Contract Management

Even if Capgemini’s legal department focuses on centralizing initiatives to avoid duplications, it recognizes that complementary initiatives can yield outstanding results. Beside the CCO initiative, the Group General Counsel initiated a contract management program “on-site” complementing the CCO program.

The program started in a jurisdiction where an internal study was conducted at the end of 2011 to understand the reasons why difficult projects resulted in cash “evaporation”. The study discovered that Capgemini was investing heavily in the contract pre-signing phase and, after signature, contracts were gathering dust. It also identified that the delivery team focused its efforts on the performance of services, often without having a systematic and consistent approach in regards the terms and conditions of the contract itself.

As a result, the local legal department proposed an action plan and, in early 2012, the fondation was established of what is today Capgemini’s strong area of on-site contract management aimed at maximizing the financial return of contracts. Initiated by the local General Counsel, the deployment started with a single person experienced in complex projects and PMOs directly involved in projects, and financed by the legal department. The idea was to start small, demonstrate real tangible value for internal clients and grow as demand developed. It should be emphasized that this economic model demands that a contract manager be assigned to, and be part of the project team.

The strategy also looked for “quick wins” which helped gain credibility among internal stakeholders who then started financing the use of contract management services. These “quick wins” helped raise projects’ profitability through strong management and contract negotiation. As often with process changes, resistance was encountered initially from the delivery teams. However, it was quickly over­come thanks to strong communication, the creation of alliances, and, most

importantly, thanks to quick positive results. Those results included the release of billings and the collection of amounts withheld by the clients, the signature of acceptance certificates by clients, the effective negotiation of change requests and penalties, as well as contract readjustments.

The model proved successful and yielded rapid results. In the first year (2012), the financial benefits amounted to several million euros, fueling the team's growth from 2013 onwards. In addition, the contract management team, having earned the local CFO's trust, started to centralize the process to review, approve, and file the documents presented for bookings in the pilot country. Today contract management is on the business critical path, since no revenue can be booked nor any contract started in that country without the Contract Management's “green light”.

This approach leverages CCO capabilities by assigning an onshore contract manager, working on all projects considered complex or particularly risky, side- by-side with the delivery teams, to improve financial performance. CCO teams are systematically in charge of documents and metadata management for all contracts.

The development of contract management was achieved jointly with delivery by focusing on four pillars: finance, scope, evidence, and risk management. It resulted in internal clients' high satisfaction and demand for more support by Contract Management. In 2014, the local contract management team won the “Profit Shaper” Capgemini Legal Award as well as an external award. This model, combining on-site contract management with CCO capabilities, is currently being deployed in most of the Capgemini Group.

3.3