A Right-Sized Solution to Right-Source High-Volume Contracts

High-volume contracts bogging down your in-house team? A focus on process can help you think flexibly about who does the work, and when.

CHALLENGE

The in-house team at one of the world’s most recognized apparel brands faced a deluge: hundreds of procurement contracts, mostly routine, strained both budget and service levels. Keeping up with contract flow siphoned time and attention away from strategic issues.

RESULTS

Seyfarth Lean Consulting delivered a tech-enabled process model to optimize load balance and resource allocation across a broader mix of service providers. We helped increase efficiency on each transaction by 83% and reduced average cost per transaction by 85%.

OUR APPROACH

The primary focus was to match input to impact: a right-sized, lightweight solution to simplify and automate the routing of work, from the business user originating the contract request, to the right-priced resource chosen from a flexible network of trusted service providers.

PERFORMANCE. We developed assessment frameworks to rank importance and priority of contract types. Risk profiles considered dollar value, anticipated volume, compliance and regulatory implications, and strategic value to the core business. This assessment framework helped establish predetermined sourcing and assignment parameters as well as service level expectations on throughput and cycle time and key performance indicators on cycle time and cost per contract.

PEOPLE. We collaborated with the client to identify a network of providers across existing outside counsel and lower-cost resources including offshore legal process outsourcing.

PROCESS. We redesigned client-side processes to standardize how contract requests are ticketed and routed. The redesigned process helps to operationalize sourcing parameters and minimizes administrative touches from the in-house team.

PLATFORM. A custom-developed, lightweight application on Seyfarth Link automates work routing and provides centralized visibility and reporting to the in-house team. The consolidation of workflow in one platform enables data capture to refine throughput and spend metrics.

INSIGHTS

Start small and learn quickly: Contracts permeate almost every aspect of a company's business. We advise our clients to start incrementally: with smaller, focused projects within one or more defined contract areas so you can learn and adjust before you make larger investments.

Emphasize process and people over technology: Technology buys are big bets. Look for slim, flexible solutions and plan to outgrow your technology while you learn from your process projects.

Understand business impact: No organization has zero risk tolerance. It's critical for the legal function to understand where the risk thresholds are for each of its internal clients. Frameworks can facilitate this discussion. Again, start simple: define just the key characteristics that matter to you and your internal clients.