The decision to replace Union Bank's old homegrown vendor contract management system to better administer some 10,000 separate vendor contracts was "easy," says Cath Whistler, vp and manager of contracts management at the San Francisco-based bank.
That's because the in-house contract tracking system the $79-billion asset bank had been using offered only "basic data capture" with a document storage back-end, and "required IT support for something as simple as changing a drop-down list," she says. The bank knew it needed all the basic features Union's custom system lacked, "like the ability to create business rules for workflow management, sophisticated search capabilities, and end-user configurability of their workspace," Whistler says.
Union Bank was in the process of designing its long-term vendor and contracts governance programs to support numerous updates to regulatory guidance covering risk management of third-party systems. It was clear the bank needed to invest in a new system to track its third-party vendor relationships across the company to comply.
It ended up tapping Selectica's contract lifecycle management (CLM) software because it was configurable and automated to the degrees Union desired for meeting updated regulatory guidance - specifically, those emanating from the Office of the Comptroller of the Currency. Other CLM providers include Ariba, CMA Contiki, Emptoris, iMANY, Nextance, Omniware, OpenText, Oracle, SAP, Symfact, and Upside Software. Selectica is managing about 10,000 third-party vendor contracts that are subject to management overview, which Whistler says is "just a portion of the total contract inventory."
In an April report, Aberdeen Group says that by automating key contract management processes, such as the proposal phase; contract creation and authoring; negotiations; approval workflow; electronic signatures; contract repository; and reporting and analytics, CLM solutions can assist cost reduction for firms within overall sourcing and procurement strategies, especially when contracts were managed manually.
"An automated CLM solution definitely makes sense for a large bank like Union Bank," says Christopher Dwyer, an Aberdeen research analyst. "Contracts, especially in this area, are quite complex and present many risks if not managed or tracked properly."
All pertinent language, whether it emanates from term sheets, price quotes, proposals, contracts or renewals, is digitized and then merged into an electronic form, regardless of original document format. Principals or trading partners can then view and share the merged content, says Jason Stern, president and CEO at Selectica.
Selectica is also partnered with RSA Archer, which offers enterprise governance risk and compliance to monitor vendor relationships tied to specific regulatory requirements. Archer's system compiles risk profiles for suppliers, assigning each contract a risk score, like a credit score, tied to specific regulations. Selectica then ensures language aimed at compliance with specific regulations is uploaded into supplier contracts.
