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Los Angeles: How and When to Create a Crisis

May 30th, 2006 · by Tim Minahan · 3 Comments · best practices, contract management

My stop in Irvine reinforced a little spoken secret to successful supply management transformation initiatives: Whenever possible leverage a crisis to secure budget, resources, and alignment needed to get the job done right.

“Crises” such as Sarbanes Oxley Act (SOX) compliance and patent litigation enabled Qualcomm to drive standardized contracting and contract compliance procedures and systems in what was traditionally a highly decentralized environment. What started as an effort to gain better visibility and control of information technology (IT) contracts in 2002, rapidly advanced to an enterprise-wide adoption of a common contract lifecycle management (CLM) solution and a hybrid, center-led organizational structure. Debbie Adams, Senior Project Manager at Qualcomm says “corporate goals, such as SOX compliance, really helped accelerate and expand our original program into a company-wide initiative.”

Today, more than 600 employees use a common system to manage over 30,000 contracts — from basic supplier product and service contracts to complex customer, partner, and intellectual property agreements. While SOX and litigation helped speed alignment for contract standards and systems, Adams identified the following as critical success factors:

  • Independent project management: Adams and the contract organization were not tied to any one team or IT. Instead, Qualcomm aligned the contract management group and initiative with an influential sponsor: corporate legal. “Having the General Counsel driving this initiative really helped get the businesses in line,” says Adams.
  • Strong relationship and capable software tool: “Ensure that the [CLM] solution provider you select is configurable to your company’s processes and that your solution provider is responsive to your enhancement requests.”    
  • Consensus through Steering Committee: Qualcomm drove and maintained support for the contract management initiative by ensure that all business units and multiple functional groups had input into the program structure and improvements. “We realized that people would be much more likely to support [the program] if they have a voice in it.”
  • Mentor power users: Qualcomm’s contract group trains and advises power users within each business unit to speed responsiveness to stakeholders and alleviate pressure on the primary enterprise administrator. “Internal customer service and support can make or break a program’s success,” says Adams.
  • Centralized oversight with decentralized ownership: Qualcomm’s contracts group and steering committee provide program vision, contracting and process business rules, system management, auditing, and training. They also manage the relationship with the company’s CLM solution provider. Leveraging the visibility and controls of the CLM system, Qualcomm affords business units and functional stakeholders the latitude for decentralized data entry, contract administration and management, unique reporting, contract negotiations, and customer and supplier relationship management. “We put a reliance on internal customers to provide the functional expertise to provide the unique language and terms required to ensure best value agreements that limit risk to the company,” says Adams. My own research has found that this “center-led” structure is becoming more popular, thanks to the visibility and control afforded by improved information management and reporting.
  • Audit and measurement: Qualcomm ensures corporate goals and system adoption through standardized and periodic auditing and measurement. Adams says such standards also help Qualcomm quickly report on overall program performance and benefits.
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3 responses so far ↓

  • 1 Supply Excellence » …And What I Learned From Top Performing Supply Organizations // Jun 27, 2006 at 9:18 am

    [...] Align program goals with corporate objectives (piggyback on a crisis, whenever possible). Ensure sourcing and supply management goals map directly into those of the company. If possible, align your goals with those of the organization. Example: Qualcomm used corporate requirements for Sarbanes-Oxley compliance and IP litigation to secure budget and support for a company-wide contract lifecycle management initiative and solution deployment. [...]

  • 2 Supply Excellence » Top Supply Strategy #5: Getting Organized // Nov 1, 2006 at 6:00 pm

    [...] In my experience, center-led organizations also are more likely to have direct reporting lines into C-level executives and tend to be larger users of supply management automation. Consider Qualcomm, which adopted a center-led approach in conjunction with rolling out its contract management initiative. [...]

  • 3 Supply Excellence » Are You Ready for Lean Contracting? // Dec 19, 2006 at 10:12 am

    [...] You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your ownsite. [...]

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