In his first article of a two-part feature, GovCon Expert Mick Fox provided an informative guide into the contract lifecycle management of contract professionals in the federal landscape today while also breaking down the debate for all-in-one versus best-in-class solutions.
After you’ve had the chance to read the first GovCon Expert article from Mick Fox, visit GovCon Wire Events to hear his insights on the key trends impacting the government contractors and how to mature the capture process to improve win rate during the platform’s A Blueprint for a Modern, Data-Driven Approach to Capture Management webinar from Aug. 4th.
Check out last week’s A Blueprint for a Modern, Data-Driven Approach to Capture Management Webinar by visiting GovCon Wire Events’ Archive.
You can read Mick Fox’s latest GovCon Expert article below:
A Contracts Professional’s Guide to the All-in-One vs. Best-in-Class Debate – Part 1
By Technomile COO Mick Fox
As a contracts professional working for an Aerospace & Defense company, your job is already hard. There are few industries as regulated as the US federal government contracting world. In addition, a massive change is occurring right before our eyes. Not only are contracting professionals retiring at a faster pace than the broader industry, but the tools available to execute your mission are expanding exponentially – and deciding which technology to employ isn’t easy or straightforward.
One search on the internet proves this immediately. Search “contract lifecycle management” or “CLM,” the terms most used to describe the software used by contracts professionals. You’ll instantly find dozens of options. Look again. None of them do the job that a company contracting with the government needs them to do. Even research firms don’t discriminate between commercial CLM applications and those capable of handling the very specific requirements of government contractors.
Beyond this first challenge, and the main topic of this article, is the fact that there are two key categories of CLM software: “all-in-one” solutions and “best-in-class” solutions. All-in-one solutions are typically either extensions of ERP systems or generalized platforms. Best-in-class solutions are those systems specifically built and continuously developed with one purpose in mind – in this case, contract management. But which is a better fit for government contractors? With pros and cons on both sides of the debate, it is appropriate to dig deeper.
Most software-focused articles apply the lens of the CIO or IT department and the “-ilities” of a system (scalability, maintainability, upgradeability, mobility, etc.). These are important and will be addressed. However, my two-part article is going to focus on you and your job responsibilities as the rubric through which we’ll compare these two categories. In Part 1, we’ll focus on your contract administration and compliance management responsibilities and how well all-in-one versus best-in-class solutions stack up. In my follow-up article, we’ll tackle agreement management and risk management to round out our analysis. Let’s dive in!
While you were hired for your government contracting knowledge and expertise, contract administrators tell us they spend too much of their time doing administration work. In a recent survey, contract administrators stated they spent 6 to 18 hours per week simply keeping their system(s) current. Administration is defined as creating contracts in a system, modifying contracts, and ensuring the associated data in all related systems is synchronized. How does implementing an all-in-one versus best-in-class CLM solution compare in terms of ability to streamline mundane tasks and shift more of your focus to serving as a contracts risk and compliance advisor to your business?
All-in-one solutions have an advantage in that they are most likely being used for other purposes within your company, making the user interface and navigation familiar and minimizing initial training needs. A best-in-class solution would introduce a new user interface, necessitating some training. However, we have found that since these solutions are specifically built for contract managers, it is intuitive where data goes and where buttons exist. Training is required, but it has been found to be very minimal.
The real plus in this category for best-in-class solutions is when machine learning is introduced to streamline the initial ingestion and set up of contracts. All-in-one solutions will most likely have some sort of machine learning; however, due to the fact it is generalized for many uses, it must be configured, customized, and then trained to support contracts, and, if anything changes, must be trained again. Best-in-class CLM solutions have algorithms already built in for contracts and some, if not all, of the training has already been accomplished. This alone has introduced efficiencies in contract administration of 20 to 40 percent, giving you back 1.5 to 7.5 hours per week.
Lastly, there’s the need to keep contract-related data synchronized between systems. If the all-in-one solution is also used for other purposes, such as an ERP or HRIS, the effort to integrate data streams is minimized. This is countered by best-in-class solutions that are more API-based (application programming interface). This means that data input/output has a prebuilt interface that allows for real-time data exchange between systems. In addition, most companies now have invested in ETL systems (extract transform load) to facilitate integrations. If your company already has an ETL tool, the bonus for all-in-one solutions with regard to built-in integrations is almost eliminated.
Therefore, on the topic of contract administration, the all-in-one solution has a slight advantage if you already use the system and your company doesn’t have a data architecture that includes a methodology for sharing data. However, the best-in-class solution ultimately scores higher if you are willing to commit a few hours per person for training on the new interface and your CIO embraces APIs as an approved method of data exchange.
Compliance management is the process of being aware of, and responding to, the rules and regulations governing your business. For companies that do business with the government, this is the discriminating business process that separates our industry from any other. This is also where the delta between all-in-one and best-in-class solutions is the greatest, and where commercial CLM solutions are severely outmatched by government contracting-focused CLM solutions.
All-in-one solutions will have an architecture that allows you to key in FAR, DFARS, and other agency-specific clauses. Nothing is automated – it will just be a repository to store the data. Commercial CLM solutions focus on company-generated rules and regulations, not those imposed upon you by the government. They do offer slightly more data structure, but expect significant upfront and maintenance investment to keep the clauses current. Best-in-class solutions, specifically government contracting-focused solutions, have the relevant clause libraries already built in, as well as a mechanism to keep them up to date.
However, storing of clauses is only half the battle when it comes to compliance management. The workflow based on the clause(s) is what ultimately must be assessed. The more advanced all-in-one solutions do have process builders, most often referred to as business process management, BPM. While these are considered “low code or no code” (be wary of this claim in that it only applies to simple business workflows – if your company has any complexity to its delegation of authority matrix, you will be required to program), the workflows must still be built and then maintained. Best-in-class solutions will also have the ability to create process flows with low code or no code, however government contracting-focused CLM solutions will have many, if not most, of the critical workflows already built.
Ultimately, the existence of pre-built clause libraries and workflows gives best-in-class solutions a sizable advantage in terms of time to deliver and time to value. Typically, best-in-class solutions also have a lower total cost of ownership since maintenance of the clause library and many of the workflows are part of the software cost and not additional implementor costs.
The Debate Continues
At this point in our analysis, the jury is still out regarding all-in-one versus best-in-class solutions and which may offer the best overall value and fit for federal contractors. In Part 2 of this article, we’ll complete our review with a closer look at how these technologies support your agreement and risk management responsibilities, plus formulate a final verdict in the all-in-one versus best-in-class CLM solutions debate.