Provider & Contract Management

The need for provider & contract management

Value leakage during contract duration

Having the right partners and contracts is good, but not enough to realize the full potential in IT sourcing. During the contract period, the potential of the contract is often not realized and may even lose value. The term contract value leakage refers to the difference between the potential value of an agreement and the value actually realized. Such leakages may occur when the contract basis is not optimal or during execution due to lack of understanding of the contract content and inability to execute terms. As modern contract constructs, particularly in the IT environment, become more complex and encompass a broader range of end-to-end capabilities, it is important for organizations to establish internal provider and contract management capabilities.

Key drivers for value leakage

  • UNDER-DELIVERY AND OVER-BILLING
    up to 10% invoice / revenue leakage due to under-delivery and over-billing

  • POOR EFFICENCY
    due to highly manual governance, credits tracking, and claims & disputes management

  • INCONSISTENT TRANSPARENCY
    as delivery teams lack clear visibility of contractual obligations leading to poor alignment with clients

  • STRAINED RELATIONSHIPS
    due to delivery issues and lack of transparency creating mistrust in the relationship

Provider Management value leakage

Provider and contract management

Addressing value leakage

The goal of effective provider management is to ensure that outsourced services are delivered at the agreed quality and cost. For this purpose, internal capabilities in the areas of demand, relationship, service portfolio, service level & contract, risk & compliance management and IT financial management must be in place or built up. These capabilities should be supported by appropriate processes and tools.

Value Leakage 1

Requirements for effective provider management

  • People & Skills
    Responsible personnel for provider management with the right competencies in the area of contract, relationship and service management.

  • Toolset
    Integrated tool platform for service integration & management (SIAM) and digital provider management (DPM).

  • Processes
    Processes for the strategic and operational service management & integration (SIAM) and provider management.

Navisco provider management framework

Benefit from our proven framework

Our comprehensive framework for efficient and effective provider management includes reference models in the area of competencies and roles, processes and tools as well as interfaces for service integration & management (SIAM).

Relationship Management

Values & Principles

Skills & Capabilities

Cultural Layer

Digital Provider Management

Service Catalogue

Financial Management

SLA Management

Contract Management

…

Contract Layer

Service Integration & Management (SIAM)

Incident Mgmt.

Service Request Mgmt.

Change Mgmt.

Problem Mgmt.

Release Mgmt.

…

Operational Layer

Kernpunkte

  • Service integration across all layers and all providers

  • Role and responsibility model

  • Automated process workflows

  • Integrated database with standard interfaces and reports

Navisco Digital Provider Management Platform (DPM)

Automating sourcing relationships

Our Digital Provider Management (DPM) solution is a smart, efficient and intuitive tool for managing outsourcing relationships. Unlike traditional contract management systems, DPM is tailored to the specific sourcing requirements and integrates seamlessly with the standard IT management solutions on the market.

DPM functionalities

IT Order to Cash

This process is based on the operational ordering and monitors the monthly delivery of services as well as the financial costs per each IT service product.

Contract Management

This process covers the necessary adjustments of the contract/service catalogue based on changed client requirements, current market developments or changes in the service delivery.

DPM 1

Governance

This process leads to value assurance by enabling governance best practices and by agreeing on workflows with defined roles and responsibilities in one system.

SLA Performance

This process covers the comparison of service quality defined in the agreed SLAs/ KPIs with the quality of the actual services provided per month indicating the differences as well as the financial and contractual consequences.

With DPM you will be able to…

  • know your overall spend and governance health

  • assure deliverable and obligation compliance

  • verify invoice accuracy and spend

  • assess and address service performance

  • administer contract change

  • manage supplier relationships

  • maintain governance artefacts

DPM Benefits

  • Automated measurement of contract fulfillment
  • Automated invoice validation
  • Automated implementation of contract changes

  • Full transparency of service costs and quality across providers
  • Necessary basis for cost allocation
  • Positive impact on relationship with providers

  • Compliant invoices and reduced claims according to contract
  • Not dependent on single people knowledge
  • Integration with other tools via APIs

  • Toolset to increase efficiency of client and provider governance
  • Reduced burden of proof with providers
  • Concentration on innovation and new projects

Navisco AG

We help stopping contract value leakage

  • For 20 years, we have been supporting clients in optimizing their provider and contract management.

  • We continuously transfer our collected best practice back into our reference model.

  • Our Digital Provider Management (DPM) solution helps you automate your workflows and free up your internal resources.

  • With our help, all our clients have significantly minimized their value leakage.