One last topic from Spend Management Day in Seattle has been in my queue for a while, and that’s the common theme from several presenters towards processes that empower their employees to work on exceptions to the rule rather than repetitive tasks.

A great example is Expedia, whose contracts department handles a staggering 45,000 active contracts per month from hotels, car rental agencies, tours and airlines around the world. Anyone who’s used Expedia knows they return a massive number of options for each search you conduct - as this search for SFO to Katmandu flights shows. And as Contracts Manager Terry Bernard pointed out, each and every one of those results is backed up by a contract.

To handle that volume, they focus on three things:

1. They urge the use of 81 pre-approved contract templates that cover most typical relationships.
2. Potential vendors sign off on a standard T&Cs contract before moving on to the more difficult step of negotiating rates and inventory. Separating those steps sifts out the tire kickers and speeds up the time line.
3. And finally, 80% of their contracts are signed electronically.

Certainly there are complex agreements that keep the team very busy, but they’re not wasting valuable time haggling each and every point in the agreement, passing it through a lengthy review process and killing trees at the copy machine only to have it disappear in the inter-office mail.

When it comes down to it, it’s really about scalability. If you have someone handling contracts/procurement that can handle “x” number of transactions per month and that’s the level you’re at, everything moves along swimmingly. But when the company ramps up to 100x, it’s not as if the procurement department grows to 100 people, right? Instead the few people in the department must simply raise their productivity by becoming more efficient. So any time they can cut the workload by automating or simplifying repetitive tasks it’s a step in the right direction.

Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.