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Interview with The Leadership Companies

Drafting contracts can be a monumental task for any purchasing professional. The Leadership Companies is a long term supplier of tools to automate the process.

Interview with The Leadership Companies

Forward: The Leadership Companies, Inc., is an established supplier of contract creation and management software. The firm's flagship product, ContractWare® 8.0, enables purchasers to construct a wide range of legally sound documents from basic capital equipment purchase agreements to source code escrow contracts. Check out the Acton, Massachusetts company at www.leadershipworldwide.com. Debbie interviewed Linda Keckler, Director of Customer Relations.

Debbie: Please briefly describe ContractWare® 8.0.
Linda: ContractWare® 8.0 is an enterprise-wide application for creating contracts with just a few keystrokes. Users can take advantage of the professionally written, legally reviewed sections, clauses, and supporting documents in the system, or they can write their own. ContractWare® allows users to archive and retrieve their contracts quickly, so they can devote their time and effort to more important tasks.

Debbie: What are the primary features of ContractWare®?
Linda: There are quite a few. It enables you to establish agreements quickly and easily. It is intuitive and eliminates repetitive typing and data entry. There are standard, alternate, and optional clauses for each agreement that are readily available at the touch of a key. It explains the intent of each agreement, each section, each clause, and its unique characteristics. ContractWare® assigns and lists agreement numbers, using a pre-determined numbering sequence. It gives you look-up and search capabilities to locate contracts, sections, and clauses, and provides user-friendly search and reports features to track contracts and their associated key data.

Debbie: The system offers a layman’s explanations of all the different phrases?
Linda: Yes. Depending upon where you are in the process, it’s called different things. Commentary and explanations at the contract level are called 'Leadership Guidance'. 'Leadership Advice' is for sections, and “Leadership Practice” is for each individual clause.

Debbie: I see. ContractWare® provides three levels of advice in terms of detail.
Linda: That's exactly right. ContractWare® highlights the risks and issues that require your special attention. There may be some clauses that your company wants you to manage more closely than others, and ContractWare® allows you to highlight those particular sections.

Debbie: Can users customize ContractWare® templates?
Linda: Yes. You cannot change the templates, unless you are the administrator of the application using the Librarian module, because we want to offer users a consistent contract baseline. For example, you might change our template to establish Massachusetts as the default governing law for all your agreements.

Debbie: You said earlier that your phrases and contracts have been reviewed from both a legal and a business standpoint. Do you have a lawyer on staff?
Linda: Yes, we have the appropriate legal and business expertise. It is critical to have both a legal and business review of all contracts since neither one can be effective alone. Our staff has more than 40 years of combined purchasing experience. The founders wrote procurement contracts for a living prior to starting this company. They created the contracts for ContractWare®, and then our attorney reviewed and edited them for compliance to laws and regulations.

Debbie: Do you ever go back and update these clauses, based on changes in the laws?
Linda: Yes. As the Universal Commercial Code (UCC) changes, we update our text. In addition, we make adjustments as business practices and supplier/customer relationships evolve. There aren’t any sections or clauses in ContractWare® that are specific to state law. We wrote the templates to be generic enough, so that you don't have to worry whether this section is okay in Kentucky, but not in California.

Debbie: Can suppliers view the contracts in your system?
Linda: Not unless you have given them read-only access to your Internet site, which is unlikely. We suggest that you email the agreements to the supplier as a Microsoft® Word document.

Debbie: Does ContractWare® support online contract negotiation?
Linda: ContractWare® has that functionality, as well as a supplier directory, and a quotation module.

Debbie: Does ContractWare® provide an audit trail of negotiations and requests for quote?
Linda: Yes.

Debbie: Why did you think it was important to add a web interface to ContractWare®?
Linda: We felt it was needed to reduce customer costs, ease accessibility, and scale back the need for IS support. Most companies tell us that their biggest challenge is reducing their internal demand for manpower for development, implementation, and ongoing support. With ContractWare®, users have the ability to immediately use the application from our website. Each company pays a monthly subscription fee for an unlimited number of users, after which we issue them a name and a password, and provide whatever administrator training they need.

Debbie: When you use the term 'contract', do you mean something as simple as a volume price agreement, or do you also include complex documents that cover issues such as force majeure and non-disclosure?
Linda: We mean both. Generally, companies need our service and experience for more complex documents that are legally enforceable, but the application is flexible enough to manage pricing arrangements and other types of documents besides contracts.

Debbie: Can you tell me briefly about the quote functionality in ContractWare®?
Linda: Sure. ContractWare® enables you to create quotes online, list the selection criteria, and store the responses. When you evaluate the bids and select your supplier, you can download quote details such as part numbers and pricing into a ContractWare® contract.

Debbie: Where does the supplier contact information in the ContractWare® supplier directory come from? Can you download that information from other systems, as opposed to retyping it?
Linda: Yes. It depends on what type of system your supplier contact file is in.

Debbie: Please tell me about the optional contract clauses that ContractWare® offers.
Linda: It has standard, alternate, and optional clauses, so the user has a choice of language for their contract. The standard clauses are generic, widely accepted clauses. We have a full library of alternate clauses that can work just as well, and optional clauses for unique situations. For example, indemnification, the act of securing a company or person against liability, sometimes calls for optional clauses.

Debbie: How are your current customers using your system today?
Linda: They're using ContractWare® to establish consistency in their contracts. Without contract management software, the various people negotiating contracts are likely to use different language. Our customers also use ContractWare® so that contracts aren't lost or scattered. It's very useful to have your contracts stored in one place versus in everybody's top drawer or file cabinet. ContractWare® enables users to improve both the speed and quality of contract development. Internal business partners appreciate the improved working relationships this enables.

Debbie: Do your customers’ legal departments like ContractWare®?
Linda: Yes, they do, because it significantly reduces the amount of time they have to spend reviewing contracts. They typically review our templates, recommend alterations to suit their particular situation, and then instruct the procurement people to come back for further review only when they make major changes. The legal department tends to be the biggest sponsor of our application because it enforces good business practices, and the consistency that they prefer.

Debbie: In what situations are buyers using formal contracts today?
Linda: They tend to use them for agreements that involve risk, serve multiple locations, or establish volume price agreements. Our customers also use contracts to document their cost reduction programs and/or demonstrate their commitment to long-term, strategic relationships.

Debbie: Who are some of your major ContractWare® customers?
Linda: The City of Chicago, The National Association of Purchasing Management, and Microsoft® are a few of our customers. We've been selling aspects and modules of ContractWare® for seven years, and have more than 700 customers at this time.

Debbie: Could you share a brief history of The Leadership Companies?
Linda: Several purchasing professionals from a number of Fortune 500 companies formed this company in 1993 to provide best-in-class products and services for supply management. They saw a need for attention and focus on the processes that influence and manage 40-60% of most companies' revenue. We have a portfolio of products and services, including web-centric business-to-business software. We also offer assessments, training, and best-in-class workbooks and guides for supply chain management.

Debbie: Any last words?
Linda: We encourage people to visit www.leadershipworldwide.com to demo ContractWare® 8.0 Enterprise Edition.

The Leadership Companies, Inc is a leading provider of Solutions for Purchasing and Supply Management. For more information, contact The Leadership Companies, Inc. 42 Davis Road, Acton, MA 01720, telephone 978-264-2900, fax 978-264-2912.

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