.NET tool keeps track of outsourcing contracts’ fine print

• Solution manages Commonwealth Bank’s outsourced IT systems contracts
• .NET helps save $100,000 per $10 million spent on suppliers
• Companies maintain control of contract lifecycles

Microsoft .NET has delivered a comprehensive browser-based contract management tool and an immediate bottom line result for businesses including the Commonwealth Bank of Australia.

Developed by Microsoft Partner and software systems supplier Open Windows, the Contracts Manager Beyond solution enables clients to better manage their supplier relationships for everything from stationery to maintenance, building, accounting and IT services. Its key benefits include reduced contractual risk and lower costs of contract compliance.

According to Open Windows director, Adam McInnes: “The relationship between procurement and profit is still underestimated in many companies and better management of contracts can make a substantial difference to your bottom line.”

The Commonwealth Bank has implemented the system to manage and administer all its outsourced IT systems and third party contracts. Group procurement is among a number of the Bank’s business units able to benefit from the system.

McInnes says the application’s key benefit for the Commonwealth Bank is its ability to track contractual deliverables. “Reports, audits and reviews all need to be undertaken and measured to determine the performance of the Bank’s contracts.”

Better contract management through the application will yield savings to customers of at least 1 per cent of their procurement/outsourcing budget, according to McInnes. “This represents a saving of $100,000 in the first year to a company with purchasing and outsourced services totalling $10 million. That’s greater than 100 per cent return on the cost of the system in the first 12 months,” he says.

Open Windows deployed .NET technologies VB.NET, ASP.NET, C#, Web Services, Database Connectivity and Security for Contracts Manager Beyond. The application took five developers 12 months to build and requires clients to run Windows 2000 Server or later.

Contracts Manager Beyond manages the complete life cycle of contracts including quoting and tendering, contract award and correspondence, renewal, document tracking as well as contract performance and financial supervision.

McInnes says .NET made a fully browser-based application possible without the need for developers to spend time on a client-server version. In addition, he says: “The ability to create re-usable custom controls and extend existing controls made development faster and more efficient. This has also resulted in easier, ongoing maintenance of the application.”

He says .NET’s inbuilt scalability means the application can be adapted to suit future needs. “We have also developed an updater application that can be sent to clients to update the tool with new versions.”
McInnes explains that many companies are now recognising the efficiencies to be gained through outsourcing. But, he adds: “Their loss of ownership of services has created an increased need for supplier and contract management.”

He believes it is important for companies to positively manage their outsourced contracts in the good times as opposed to only paying attention to them when something goes wrong. “Outsourcing should not mean losing control of the initiation, supervision and renewal of these functions.”

McInnes points out that there are usually deliverables and obligations for both parties to a contract that are defined through provisions such as Service Level Agreements, penalties and rewards. “For example, a lot of people have contracts that are automatically renewed unless notice is given within a certain period. This solution tracks those things and flags them.”

He concludes: “Contract management is about communication and information. Significant improvement can be achieved by proactively managing relationships as well as knowing what suppliers and clients should be delivering under the contract.”