Oracle

Contracts

Create and Enforce Better Contracts

Ron Nawojczyk (Now-a-check)

Principal Solution Consultant
 Agenda
• Overview of Contract Management
• Contract Setup:
• Define Clauses and Deliverables
• Create Contract Templates
• Define rules for the Contract Expert

• Creating Procurement Contracts

• Contract Repository
• Search capabilities
• Miscellaneous Contracts
 Agenda
• Overview of Contract Management
• Contract Setup:
• Define Clauses and Deliverables
• Create Contract Templates
• Define rules for the Contract Expert

• Creating Procurement Contracts

• Contract Repository
• Search capabilities
• Miscellaneous Contracts
 Centralized Contract Access

Procurement Sales
Contracts Contracts

Contract
Repository

Miscellaneous Service
Contracts Contracts
• Centralized storage for all contracts
• Search for all company contract types
• Monitor status of contracts
Contracts At-a-Glance

Request
Buying Supplier
Organization Organization
Negotiate & Author

Key Functions Approve & Sign Key Functions

Procurement Sales
Legal Legal
Project Mgmt Execute Project Mgt
Finance Billing
Top Mgmt Top Mgmt
Close-Out Renew
 Oracle Procurement Contracts
Example Integration Points
Changes to Capitalized
Receiving Asset Depreciation

Accounts iSupplier Accounts Customer

Purchasing Sourcing
Payable Portal Receivable Orders

Service Request
Terms Project / Task,
Linked to
Transactions WO Costs
PO Info WOR / WO
PO Costs
Information Updates

Procurement WO Billing
Supplier WO Updates, Customer
Master Catalogs and Sales Master
Contracts

Oracle EBS Applications Database

Variables: System, User Defined, Table

Contract Management Opportunity
Rapid Payback, Significant ROI

 Contract Spend (vs. off-Contract) 7%

 Contract Creation & Admin Costs 10-30%
 Contract Negotiation Cycle Time 50%
 Volume of Erroneous Payments 75-90%
 Compliance with Regulatory Guidelines 90-100%
Source: Aberdeen; Goldman Sachs, Global Equity Research

“More effective management of procurement contracts

has led Best-in-Class companies to capture 46% more of their negotiated
discounts and rebates…and realize 15% to 20% lower contract creation and
approval cycle times than their competitors”
Procurement Contracts: Real Value, Real Returns
Aberdeen Group, March 31, 2009
Oracle Contracts

Standardize

Streamline

Comply

Complete Contract Lifecycle Management

 Agenda
• Overview of Contract Management
• Contract Setup:
• Define Clauses and Deliverables
• Create Contract Templates
• Define rules for the Contract Expert

• Creating Procurement Contracts

• Contract Repository
• Search capabilities
• Miscellaneous Contracts
 Contract Setup
Define and approve various templates Create a new contract based on a
to be used in generating new contracts: pre-approved template.

Clause Library ContractTemplate

Contract
Contract
Contract Template
Template
Template Contract
• Access to Records 1. Terms and Conditions 1. Terms and Conditions
• Certifications 1. Agreement 1. Agreement
• Controlling Law 2. Payment Terms A 2. Payment Terms A
• Confidentiality 3. Controlling Law 3. Controlling Law
• Freight Terms 4. Confidentiality 4. Confidentiality
• FOB 5. Warranty 5. Warranty
• Damages 2. Delivery of Goods 2. Delivery of Goods
• Inspections 1. Freight Terms 1. Freight Terms
• Insurance Coverage 2. Indemnification 2. Indemnification
• Liability 3. FOB 3. FOB
• Licensing 4. Damages 4. Damages
• Ownership 5. Liability 5. Liability
Inspections
• Payment Terms A 3. Deliverables 3.6.Deliverables
Liability
• Payment Terms B 1. Proof of Insurance 3.1.Deliverables
Proof of Insurance
• Statement of Work 2. References 1. References
2. Proof of Insurance
• … 3. Certification 2. Certification
3. References
• … 3. Certification

Define and approve all clauses

that will be used in contracts:
• catagorize
• add variables
• create alternates
Contract Expert
• define relationships • Question 1 • Rule 1
• create new versions • Question 2 • Rule 2
• Question … • Rule …

Define
Based on the rulesgiven
answers that will be used to
to questions configuretocontracts
presented based
the contract on the system
creator,
the template being used and the circumstances of that contract.
will automatically add appropriate clauses from the clause library to the contract.
 Contract Setup

Clause Library ContractTemplate

Contract
Contract
Contract Template
Template
Template Contract
• Access to Records
• Certifications
• Controlling Law
• Confidentiality
• Freight Terms
• FOB
• Damages
• Inspections
• Insurance Coverage
• Liability
• Licensing
• Ownership
• Payment Terms A
• Payment Terms B
• Statement of Work
• …
• …

