Implementation of Vendor & Contract Management system (Greenfield)
A €2,5 billion specialised industrial service provider was struggling with:
1. Poor visibility into supplier relationships
2. Inefficient contract management
3. Limited governance structures
4. Reactive rather than proactive decision-making
5. Challenges in tracking savings and contractual compliance
Objectives
The implementation had 5 main goals:
1. Improve governance and risk management.
This means establishing clear oversight of supplier relationships to prevent compliance issues and contractual problems before they occur.
2. Improve legal templates.
Instead of accepting for negotiations supplier’s paper , we have to develop client’s own legal templates for a variety of occasions.
3. Implement efficient change management.
Creating processes to handle contract changes and renewals systematically rather than reactively.
4. Optimise spend and terms.
Ensuring the company gets the best value and favourable terms when entering new contracts or renewing existing ones.
5. Prepare for CLM technology adoption.
Contract Lifecycle Management software provides automation and standardisation, but organisations need proper processes in place before implementing such tools.
Implementation Approach
The approach consisted of several interconnected workstreams:
Contract assessment and remediation
We reviewed approximately 270 existing contracts to identify obligations, risks, and unfavourable terms, then created action plans to address these issues.
Development of client’s legal templates
We have drafted 14 different legal contracts, ranging from Master Service Agreements, Long/ Short form SaaS Agreements, Consultancy Agreements, Hardware Agreements, NDA and others. By insisting to have as a starting point .
Process readiness assessment
We evaluated existing contract processes to identify gaps that would need to be addressed before implementing a CLM tool.
Performance measurement framework
We developed 20 custom KPIs with associated dashboards to monitor performance and align with departmental goals.
Financial accountability mechanisms
We created systems to track savings and budget deviations, placing responsibility with the appropriate product owners.
360-degree governance structure
We implemented comprehensive oversight frameworks including:
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XLAs (Experience Level Agreements) - Focusing on end-user experience
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SLAs (Service Level Agreements) - Defining expected performance metrics
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KPIs (Key Performance Indicators) - Measuring specific outcomes
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Structured meeting cadences with clear agendas and expected outcomes
Outcome
The implementation delivered several significant results:
Financial performance
We exceeded client’s savings target by 10% through regular monitoring and accountability
Proactive renewal management
Contracts were renewed an average of 15 days in advance, allowing time for proper term negotiation rather than last-minute renewals with unfavorable terms.
Contract simplification
By creating client’s templates we have created a dataset of coherent contracts, greatly reducing confusion and speeding up conflict resolution.
Improved vendor output
Through KPI monitoring and management, we managed to achieve 10% savings due to the fact that client knew in advance the timeframes they had to negotiated with existing suppliers and pivot in time to new alternative suppliers in those cases.