THINK contracts and the thought of administrative nightmares and tedious and boring paperwork probably fill your mind with frustration and other negative connotations.

1. Old railway company on track with new
technology
Gregg Barrett
THINK contracts and the thought of administrative nightmares and tedious and boring
paperwork probably fill your mind with frustration and other negative connotations.
Well, it’s best you change those thoughts. In the words of Tim Cummins, chief executive of
International Association for Contract and Commercial Management: “Organisations that
don’t manage their contracts effectively will be at a tremendous competitive disadvantage.”
Transitioning contract management from the traditional “negative” mindset and approach to
the strategic “value-add” activity that it is, is a paradigm shift and takes a bit of work – but it
need not result in panic.
Take Burlington Northern and Santa Fé Railway Company (BNSF) as an example. It operates
one of the largest, oldest and most established rail networks in North America.
So you would think a company like this will be slow-moving when it comes to adopting new
and emerging technology, right?
Wrong! BNSF was an early adopter of “contract lifecycle management” (CLM) software and
implemented it in two months to help streamline its manual processes.
In an industry known to have a very tight operating margin, BNSF has a history of being
innovative and leveraging technology to reduce expenses and improve customer, supplier and
employee relations. The company looks at every opportunity to reduce expenses which
increases profits and value to the shareholders. Before getting budget approval to proceed on
spending real money to acquire and implement an automated CLM solution, you can bet that
a solid business case demonstrating savings had to be submitted and scrutinised by
stakeholders.
Information technology (IT) projects have a reputation of over-promising and over-
committing and delivering much less than expected. IT projects are also typically late and
cost more than the planned budget.
Sounds familiar? Not at BNSF. The business case was scrutinised in detail to ensure that a
realistic timeline, cost and expected benefits were presented to the executives.
A few of the expected benefits of addressing an automated CLM solution were to:
- Streamline operations and reduce manual processes
- Automate the contract request process
- Reduce clerical staff requirements

2. - Provide better response and visibility to stakeholders
- Monitor and manage compliance and performance
- Regulate templates and standardisation
- Stay in an overall supply chain management strategy
- Integrate with finance to ensure accurate payments
- Improve audit controls and compliance
As American teacher and writer Amos Bronson Alcott said: “That is a good book which is
opened with expectation and closed with delight and profit.”
In any undertaking, setting the right expectations upfront and ensuring that all stakeholders
understand them is crucial to the success and adoption of the project.
The project team worked with various stakeholders to document the anticipated benefits and
see what the future would look like during and after the system was rolled out (eg. new roles
and responsibilities of stakeholders, scope of the project, specific milestones, overall timeline
and future phases).
Various “town hall” sessions were held across BNSF to tell stakeholders about the system
and how it would affect them. This fostered a high degree of buy-in from future users of the
system. The project team provided a consistent message that addressed any apprehensions or
questions.
As American industrialist Henry Kaiser said: “Problems are only opportunities in work
clothes.” Challenges are always encountered in projects of this nature – how they are
resolved is what determines success or failure. The experience of the project team at BNSF
helped tremendously to overcome the challenges. Here are a few of the many challenges
BNSF faced.
Paradigm shift
Asking people to adopt automated processes instead of the established and proven manual
processes they had been using for years was a huge challenge. The project team worked with
the stakeholders and demonstrated the ease of use of the new system. They also demonstrated
situations comparing the “old way” with the “new way” that showed the benefits and speed
of the software solution. This allowed users to ease their way into the new system. By
adopting a pilot model for implementation, BNSF helped spread the word about how good
the new system was.
Conversion of current data
A large organisation like BNSF has thousands of contracts and templates/exhibits.

3. The problem is compounded when the data is not stored in an electronic system and exists
primarily in Microsoft Word documents (stored electronically or in filing cabinets). How do
you get all that data into a new automated system?
The CLM solution provider had an approach and process to help with the conversion. The
project team spent a fair number of hours verifying and cleansing the data in the new system.
This helped streamline the process by eliminating useless or redundant data.
Integration to back-end systems
BNSF had several systems operating on different platforms with data that had to be interfaced
with the CLM solution. It had to decide what systems would stay and which
decommissioned. This helped reduce the scope of interfaces required.
The multiple platforms were a challenge and the inflexibilities inherent in the old systems
made the interfacing challenging.
However, the excellent technology available for integration among various platforms made
the task easier.
Customer training
BNSF has a diverse employee base including many users with very limited exposure to
computers or the internet. So training was a huge challenge. How do you deliver a consistent
training programme that addresses simple internet navigation techniques and the use of the
software product for one segment of users while delivering a more complex training
programme for another sector that is familiar with computers?
Trainers with a wide range of skills were deployed to cater to the unique needs of the users. A
knowledgeable helpdesk was established to handle the different queries.
With all the challenges, the dedication and commitment of the project team prevailed as they
implemented the solution on time and within the allotted budget.
A second look at the business case
The implementation was one of the smoothest BNSF had undergone. The project was
delivered on time, on budget and with more functionality than was originally sought.
Some of the end results included a steep reduction in manual processes (from 16 to fewer
than nine), clerical positions were eliminated, contract turnaround time was drastically
reduced (from three weeks to less than 11 days), there was enhanced contract visibility, a
heightened awareness of compliance and performance measures and rapid e-mail notification
of pending renewals and other contract events.
Recognition
BNSF’s efforts paid off and the organisation received a full Return on Investment (ROI) in
62 days. It was also awarded the Best Practices in Contract Management Award by the
Aberdeen Group.

4. ) A full presentation on the contract management effort at BNSF is available at
www.ncmahq.org/files/FileDownloads/PPTs/manthei.ppt