Define and approve all clauses

that will be used in contracts:
• categorize
• add variables
• create alternates
Contract Expert
• define relationships
• create new versions
Clause Library
All clauses are stored in a central
library of Contract Terms.
Clause Library
Variables in clauses will be replaced with
data elements during contract authoring.
Clause Library
Protect clauses from changes.
 Contract Setup
Define and approve various templates
to be used in generating new contracts:

Clause Library ContractTemplate

Contract
Contract
Contract Template
Template
Template Contract
1. Terms and Conditions
1. Agreement
2. Payment Terms A
3. Controlling Law
4. Confidentiality
5. Warranty
2. Delivery of Goods
1. Freight Terms
2. Indemnification
3. FOB
4. Damages
5. Liability
3. Deliverables
1. Proof of Insurance
2. References
3. Certification

Contract Expert
Contract Templates
Contract Templates are created
as a starting point for authoring.
Contract Templates

Templates contain clauses

organized into sections.
 Contract Setup

Clause Library ContractTemplate

Contract
Contract
Contract Template
Template
Template Contract

Contract Expert
• Question 1 • Rule 1
• Question 2 • Rule 2
• Question … • Rule …

Define rules that will be used to configure contracts based on

the template being used and the circumstances of that contract.
Contract Templates
Rules can be created to automatically add clauses to
contracts based on a set of guided questions.
Contract Expert
Based on the answers to questions, the Contract Expert
can automatically add clauses to the contract.
Contract Expert

The Contract Expert can also ask additional guided

questions for clarification to add the appropriate clause.
 Contract Setup
Create a new contract based on a
pre-approved template.

Clause Library ContractTemplate

Contract
Contract
Contract Template
Template
Template Contract
1. Terms and Conditions
1. Agreement
2. Payment Terms A
3. Controlling Law
4. Confidentiality
5. Warranty
2. Delivery of Goods
1. Freight Terms
2. Indemnification
3. FOB
4. Damages
5. Inspections
6. Liability
3. Deliverables
1. Proof of Insurance
2. References
3. Certification

Contract Expert

Based on the answers given to questions presented to the contract creator, the system
will automatically add appropriate clauses from the clause library to the contract.
Contract Expert

Apply a template to create the contract.

Contract Expert

Use the Contract Expert to configure the contract.

Contract Expert

Here’s how the Contract Expert questions are

presented during the contract creation.
Contract Expert

The answer to this question may

prompt additional questions.
Contract Expert

These questions are a result

of the Yes response to the
special tooling question.
Contract Expert

You can have those answers

prompt additional questions.
Contract Expert

Once all questions have been answered, the system

will add the appropriate clauses to the contract.
Contract Expert

Here are the additional clauses that will be added to the

contract and the sections to which they will be added.
Contract Expert

The Contract Expert provides the

ability to leverage contract expertise
throughout your organization.
Contract Expert

Alternatively, instead of creating the contract from one of your templates,

you can also use your Supplier or Customer contracts as a starting point
for your negotiations. Simply upload the contract into the system.
 Contract Management – Details

• Define Clauses and Deliverables Setup

• Create Contract Templates Contract
Administrator
• Define rules for the Contract Expert
• Generate contracts:
Authoring
• Procurement Contracts Buyer
• Sales Contracts Sales person
• Service Contracts Service Manager
Contract Manager
• Miscellaneous Contracts

Click on any of the underlined items for more detailed information on that topic.
There is a return link at the end of each section which will return you to this slide.
Click anywhere else on this slide to by-pass the detailed explanations.
 Agenda
• Overview of Contract Management
• Contract Setup:
• Define Clauses and Deliverables
• Create Contract Templates
• Define rules for the Contract Expert

• Creating Procurement Contracts

• Contract Repository
• Search capabilities
• Miscellaneous Contracts
Embedded in Purchasing & Sourcing Documents

• Supported documents include:

• Standard PO
Header
• Blanket Purchase Agreements
Clauses
• Contract Purchase Agreements
Deliverables
• Global Agreement
Lines
Shipments
• RFX, Reverse Auction
Distributions • Secure access from Purchasing,
iSupplier Portal and Sourcing
• Leverage existing and future
sourcing and purchasing
Purchase Orders
functionality
 Complete Contract Lifecycle Management
Procurement View Contract Identify
Submit Request
Manager/ Contract Intelligence Saving
for Contract
Requester Data Opportunities
SourcingYou
Analytics
can identify contract opportunities
through Oracle Analytics.
Complete Contract Lifecycle Management
 Complete Contract Lifecycle Management
Procurement View Contract Identify
Submit Request
Manager/ Contract Intelligence Saving
for Contract
Requester Data Opportunities

