Question

Part 1: Case study analysis

These questions relate to the case study and should be answered in the context of the information provided.

Case 1:

A midsized biopharmaceutical (ALFA) company with hundreds of employees worldwide recently faced a crossroads. The company was growing rapidly, but its internal contract management process wasn’t equipped to keep up with the demands of a larger company. Because the company relied on paper-based manual processes, it encountered inefficiency across departments. End users submitted paper forms for contract requests, but often experienced confusion about which information was required for different types of agreements. This led to time-consuming back-and-forth with the legal team. Once they submitted their requests, end users lacked visibility into progress. As a result, they frequently made phone calls to check on status, and typically had the false perception that the legal department was causing bottlenecks. Meanwhile, the legal team faced efficiency challenges of its own. Attorneys and paralegals spent long hours filling in missing information on contract request forms, and handled all manual workflow themselves. Lacking a single system of record, they were forced to perform redundant data entry into multiple back-end business systems. In addition, the legal department’s interaction with the procurement team was inefficient. Legal’s handoff of completed contracts to Procurement—a critical step for the creation of purchase orders (POs)— remained an uncoordinated process. End users had no way of checking the main clauses of contracts with suppliers and checking the requirements for purchasing items. The company’s general counsel recognized the impact of these problems on the entire legal function. The lack of visibility into the current legal workload made it very difficult to plan (or justify) legal resources —and nearly impossible to generate any meaningful business intelligence about the department’s functions. In addition, ensuring compliance with the organization’s financial policies was extremely difficult, exposing the firm to serious financial risk and decreasing negotiating power with vendors.

AQ(1) What is the problem for ALFA company?

AQ(2) How do you evaluate the company contract management performance?

AQ(3) What are the recommendations that the ALFA company need to follow and apply to improve their contract performance (with examples)?

Answer 1

1. The primary problem with ALFA company is that majority of the process in the company is manual. Automation and digitalization are the need of the hour. ALFA company is not capitalizing on this opportunity and is maintaining obsolete ways in dealing with its core functionality. Moreover because of dependency on manual work, transparency in overall system is missing. These factors affect the overall efficiency and accuracy in the business processes of ALFA company and is increasing the overall TAT of different processes.

2. The company’s contract management performance is quite poor. 21st century is the age of digitalization and technology. Companies are integrating latest technology in their business model so as to strengthen its competitive hold in the market. ALFA company, on the other hand is still depending on manual and paper work to facilitate its contract management process. There is high inefficiency in the process. The follow ups with different teams is quite hectic and time consuming. There is no way to maintain a check on the critical information which must be maintained in the agreements. There is no visibility or tracking process to check the progress of the filled contracts and agreements. The absence of a single system of record requires the attorneys and paralegals to spent hours, looking for data. The overall contract management is being handled quite poorly by the company.

3. The recommendations which would help ALFA company in improving their contract performance are as follows:

· The paperwork must be discarded and a software must be integrated with the business model of the company which will make the contract management digital. The software will have various checks to maintain accuracy in contract filling. Moreover the digital data will be quite easy to fill as standard formats of different types of agreements will be maintained in the software.

· A centralized database must be maintained to keep the data of the company at one place. This centralized database will facilitate data searching and retrieval. The overall speed of contract management will enhance substantially.

· Every department must have defined roles in the contract management process. Standard operating procedures must be shared with each department so that they have a clear understanding of what is required from them. This will decrease rate of follow ups and overall efficiency of contract management process will increase.