"As organizations seek to drive greater efficiency and value from their trading relationships, the approach to negotiation is coming under scrutiny. Streamlining and optimizing negotiations continue to be an area generating significant return. In this session, John Fenton, Attorney and Contract Manager Purchasing & Supply Chain Management group at Cincinnati Bell has shared insights into; • An increasing focus on industry and commercial standards. • Strategies for reducing low value negotiations and reducing cycle time • An increased use of technology in the negotiations process "

2. Means to Simplifying Contract Negotiations
- A Practitioner’s View

3. John Fenton
Attorney and Senior Contract Manager
Sourcing Group, Cincinnati Bell

4. Cincinnati Bell
Founded in 1873
Publicly traded on NYSE (CBB)
$1.5 Billion in Revenue (2012)
Traditional landline telephone
business (ILEC, CLEC, long
distance, business services)
Regional wireless carrier (GSM,
3G, 4G HSPA+, but no LTE) (owns
spectrum)
Internet Service Provider (Via DSL
over copper and via Fiber)
Multichannel Video Program
Distributor (small traditional cable
plant, IPTV via Fiber and via DSL)
Completed IPO of CyrusOne
datacenter business in January
2013

6. Agenda
2010 status quo ante
Contracting challenges
How to address challenges
State of work in progress

7. 2010 State of Affairs
 Homegrown static contract database
► Equivalent to an Excel spreadsheet
► Store, search, and retrieve
► No alerts
► Limited, legacy metadata fields
►Poor Visibility
►Poor Compliance

8. 2010 State of Affairs
 Almost no templates
► A poorly accepted NDA
► A general non-professional (usually real estate) services MSA
► An imposing outside-counsel generated 100+-page construction
contract
► Overreliance on supplier contract forms
►No Standardized Terms
►Poor Compliance
►Slow Cycle Time

9. 2010 State of Affairs
 Manually match requisitions and purchase
orders to contracts
►Poor Compliance
 Multiple entities and multiple accounting
systems make determining spend by
supplier a manual process
►Poor Compliance

10. Contracting Challenges
Visibility
Compliance
Challenges
Standardization
Cycle Time

11. Visibility
Challenge 1
Renewals
• Auto renewals
a key issue
Key Contract
Terms
• Termination for
convenience,
payment terms,
risk mitigation
Contract
Ownership
• Who is the
Sourcing
manager?
• Who is the
contract
owner?
Contract
Hierarchies
• SOW’s,
Prime and Sub
Agreements,
Amendments

12. Visibility
How to achieve it
Implement a central
repository to store
and manage your
contract information
Identify key terms
which need to be
tracked for key
contracts
Reports to provide
trend analysis
Ensure all evergreen
contracts are
reviewed with
business owners
and identify
opportunities for renegotiation
Auto renewal reports
and contract
expiration alerts to
prepare for sourcing
projects

13. Compliance
Challenge 2
Contract
execution
Purchase price
compliance
• How do make
sure that we get
fully executed
contracts back?
• How do we
know they are
what we
negotiated?
• How to we
ensure that we
get the pricing
we negotiated
for?
Control Maverick
Spend
• How do we
ensure that
people buy
from these
contracts?
Visibility of
existing contracts
• How do we
ensure that
people are
aware of
existing
contracts for
products and
services?

14. Compliance
How to achieve it
Match established contracts
with actual spend
transactions to identify non
approved vendors.
Ensure that you track
utilization of the contract.
Increased visibility of
contracts with integration
with your ERP system
• PO should refer to a contract
to get pricing
Match purchase information
with contract to identify
purchase price compliance
as well as rebates.

15. Standardization
Challenge 3
Different categories need
different templates
Most of spend is services
and we don’t have
standard templates
• Supplies, Widgets,
Network equipment
• Professional Services
• Software
Development and
Licensing
• Video Programming
• Professional Service
Agreements
• Software
Development and
Licensing Agreements
• Affiliation Agreements
(Video programming)
We are global (or We are
too small) so can’t
standardize our
templates
• Multi-lingual, multilegal support
• Present your template
first

16. Standardization
How to achieve it
Standardize your terms
and clauses by working
with different
stakeholders.
Present your template
first.
Leverage important
clauses from templates.
Implement a process
which automatically
guides sourcing
managers to the right
template.
Identify services which
are bought repeatedly
and define your own
templates based on
third party boilerplate.
Track what terms are
often negotiated and
change those terms in
the base templates.
Define a clause
hierarchy based on the
different region
requirements.

17. Cycle Time
Challenge 4
Approvals
take too
long
Redline and
negotiation
is a tedious
process.
I don’t know
the
approval
hierarchy
Signatures
and
scanning
executed
documents
takes too
long

18. Cycle Time
How to achieve it
Automate the approval
process though a CLM tool
• Predefined approval
hierarchy based on
category, spend, etc.
Use e-signature to automate
the signature process.
Implement clause-level
approvals
• Don’t send entire contract
for review , define clause
ownership and automate
this process.
Track the efficiency of
contracting process and
make adjustments.

19. Questions?
john.fenton@cinbell.com