Sourcing Create RFX

Qualify Negotiate & Award
Professional Suppliers
with Contract
Evaluate Contract
Terms

Contract Print, Administer

Administrator/ Finalize Execute
Approve, Contract
Contract Terms Contract
Buyer & Sign Changes

Inspect &
Monitor
Authorize
Compliance
Payments
Pre-Approved Contract Clauses
Standardize language, minimize risk

• Rich text formatting

capabilities
• Support for managing
global and country specific
standards
• Revision control and
approval management
 Contract Binding
Contract signing woven into PO process

Review contract details and sign contracts and amendments online through iSupplier Portal
Contract Print and Communication
Professional and consistent, no re-keying

• Automatic substitution of negotiated terms in printed document

• Tailor to company standard formats – logo, headers, layout
• Signature block for contract binding
 Complete Contract Lifecycle Management
Procurement View Contract Identify
Submit Request
Manager/ Contract Intelligence Saving
for Contract
Requester Data Opportunities

Sourcing Create RFX

Qualify Negotiate & Award
Professional Suppliers
with Contract
Evaluate Contract
Terms

Contract Print, Administer

Administrator/ Finalize Execute
Approve, Contract
Contract Terms Contract
Buyer & Sign Changes

Inspect &
Monitor
Authorize
Compliance
Payments

Update
Supplier View T&C’s, Request
Deliverable
Deliverables Changes
Status

Accounts Make
Payable Payments
Contract Deliverables Workbench
Track Milestones For Each
The contract deliverables Contract
workbench provides visibility
of all contractual obligations and responsibilities.

Deliverable
Clearly defined
status at a glance
ownership

Track contractual
responsibilities and key
administrative tasks
 Agenda
• Overview of Contract Management
• Contract Setup:
• Define Clauses and Deliverables
• Create Contract Templates
• Define rules for the Contract Expert

• Creating Procurement Contracts

• Contract Repository
• Search capabilities
• Miscellaneous Contracts
 Centralized Contract Access

Procurement Sales
Contracts Contracts

Contract
Repository

Miscellaneous Service
Contracts Contracts
• Centralized storage for all contracts
• Search for all company contract types
• Monitor status of contracts
Contract Repository
Contract Repository
You can search for any contract in the repository using
various key fields – the search criteria will change
depending on the type of document .
Here we are searching for all Purchase type documents.
Contract Repository

This is a search through all order management documents.

Contract Repository
Searching for a specific type of document
provides additional search criteria.
Contract Repository
 You can also do full text searches through all enterprise
contracts. Here the system shows all contracts that contain
Contract Repository
the work “trial” anywhere within the contract.
Contract Repository
Contract Repository

You can also search clauses by keyword and

see which contracts contain specific clauses.
Contract Repository

Results can be summarized by clause,

type or version
Contract Management Opportunity
Rapid Payback, Significant ROI

Contract Spend (vs. off-Contract) 7%

Contract Creation & Admin Costs 10-30%
Contract Negotiation Cycle Time 50%
Volume of Erroneous Payments 75-90%
Compliance with Regulatory Guidelines 90-100%

Source: Aberdeen; Goldman Sachs, Global Equity Research

“Automating purchasing contracts delivers

significant ROI. Companies are implementing targeted projects in two to
three months that deliver between 150% to 200% payback within a year.”
-- Compelling ROI of Contract Management, 2003 Research
New in R12

• Professional buyer's work center

• Microsoft Word synchronization
• Contract policy standards and deviations
• Clause usage analysis
• Complex contract payments
• Multi-organization access control
• Enhanced support for contract template
translation
• Support RTF layout templates for printing
• Import clauses using XML interface
 Oracle Procurement Contracts
Example Integration Points
Changes to Capitalized
Receiving Asset Depreciation

Accounts iSupplier Accounts Customer

Purchasing Sourcing
Payable Portal Payable Orders

Service Request
Terms Project / Task,
Linked to
Transactions WO Costs
PO Info WOR / WO
PO Costs
Information Updates

Procurement WO Billing
Supplier WO Updates, Customer
Master Catalogs and Sales Master
Contracts

Oracle EBS Applications Database

Variables: Deliverable, System, User Defined,, Table

Benefits of Oracle Contract Management

• Organization-wide contract search

• Online negotiation of contract terms with suppliers
• Support alternate and incompatible clause
• Support for Microsoft © Word and Adobe © PDF
• Contract Expert
• Role based access to authoring capabilities
• Contract clause deviations
• Configurable workflow hierarchy
• Electronic signatures (FDA 21 CFR Part 11 compliant)
• Detailed online revision history
• Identify contract authored by suppliers
• Integrated buy-side execution and financial data validation
• Miscellaneous contract creation