Authoring Contracts

Objective

After completing this lesson, you will be able to describe the contract authoring process within SAP Ariba Contracts.

Contract Creation

Contract workspaces enable the customer’s contract managers to execute a repeatable contract negotiation, execution, and amendment process. Contract workspaces introduce standardization to the process using project templates set up by administrators. Project templates enable the ability to effectively conduct contract management through the lifecycle.

Business Process Overview

The dashboard of SAP Ariba serves as a point of access for significant, actionable, and relevant user content based on role, such as contract activities. A user that initiates a contract workspace project has to select a project template, besides several project meta-data. This project template serves as a starting point for a project. Templates are usually pre-populated with documents, tasks, and team members.

In SAP Ariba Contracts, there are multiple ways to initiate the creation of a contract:

Creating a contract request
Copying an existing contract
Creating a CW from scratch
Starting from a sourcing event, for example an RFP, where you create a contract after the event has been awarded

View of a newly created Contract Workspace

Contract related data is collected through header fields on the following workspace areas:

Overview - where information such as contract status, commodity, and owner name is collected
Contract Attributes - where you must enter data such as the supplier name, contract amount, and type of contract (stand-alone, main or sub-agreement)
Contract Term Attributes - containing contact specific data, for example effective and expiration dates, and whether it is a fixed term or perpetual contract

Commonly after the contract workspace is created, the team members of the contract workspace project are validated in order to guarantee that the correct stakeholders are included for collaboration and visibility purposes. Users can be added to the different project groups and then are assigned tasks per template design.

View of the Team tab in a Contract Workspace

Contract Authoring

Once the project team and contract tasks and phases are in place, users can start working on the contract documents. This marks the start for the contract authoring phase.

Based on the template configuration certain documents are automatically added to the workspace. For example, if the CW is a follow-on project for an awarded event, the Documents tab might contain a contract line item document (CLID) with the pricing terms negotiated during the sourcing process. Contract owners can, however, also add ad-hoc documents based on the specificities of the contract.

Supplier agreement versus own agreement

When creating the contract, the contract manager has the option to use either the supplier paper or the buyer paper. If a supplier paper is being used, the contract manager must receive the supplier paper (contract) and upload it into the contract workspace. These contract documents will be regarded as non-assembled documents in the contract workspace.

Should the buyer paper be chosen, the contract manager will have a template available post creation of the contract workspace which utilizes the preferred contract clauses of the organization as agreed with the legal team. These type of documents are regarded as assembled documents in the contract workspace. Such documents are the main agreement and the contract addenda.

To work with assembled documents the Enhanced Contract Authoring features must be turned on.

The contract manager can then make updates to the pre-prepared clauses, swap with an alternate or fallback clause from the clause library, draft a new clause, or delete an existing clause. You can load all documents in a workspace as non-assembled documents. However, assembled documents enable you to use contract authoring features.

If pricing is not available from sourcing this must be prepared and uploaded into the contract workspace as part of the agreement or as a separate supporting document to be negotiated.

Example of documents in a Contract Workspace

Contract authoring features are a set of features that provide additional functions for working with assembled documents. Among others, contract authoring enables an organization to maintain a library of clauses to be used during the contract lifecycle management process. This ensures agreements drafted utilize standardized and legal approved clauses and terms.

Business Process Overview

An assembled document can have multiple subcomponents, or sections and clauses. SAP Ariba Contracts provides an outline view that shows the section structure and clauses and enables you to edit the section structure, and to move, add, replace, or delete clauses.

The clause library will be maintained primarily by the legal team. It is their responsibility to review, update and delete clauses within the library to ensure the latest and endorsed clauses are available by use for contract managers in their contract agreements. Contract managers can request updates to clauses or new clauses in the library, these will all route to the legal team to review and approve as necessary. If used, the contract workspaces will be templated with a main agreement assembled with the preferred clauses of the organization. During the negotiation and execution phase of the contract management lifecycle, contract managers are free to update clauses within the main agreement or replace them with alternate or fallback clauses available in the library. These changes will automatically trigger an approval notification to the legal team to review the updates made to the main agreement

To make changes to assembled documents you can use the SAP Ariba UI or open the document in Microsoft Word and make the edits there. As the UI and Word are synchronized, any changes you make will be updated in both views. Using assembled documents in a contract workspace is not required. You can upload documents in formats such as Microsoft Word, Excel, PowerPoint, Graphic Files, and PDFs

Play the video to view the steps in the contract creation and authoring process.

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