ContractManagementCOEAbbo1Approach

September20,2017

KedricChamberlin

Director,LegalOpera7onsAbbo:

Kedric.Chamberlin@abbo:.com

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Topics

•  CMS@Abbo:•  CentersofExcellence–KeyConcepts•  Abbo:COEContrac7ngApproach•  Discussion

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WhyaContractManagementSystem(CMS)?•  Riskrelatedtolegalandcompliancerequirements

–  Ensureupdated,keytermsareincludedintemplates,providevisibilitytohighriskagreementsandmilestones

–  Mul7plerepositoriescomplicatecontractretrievalforM&A,Li7ga7onorotherpurposes

•  Riskrelatedtooverpayments,e.g.:–  Manualreviewofcontractsiden7fiedroyaltyoverpayments

•  Sub-op7mizeduseofresources,e.g.:–  Abilitytodiverttac7calworktomorevalue-addstrategicwork

•  Missedsavingsduetochallengeswithiden7fyingandconsolida7ngsuppliers/partners

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Abbo7CMSScope•  Contractrequest•  Create&nego7ate•  Approve&execute

(includinge-signatures)•  Post-execu7oncontract

trackingandcommitments/obliga7onsmanagement

•  Storage&access

DeploymentConsidera=ons•  Typesofagreements–alltypesvs.selected(e.g.,NDAs,MSAs)•  Procurementfocus(buy-side)vs.allbusinessunits(Legal,Sales,

R&D,etc.)•  Enterprise-widevs.regional/divisionalsystems•  Repositoryonlyvs.fullfunc=onCMS•  3rdpartysolu=onvs.integrateworkflow/DMStoolsvs.

customdevelop

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DeploymentApproachesConsidered1)  Repository“storeandaccess”firstphase;fullfunc7onalityin

laterphase,i.e.:Phase1–  Crossfunc7onal–  Searchable(OCR)–  ProvidesinglesourceoftruthPhase2–  Globalpla_orm/templates/workflow–  Automa7cfullcontractlifecycle–  Useforsell-side(inaddi7ontobuy-side)–  OutsourcetoLPOforlowvalueac7vi7es

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DeploymentApproachesConsidered(cont’d)2)  Mul7-phases,e.g.:

–  Phase1–NDA–  Phase2–MSA(ifoneexists,noneedforLegal/Procurementreviewof

SOWsinceitreferstoMSAandallriskiswiththebusiness)–  Directprocurement–  Sell-side(interfaceswithSalesforce.com,wantsalesteamtoonlyworkin

1system(Selec7caisamodulewithinSalesforce.com)

3)  Fullpla_ormandfeaturedeploymentfromthestart,i.e.,“BigBang”

Ourapproach=ACNdivision-wide,mul7-phasebycontracttype

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COE–Abbo1ContractManagement

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PriorityAreas:

•  PilotdeploymenttonewACNdivision(movetootherdivisionsun7lAbbo:-wide)

•  Commercialcontrac7ngprocesses(exceptforcustomersalesagreements)

•  Compliancecontrac7ngprocessesincluding:o  Distributoragreementso  eDistributorDashboardo  HCPpaymentsincludingHCPLookup,FairMarketValue,captracking,

transparencyrepor7ngfunc7onality•  Ap:ussystemintegra7onsto:

o  SJMSAPo  SJMConcurInvoiceo  SJM2DO(eDistributorDashboard)o  Abbo:Ac7veDirectory

CentersofExcellence–ContractManagement

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COE–KeyComponents

COE–KeyComponents

COE–PlaDormApproach

COE–KeyComponents(cont’d)

COE–ContracIngProfile

COEContracIng–IniIalPrioriIes

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ContracIngCOESurveyTOPIC RESPONSE

Overview

• What is the purpose of this contract type?

• Does a template exist? • If so, where is it located?

• What business functional groups use this contract type?

• What languages are needed?

Metrics

• What is the total number of contracts? • How many are active?

• How many of this contract type are generated annually?

• What percent has standard terms (vs. negotiated)?

• What percent of this contract type typically needs negotiation?

• What percent typically requires an attachment(s)?

• What is the typical dollar value range for this contract type?

ContracIngCOESurvey(cont’d)• What is the typical dollar value range for this contract type?

Initiation

• Who typically is the requester?

• How is the contract request initiated (manual vs. system)?

