- Contracts – A Vital Yet Often Overlooked Source for Big Data
-
Thanks to James Misterman, Project Manager/Senior Consultant for contributing this article to InFocus:
Organizations are rightfully moving towards building strategic warehouses and strategies around Big Data. The view into Big Data will provide an analytical link between rear-view mirror spend and tomorrow’s forecast. Unfortunately, a key data element that is often overlooked is the starting point of it all: Contract data. The contracts that produced the growth in market share or procured the services are often not thoroughly tracked and measured to understand their effectiveness or monitored to prevent leakage. Contracts are meticulously drafted, executed, and then stored in a cabinet, with all the valuable data lost.
Establishing a Contract Management framework will round out the completeness of your data being collected and provide a complete picture of the dollar’s lifetime – from procurement to point of sale.
Contract Management endorses the importance of monitoring a contract throughout the entire lifecycle – from initial authoring to eventual expiration, or auto-renewal. As a result, the following examples of strategic information can be derived from data points extracted during the Contract Management process:
- The drafting and negotiation stages can extrapolate key data around the average amount of touch points between internal parties for resource planning, or external parties for lessons learned on robust negotiations.
- The execution stages capture key negotiated metrics around milestones, payment structures, tiers, and risk level.
- And the monitoring stages capture contract events to measure actuals verses projections, future exposure, and key milestones.
As the data is collected and shared across your organization, it can be leveraged to spot leakage. Recently, one client was able to match auto-payments being generated for an expired contract generating significant savings from a single agreement. Visibility into contract data can also reduce duplicate spend. A Contract Management system can enable a more complete due diligence process where details of your contract can be shared across silos, allowing one client to spot multiple active contracts across the organization used to purchase the same set of market share data.
Implementing a Contract Management system solution is an enabler of leveraging Big Data to meet your business objectives.