Project case study: INVERTO wins over Tchibo with its e-contor
computerised contract management tool for indirect sourcing
Buyers work hard to negotiate the best possible price and quality with suppliers but simply throw away any chance of long-term sourcing success by failing to maintain an overview of deadlines, bonus arrangements and pooling effects for the company as a whole due to inadequate contract management.
Growing demands regarding company compliance, documentation and risk management also necessitate a standardised approach to contracts.
Even Tchibo‘s indirect sourcing staff now have online access to supplier contracts, for transparent, automated contract handling. This makes one of Germany‘s largest international consumer goods and retail companies a pioneer of structured contract management in the field of procurement. In tandem with sourcing consultancy INVERTO, Tchibo has reorganised and automated its contract management processes.
Following a pilot phase and rollout at the company, the system has proved a success in practice. Given the large number of legal and company regulations, transparency is a must if the sheer volume of contracts throughout the company is not to result in unintentional legal infringements with expensive consequences. To counter these risks while also safeguarding sourcing results in the long term, it is essential to have a computerised, structured contract management process in place. This needs to involve much more than document administration.
All too often in sourcing, contract management is not automated or standardised across departments and there is no uniform IT system.
Customisable management, analytical and reporting tools are one of the key elements of such a system. “The software must be flexible to meet the various requirements of the company. Only then is it actually used,” explains Marcus Toussaint, Head of Contract Management, Controlling & IT in Tchibo‘s sourcing department. “That applies both to the content and to the technical framework of an existing IT infrastructure,” he adds.