Supply Excellence — Pepsi Takes the On Demand Challenge…

Pepsi Takes the On Demand Challenge…

May 3rd, 2006 · by Tim Minahan · No Comments · contract management, events

One of the best attended sessions at this year’s IACCM Americas Conference was Case Studies in Electronic Contracting: from Bid to Execution. (In my previous role, I was fortunate to serve as chair for contract management automation track at the 2004 IACCM Americas Conference. It’s good to see that interest among attendees remains high for contract management automation, particularly in this era of highly competitive and regulated global competition. However, I was a bit disappointed that IACCM discontinued a dedicated track for contract management automation.)

Panelist Reta McKee from the Business Solutions Group at PepsiCo delivered a controversial presentation on how her company, an early user of commercial contract management automation, recently transitioned from a solution installed behind its firewall to a fully hosted “On Demand” solution. (Side note: On Demand or Software as a Service (SaaS) solutions leverage service-oriented, multi-tenant application architecture and shared services delivery model to support multiple customers from a single platform. Research from Aberdeen, AMR, and TripleTree indicate that this shared infrastructure provides economies of scale that allow rapid, low-cost, and low-risk deployment of supply management solutions and services without the up-front fixed investment to purchase and install software and hardware or the costs and resource burdens required for ongoing support.)

PepsiCo originally installed a commercial contract management solution on site in January 2002 to establish a central and searchable repository for all supply contracts and to improve its ability to monitor and manage compliance. In 2004, PepsiCo added functionality to automate contract collaboration, redlining, and auditing.

McKee said the deployment delivered significant and measurable returns in the form of improved compliance, reduced risk and non-compliant terms, more efficient contracting, and greater productivity. Despite these results, “internal IT resources were more focused on higher priority ERP applications,” said McKee. “Internal IT support [for the contract management solution] was limited and located in multiple facilities.”

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