• What are the typical attachments associated with the request?

• Who reviews the request?

• Does request need attorney review? • Paralegal review? • If so, for what?

• Could this type of contract be generated as a self-service contract?

Drafting / Negotiation

• Who drafts the contract (based on the request)?

• Who decides on the template to be used?

• Who reviews the draft?

• Who negotiates contract?

ContracIngCOESurvey(cont’d)• Who negotiates contract?

Review / Approval

• How many approvals are required for this contract type?

• Who needs to approve/sign contract?

• Is there a finance review needed? If so, what level?

• Does this contract type have the ability to be e-signed?

• What are the common exceptions related to this contract type?

Post-Approval / Storage

• Is the fully executed contract stored in 2DO?

• If stored in 2DO, who enters and uploads the final contract into the system?

• What are the access security requirements for this contract type?

• Are there any processing steps after approval? If so, what?

• How long is the contract maintained? • What is a typical renewal period for this type of contract?

ContracIngCOE–ProcessAssessmentProcess

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ContracIngCOE–ProcessAssessmentProcess

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Value-addwork?

ContracIngCOE–ProcessAssessmentProcess

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Notvalueadd

ContracIngCOE–ProcessAssessmentProcess

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Notvalueadd

ContracIngCOE–ProcessAssessmentProcess

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Notvalueadd

ContracIngCOE–ProcessAssessmentProcess

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Notvalueadd

ContracIngCOE–CoreProcessMap

•  UseasstarIngplace,“foundaIonprocess”forallcontracttypes•  Modify,asneededforspecial,non-standardcontracts

•  UseasthecontracIngprocessnon-prioritycontracttypes

COE–KeyComponents(cont’d)

COEOrganizaIonalConsideraIons

KeyGoalsforAbbo1COE

GeTngfromHeretoThere•  FutureStateWorkshops

o  Conductfuturestatecontractprocessworkshopsforeachclusterofcontracttypes(basedoncurrentstateprocess)

o  Defineroles,responsibili7esandskillsetsforeachstepinthefuturestateprocess

o  Iden7fypoten7alchangesneededtocurrentpolicy,templates,ornego7a7onplaybook

o  Drapfuturestateprocesses•  Execu=veStakeholderReview/ProposedCOEReview

o  Reviewproposedfuturestatecontrac7ngprocesseswithcontrac7ngexecu7vestakeholders

o  Review/confirmproposedpolicychangeso  Discuss/confirmstaffinglevelrequirementsbasedonfeedback,newroles/

responsibili7es,processandpolicychangeso  ConfirmproposedCOEcontrac7ngapproach

GeTngfromHeretoThere(cont’d)•  Template/ClauseAnalysis

o  Analyzeexis7ngtemplatesforeachcontracttypetodetermineanyharmoniza7on/op7miza7onopportuni7es,assemblylogic,anddatafieldsneeded

o  WorkwithAbbo:templateownersandotherstakeholderstodetermineclausesappropriateforre-useinmul7pletemplatesandasnego7a7onfallbacks

•  BusinessRequirementsWorkshopso  Conductworkshopstoiden7fyrequirementsforeachcontracttypeincluding:

ü  datafieldsü  securityü  systemrulesü  integra7onsü  no7fica7ons,andü  approvalworkflow/rou7ng

o  Finalizerequirementsandupdatecontrac7ngandCOEprocesses,asrequired

GeTngfromHeretoThere(cont’d)•  Func=onal/TechnicalDesignReviews

o  Completedesignsessionstoconfirmsolu7onop7onsforeachbusinessrequirement

o  Updatecontrac7ngprocesses,asneeded•  StakeholderDayintheLifeofReviews

o  Conduct“DayintheLife”contrac7ngreviewswiththebusinessstakeholderstoconfirmCOEprocessdecisionsandproposedstaffing

DiscussionTopics–ContracIngCOE•  Whohasimplementedanenterprise-wideCMS?•  Isitfocusedonbuy-side,sell-side,orboth?•  Didyouevaluateimplemen7ngaContrac7ngCOE?•  Whatwerethekeypros/consinyourassessment?•  Didyouperformacost-benefitanalysis?•  Whatwerethekeyfactorsimpac7ngyourfinaldecision?•  Howdidyouorganize/stafftheCOE?•  WhatarethekeyfactorsdrivingCOEsuccessinyour

organiza7on?

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