MMC Corp: Digitalizing Contracts to Reduce Value Losses - Essay Sample

Abstract

The IT manager of MMC Corporation has noted that contracting is one of the activities that have been run unsuccessfully in the company, which have resulted in a 30% loss of the value of deals. The IT Manager recognizes a contracting intelligent platform project can provide a solution for the situation by digitalizing contracts and enabling faster, secure, and reliable services. The proposed iUnderstand application involves a combination of processes, teams, and technology that allows deal improvement, compliance, finance, corporate legal, sales, and operational departments to have regulation over the data in their business contracts. Application advances contracts management from a document-centric approach to a data-centric approach. This proposal presents a prospective improvement using iUnderstand Contracts Intelligence Platform, which could help MMC Corporation to overcome several encounters in contracting while increasing the company's productivity. The resources required for the development of the project are an approximate of 320 hours, data charges, employee's effort, company's computers, and extra electric power charges. The time is evenly distributed on the three phases of the project, planning, and design, development, and documentation. The stakeholders of the project are the sales, operations, finance, pricing, corporate legal, compliance, and deal development departments. The proposed outcomes of the project shall be evaluated using the Ops Model of the future forecast, interviews, and the use of weekly reports. The information highlighted above shall be discussed in five detailed subtopics; that is, need analysis, cost analyses, risk assessment, project plan, and project management plan. This is to ensure that the proposal explains all the inputs to the project and the expected outcomes.

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Proposal Title

MMC Corporation on Understand Contracts Intelligence

Previous studies on contracting have found that many companies use contract management applications. However, a smaller number of businesses, especially those with numerous scopes of routinized deals, use more innovative software with Artificial Intelligence abilities. Contracting is one of the activities that have been done ineffectively by many companies. It has been found that ineffective contracting results in a loss of about 30% of the value on a particular deal due to the losses incurred due to delays of delivery and cancellation of tenders. Companies that fail to utilize artificial intelligence platforms are unable to keep track of the database of all the transactions in the business. This is because the platforms used in contracting lack uniformity and are problematic to organize, manage, and update. Lack of proper methods of previous outsourcing agreements has led to a lack of appropriate contracts management, leading to loss of deal value for the company's contracts. Contracts are an indispensable part of a successful business. Most companies use formal written contracts for most agreements. Therefore, it is necessary to manage contracts efficiently throughout the lifecycle of a business. The IT Manager recognizes a contracting intelligent platform project that can provide a solution in contracting through digitalization, which enables faster, secure, and reliable services. The proposed iUnderstand application involves a combination of processes, teams, and technology that allows deal development, compliance, finance, corporate legal, sales, and operational departments to have regulation over the data in their business contracts.

Due to lack of a platform that improves management of contracts in MMC Corporation, the IT manager proposes the development of a Contracting Intelligence Platform that shall enable all the departments in the company gain control over contracting process. The proposed iUnderstand Contracting Intelligence Platform is designed to address the benefits of the new Contract Management SaaS Cloud solution that addresses the current business concerns, recommendations, and justification of contract compliance. The time proposed for the project is 320 hours, which shall be allocated among the three phases of the project; 80hrs for planning and design, 160hrs for the development phase, and 80hrs for documentation phase. The stakeholders of the project are sales, executives, operations, finance, pricing, corporate legal, compliance, and deal development departments. iUnderstand is an enterprise-class cloud-based technology application that has world-class safeguards for security, reliability, and termination due to losses resulting from impoverished dealing schemes. The outcomes of the project shall be evaluated using the Ops Model of the future forecast, interviews, and the use of weekly reports. The results obtained from the investigation methodologies used shall be analyzed used to determine the effectiveness of the platform in improving contracting and the overall dealing process. The paper discusses iUnderstand Contracting Intelligence Platform project by elaborating need analysis, cost analysis, risk assessment, project management plan, and project plan.

Needs Analysis

Contracting is one of the activities that have been done ineffectively by many companies. It has been found that ineffective contracting results in a loss of about 30% of the value on a particular deal due to the losses incurred due to delays of delivery and cancellation of tenders. MMC Corporation's IT Manager suggests that development of a project that enables all the units in the business to gain control over all business information is an ultimate step to improving the value of dealing, and the overall income of the company. Detailed information is on the problem facing the company and the proposed solution is discussed under the following subtopics:

Problem and Causes

The main challenge faced by companies is infectivity in boosting contract visibility. Various studies suggest that the challenge is caused by the inability to manage pricing agreement, control solution flexibility, drive user adoption, drive compliance, and manage risks, and that compresses the deal cycle. A deal may lose value due to high pricing, too many competitors in the game, failure of the product to meet the demands of the customer, lack of a relationship, inadequate deal information, and lack of competences on the seller's side. Contracts are of great benefit in a company. However, companies focus on contracting at the front end of the negotiation. After that, most arrangements are not looked at until time for the next renewal. This is one of the most common mistakes done in MMC Corporation. Research shows that lack of proper contract development and management can cost the firm up to 9% of the total income annually (Cummins, 2012). Studies indicate that businesses are struggling to maintain the stakeholder returns and profitability in harsh economic times due to the failure in the development and management of contracts. Therefore, the most valuable boost is contract management, which has been the most neglected discipline. A deal can leak its value due to a lack of an ongoing diligence contract. The leakage can be directly or indirectly financial. Direct leakages are such as out of date pricing, while indirect financial leakages are such as misunderstandings that may lead to a failure of a relationship which might lead to late or unsatisfactory deliveries.

The most common areas of weaknesses in contract management that may lead to leakage of deal value include disagreement over deal scope, fault in contract change management, failure of performance due to over-commitment, and inappropriate contract structures. In contracts that outflow income, the losses manifest themselves in various ways. They can be either related and influence each other, which can lead to substantial losses such as failure to grow the contract through innovation and additional business or can cause non-renewal of contracts. Project delays and cost overruns signify a frequent source of loss. Moreover, failures and delays from contract cancellation show similar losses of revenue. These losses are mostly due to non-technical causes. Therefore, digitalization of contracting is one of the most worthwhile projects that can increase business revenue since it improves the management of contracts, which reduces leakage of revenues.

There is a need to improve the customer-supplier relationship and salesmanship to improve contracting. An association is most stimulated by conversation. Thus, the lack of communication between the company and the contractors lessens the ability of growth of a relationship, which reduces trust between the participants (David, 2017). MMC Corporation should implement communication strategies to evaluate the value of services and products using data-supported conversations with customers. In due course, contracting is all about performance. Contracting relationships are formed to improve deal results. Organizations claim savings, revenues, or capabilities based upon contracts. Nevertheless, most commitments fail to deliver expectations. This underperformance causes a potential impact on 9% of the total annual income, which has attracted increased management attention.

Few main steps should be followed to minimize the risk of loss of revenue due to poor contracting management. First, both parties involved should have a stable contractual position. This bank heavily on the willingness of both parties to build alignment that supports performance. The quality of communication and recognition that the presently changing environment creates inescapable uncertainties and a need for flexibility is the key to this essential step. Establishments must become more creative in the use of external standard and performance data to improve th...