Old railway company on track with new technology

Gregg Barrett THINK contracts and the thought of administrative nightmares and tedious and boring paperwork probably fill your mind with frustration and other negative connotations. Well, its best you change those thoughts. In the words of Tim Cummins, chief executive of International Association for Contract and Commercial Management: Organisations that dont manage their contracts effectively will be at a tremendous competitive disadvantage. Transitioning contract management from the traditional negative mindset and approach to the strategic value-add activity that it is, is a paradigm shift and takes a bit of work but it need not result in panic. Take Burlington Northern and Santa F Railway Company (BNSF) as an example. It operates one of the largest, oldest and most established rail networks in North America. So you would think a company like this will be slow-moving when it comes to adopting new and emerging technology, right? Wrong! BNSF was an early adopter of contract lifecycle management (CLM) software and implemented it in two months to help streamline its manual processes. In an industry known to have a very tight operating margin, BNSF has a history of being innovative and leveraging technology to reduce expenses and improve customer, supplier and employee relations. The company looks at every opportunity to reduce expenses which increases profits and value to the shareholders. Before getting budget approval to proceed on spending real money to acquire and implement an automated CLM solution, you can bet that a solid business case demonstrating savings had to be submitted and scrutinised by stakeholders. Information technology (IT) projects have a reputation of over-promising and overcommitting and delivering much less than expected. IT projects are also typically late and cost more than the planned budget. Sounds familiar? Not at BNSF. The business case was scrutinised in detail to ensure that a realistic timeline, cost and expected benefits were presented to the executives. A few of the expected benefits of addressing an automated CLM solution were to: - Streamline operations and reduce manual processes - Automate the contract request process -Reduce clerical staff requirements

- Provide better response and visibility to stakeholders - Monitor and manage compliance and performance - Regulate templates and standardisation - Stay in an overall supply chain management strategy - Integrate with finance to ensure accurate payments - Improve audit controls and compliance As American teacher and writer Amos Bronson Alcott said: That is a good book which is opened with expectation and closed with delight and profit. In any undertaking, setting the right expectations upfront and ensuring that all stakeholders understand them is crucial to the success and adoption of the project. The project team worked with various stakeholders to document the anticipated benefits and see what the future would look like during and after the system was rolled out (eg. new roles and responsibilities of stakeholders, scope of the project, specific milestones, overall timeline and future phases). Various town hall sessions were held across BNSF to tell stakeholders about the system and how it would affect them. This fostered a high degree of buy-in from future users of the system. The project team provided a consistent message that addressed any apprehensions or questions. As American industrialist Henry Kaiser said: Problems are only opportunities in work clothes. Challenges are always encountered in projects of this nature how they are resolved is what determines success or failure. The experience of the project team at BNSF helped tremendously to overcome the challenges. Here are a few of the many challenges BNSF faced. Paradigm shift Asking people to adopt automated processes instead of the established and proven manual processes they had been using for years was a huge challenge. The project team worked with the stakeholders and demonstrated the ease of use of the new system. They also demonstrated situations comparing the old way with the new way that showed the benefits and speed of the software solution. This allowed users to ease their way into the new system. By adopting a pilot model for implementation, BNSF helped spread the word about how good the new system was. Conversion of current data A large organisation like BNSF has thousands of contracts and templates/exhibits.

The problem is compounded when the data is not stored in an electronic system and exists primarily in Microsoft Word documents (stored electronically or in filing cabinets). How do you get all that data into a new automated system? The CLM solution provider had an approach and process to help with the conversion. The project team spent a fair number of hours verifying and cleansing the data in the new system. This helped streamline the process by eliminating useless or redundant data. Integration to back-end systems BNSF had several systems operating on different platforms with data that had to be interfaced with the CLM solution. It had to decide what systems would stay and which decommissioned. This helped reduce the scope of interfaces required. The multiple platforms were a challenge and the inflexibilities inherent in the old systems made the interfacing challenging. However, the excellent technology available for integration among various platforms made the task easier. Customer training BNSF has a diverse employee base including many users with very limited exposure to computers or the internet. So training was a huge challenge. How do you deliver a consistent training programme that addresses simple internet navigation techniques and the use of the software product for one segment of users while delivering a more complex training programme for another sector that is familiar with computers? Trainers with a wide range of skills were deployed to cater to the unique needs of the users. A knowledgeable helpdesk was established to handle the different queries. With all the challenges, the dedication and commitment of the project team prevailed as they implemented the solution on time and within the allotted budget. A second look at the business case The implementation was one of the smoothest BNSF had undergone. The project was delivered on time, on budget and with more functionality than was originally sought. Some of the end results included a steep reduction in manual processes (from 16 to fewer than nine), clerical positions were eliminated, contract turnaround time was drastically reduced (from three weeks to less than 11 days), there was enhanced contract visibility, a heightened awareness of compliance and performance measures and rapid e-mail notification of pending renewals and other contract events. Recognition BNSFs efforts paid off and the organisation received a full Return on Investment (ROI) in 62 days. It was also awarded the Best Practices in Contract Management Award by the Aberdeen Group.

) A full presentation on the contract management effort at BNSF is available at www.ncmahq.org/files/FileDownloads/PPTs/manthei.ppt