As some of you may have seen, I recently made the move to join Deloitte Legal in Poland and lead our legal managed services/operate team there along with our UK and Indian colleagues. Today I would like to share some insights on how using a true operate play in the post-award phase of the contract lifecycle can be beneficial to any company – perhaps now more than ever. For many, outsourcing is not always an obvious choice when it comes to contract management and legal operations, but maybe the traditional approach is not always the right one – especially nowadays.
Drawing a parallel to the beginning of my career, when I started at BPO, I would say outsourcing is a must for good performance. Having worked 15 years at BPO, I managed teams that successfully provided operations in various areas, including finance, reinsurance, and claims processing – both the so-called “transactional” work and the less straightforward. Operating areas were different, but the following were common and crucial for high-quality service delivery management – just as they are in the legal and contracts space:
- Predictable outcomes;
- Clear SLAs;
- Consistent reporting and governance;
- Right resources and location mix; and
- Innovative thinking and continuous improvement approach.
If someone does not want these in their contracting processes today, then I am not sure we can help them! But if that predictability and discipline is of interest, then let’s explore the upside of going operate.
Others in our team have written about the business case and economics for operate, but as a lifelong delivery leader, let me give you some tangible examples of how operate helps a company in the post-award contract space.
I worked for many years as a service delivery manager for large-scale outsourcing contracts and always reached out for advice in case of complex contract changes and queries. I was lucky that my organisation recognised that such professional support is required because no one can be an expert in each field, especially now, when regulatory requirements are becoming increasingly complex and strict. You can always pretend to be, but it is usually too late to look for someone with the required expertise if you encounter real issues while managing your contractual obligations. An operate model in this space provides support to the contract owners – whether this is procurement, the business or otherwise – to ensure compliance of your company, supply chain and partners with contractual obligations. This allows the business to focus on what it does best and have the right sort of support. Without this sort of support, contractual compliance often is a “side job”. Honestly, in my role as a service delivery manager, I never felt I had enough time to take proper care of contract management. Core operations and daily issues were always the priority. I bet you face the same challenges, and you would love to have someone who owns and manages all these essential responsibilities for you.
Others on the team have written about the latest and greatest on contract lifecycle management (CLM) technology and all the benefits. But as an operations person who runs Operate here, I can tell you that no matter what technology you have, if it is not used, it will not be very good. And this is very relevant for after the contract is signed. This is the place where all the changes, change orders, challenges (in delivery or otherwise) effect the ability to see the real value from your contracts. Most CLM tools have good functionality to get management information out of the contracts, address changes, add SOWs, track obligations and more. An Operate play provides a team that is focused and incentivised to actually use that fancy new CLM. This team can drive the adoption of the new CLM technology that you have just implemented, but surprisingly no one uses it. It can put structure and consistency in how your contract repository is organised and does not allow for a situation in which you have an operational incident and spend hours finding relevant documentation. This brings transparency and visibility over the contractual landscape of your organisation, as well as an overview of the compliance status and risks exposure within your contracts.
Contracts are a mix of legal, risk, commercial and other obligations and promises. How do you ensure that everyone in your team understands every single piece of contract based on which they operate? If you assume your team understands everything, think how often you felt uncertain with all terms and possible implications of non-compliance when you signed a contract on your own. Why is it fair and safe to assume that your managers and team members who do not have backgrounds that are a mix of legal, commercial, risk and everything else understand these contracts? This is why a team approach – an operate approach – that brings all these skills together is more useful. No one person (or only a few) can be expected to know it all on contracts. But a team can. And a team can support this.
These are my views from a career of living this day in and day out – both as someone who appreciated good contract management support and then as someone who provided it. I can tell you quite honestly that things go better when you’re not alone.