Making the most of technology, people and processes for better contract and compliance management.
When projects are at risk from delays and budget blow-outs, the contract should be the constant that brings things back under control. Why, then, is there so much focus on getting the contract right during procurement but limited support following through on milestones, deliverables, and commercial performance measures during execution? Luckily there is a solution available to embed contract and compliance checks into workflows to give all stakeholders enhanced visibility and an early warning system for delays and scope issues that can derail projects.
Todd Whaley – CEO
When contracts become projects
By now, contract lifecycle management is a well-trodden path for many organisations. It’s a process that can ease the administrative burden during procurement, from templating contract requirements to managing vendor compliance with ISO standards. But this support tends to become more rudimentary when contracts transform into projects. This part of the lifecycle is often labelled as the ‘execution’ stage or broken up into ‘obligations management’ and ‘audit and reporting’. But regardless of the labelling, the tools for monitoring how a project is performing against the actual contract aren’t making it easy for Project Management Offices (PMOs) to deliver accurate and timely updates.
Just as other project tasks, resources and milestones used to be tracked using spreadsheets, contract obligations have been managed in much the same way. And as we’ve seen new technology and tools emerge to enhance project management practice and outcomes, the contract component hasn’t been picked up by these Project Management Platform (PPM) solutions. As a result, organisations and their PMOs have struggled to keep project progress in sync with obligations. What we often see as a result – particularly when there’s confusion or uncertainty from clients and vendors around scope and deliverables – is a lot of coffee conversations to settle on a course of action.
If it were simple and easy to reference actual contract requirements instead of relying on anecdotal reports, project leads would have a better grip on whether execution complies with contract obligations. Better still if contract compliance data and metrics could be part of a system that tracks an organisation wide set of compliance deliverables – whether for projects or BAU.
Integrated modules for automated transfer of information and real-time reporting
With the two modules Hummingbird have developed as part of our proprietary approach to PPM, this is exactly what we have set out to achieve. An integrated, automated transfer of performance measures and associated data from contract stage, through each project and billing phase, right through to completion.
The loop starts with the Contract Obligation Management (COM) module, which comprises extracts, obligations and measures of a commercial nature required to be tracked and reported on during delivery. This data can then be used in the PPM services where the COM information is utilised alongside other project deliverables and metrics – internal and external. From here the actions which trigger outcomes – perhaps initiation of another project or task, a contract payment or compliance requirement with quality standards – are picked up within the Compliance Management (CM) module and reported on through specifically created business reports, dashboards and execution workflows.
Once populated with all the contract and compliance data, both the CM and COM modules provide continuous updates to project leads and stakeholders on where they stand with execution of the contract. Any gaps and delays are obvious, and any change requests can be properly recorded and managed through these modules.
All in all, it brings a new level of automation and transparency to contract execution which allows organisations to be proactive when it comes to keeping everyone informed and accountable – internal teams, C-suite and directors, and vendors too. Simple dashboard views give senior leaders a lens for reviewing top line status metrics while internal teams can interrogate their delivery dashboard on the same platform for the details they need to stay on top of vendor and project management.
Empowering organisations and teams to perform
With this visibility and accountability built into workflows, organisations have the opportunity to level up their maturity in project management, and their project capacity too. The strategic advantages of keeping tabs on compliance requirements for critical, complex projects is also a huge win for organisations committed to improving oversight. For a company looking to achieve ISO certification to expand globally or tender for government contracts, there are hundreds, perhaps thousands of goals and tasks to keep track of. With the right system for establishing, monitoring and reporting on enterprise-wide efforts to comply with standards – as a baseline and into the future – organisations can make this strategic move with confidence, knowing they can demonstrate compliance and sustain it over time.
Having the systems to deliver day-to-day performance data to support better project decisions at the strategic level is bound to be a worthwhile investment for future growth. Upgrading skills and processes at the operational level is also important for making the most of an investment in better transparency and data-informed project outcomes.
This is where our Hummingbird Solutions team provide holistic support to clients – enabling them to take full advantage of project management technologies available while guiding the transformation of their people and processes. This simultaneous evolution of their PPM tooling and PMO capability supports a far higher level of accountability and responsiveness, making the whole project management process less frustrating and more rewarding at the team level and more compliant and strategic at the executive and board level.