscription
 Built-in integration to sourcing and procure-to-pay systems

E-signature services for Ariba Contract Management in partnership with Adobe Sign and DocuSign help customers
to go ink- and paper-free and close deals faster and more efficiently, increasing savings, revenue, and productivity.
Buyers E-signature partner Sellers
Ariba Contract
Management
APIs
Integration with leading electronic signature providers

Electronic signatures value proposition
Faster contract completion, reduced costs, improved controls
Source: IDC White Paper, sponsored by Adobe, “Bridging the Information Worker Productivity Gap: New Challenges and Opportunities for IT,” September 2012.
 Contracts completed in 1–2 days
vs. 2–3 weeks
 80% reduction in paper and supplies
 Detailed audit information and compliance
copies of every signed document

SAP Ariba* ranked as a leader
SAP Ariba Ranked as a Leader in Contract Life-Cycle Management for Buy-Side Contracts
PALO ALTO, Calif., July 26, 2016 – SAP Ariba today announced that it has again been ranked as a
leader in Contract Life-Cycle Management for Buy-Side Contracts by independent research firm
Forrester Research, Inc., this time in a new report titled “The Forrester Wave™: Contract Life-Cycle
Management, Q3 2016: The 14 CLM Vendors That Matter Most And How They Stack Up,” (The
Forrester Wave™: Contract Life-Cycle Management, Q3 2016, Forrester Research, Inc., July 2016).
.
*SAP Ariba is a new brand name launched in January 2016 and is used here to mean the offerings, employees, and business of acquired company Ariba, which continues to be our legal entity until
integration with SAP is complete

The market-leading software-as-a-service (SaaS) solution to better
manage contracts and commitments
Key imperative Why Ariba Contract Management?
• Most widely adopted contract management provider with over 450 total customers
• Able to manage the entire contract lifecycle for all agreements on an integrated SaaS, spend management/
sales acceleration platform
• Ranked as a leader by numerous independent analysts
Support end-to-end
contract management
Improve contract
management efficiency
• Flexible approach with configurable workflows in the contract management lifecycle incorporating all relevant
activity and information
• Process standardization tools driven by best-practice templates to remove bottlenecks and improve overall
contracting efficiency
• Tightly integrated electronic signatures capabilities making contract execution more transparent, faster, and
more secure
• Configurable dashboards with robust search, reporting, and task-driven alerts providing audit trails for
operational and regulatory compliance for best value agreements
• Enhanced ability to manage cash through improved visibility and forecasting
• Ability to plug into the Ariba Network to improve contracting efficiency and effectiveness while assuring your
return on investment
Manage commitments
more effectively driving
ROI

Thank you Michael Koch
Director - Solutions Marketing
michael.koch04@sap.com
+1.203.270.0765
#SAPAribaLive

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Contracts – the Missing Link: Utilizing Contract Management to Close the Gap on Savings and Compliance

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