Context:
A major group in the energy sector wanted to transform the way its contracts were managed in the pre-signature phase, in particular in order to speed up drafting and negotiation so that technology projects could get off the ground faster. A target was set for improved contractual efficiency (30% less time spent on the pre-signature phases).
Requirement:
To achieve this, the client needed a contract management consultant first to get to grips with the company culture and existing processes, and then to propose concrete, actionable improvements across every stage of the contract lifecycle up to signature.
Prime Conseil’s involvement
The engagement, which ran over several months, began with a review of the existing situation and an immersion in the contract management tools, methods and processes of a group with complex ramifications. That alone was enough to uncover a number of friction points slowing down the drafting, negotiation and approval of contracts. Among them:
- templates that were often heavy and ill-suited, combined with an organisation short on agility, made it hard to tailor contracts to different business cases
- the sheer number of players involved at each stage of the contract lifecycle, coupled with a lack of individual ownership and accountability, was a driver of inertia
- the lack of granularity in processes (procurement, cyber security, HSE, and so on) according to how critical and how important the contracts were could have a perverse effect on how a large number of stakeholders understood these issues.
Faced with these findings, and with no scope to challenge the company culture or the methods and habits deeply embedded in each department and subsidiary, it took creativity, resilience and a teaching mindset to propose, put in place and roll out new contract management processes. Those processes involved, in particular:
- clarifying the roles and responsibilities of every player in the contractual value chain through a RACI-type matrix, so that everyone knows “who does what” at each stage of the contract lifecycle;
- creating a contract summary sheet template which, at the end of negotiation, records the changes made to the templates and thereby opens the door to making those changes;
- introducing lighter versions of the schedules, applicable in cases that do not call for heavyweight processes;
- introducing a system of variables so that the full set of schedules is not inserted by default when they do not apply (for example, leaving out the schedule on data transfers outside the EU where it is not applicable)
- creating performance indicators to measure the efficiency gains in contract drafting and negotiation, and feeding a monthly report on that basis
Outcome:
Contracting timescales were cut substantially, beating the initial 30% target. At the same time, the various people involved (some of whom had misgivings and were resistant to having change imposed on them), largely welcomed the new processes, which freed up bandwidth for them.