The sourcing process as it stands today

The RFP Process (Best case timeline)

Day 1: Business unit and Procurement issue RFP to solve a need.

Days 15-24: Business unit and Procurement get RFP responses. Down-select short list of potential suppliers. Get presentations/ additional information from down-selected suppliers.

Days 25-30: Business unit and Procurement select supplier(s).

Day 31: Procurement sends contract to shortlisted supplier(s) via emailed Word doc (maybe through a portal).

Day 45: Supplier(s) returns Word doc via email (or even portal – that’s still painful) with lots of redlines.

Days 46-74: Procurement and supplier(s) go back and forth on redlines. No one is happy.

Days 46-74: (continued)

Days 46-74: (continued)

Days 46-74: (continued)

Day 75: Procurement and supplier(s) finally agree on the contract. Procurement sends the contract to Legal for final approval.

Days 90-104: Legal returns contract to Procurement with redlines. Repeat the back-and-forth between supplier(s) and Procurement based on Legal redlines. Procurement ends up having to accept more risk or pay more because supplier(s) wrote proposal based on certain provisions.

Days 90-104: (continued)

Days 90-104: (continued)

Days 90-104: (continued)

Day 105: Finally – Procurement, Legal, and supplier(s) settle on an acceptable contract. (But still, no one is really happy.)

The sourcing process as it could be – with AI-powered CLM solution ContractAI

RFP Process – Now Including Contracting!

Whereas the sourcing process as it stands today is split between the RFP process and negotiations, with ContractAI, negotiations are minimized because win-win clause options are already set in the contract template. Suppliers are free to choose whichever options they want - understanding that alternative options may increase contract risk or cost to the buyer and impact their selection as a supplier.

Day 1: Business unit has a need. Procurement and business unit craft RFP to solve the need. At the same time, Procurement initiates new contract in ContractAI and configures it based on pre-approved template with supplier options. Issues RFP and sends suppliers link to the ContractAI web app at the same time.

Days 2-13: Suppliers review, complete and commit to the contract through ContractAI web app. Each supplier chooses from alternative options for clauses commonly changed – but different selections change supplier’s score (based on risk and cost). Supplier can see what’s important to the buyer and how different choices will affect their contract score (which supplier knows will impact selection process).

Day 14: In ContractAI web app, supplier signs the contract and sends it to the buyer along with the RFP response.

Day 15: Business unit and Procurement get the Deal Report showing each supplier’s total contract score. They can see which non-template options were chosen and view the risk ratings by clause – all without reviewing any redlines!

Days 16-29: Business unit and Procurement get presentations/ additional information from down-selected suppliers. Business unit and Procurement select supplier based on RFP, presentation, and contract score (which includes a contracting risk assessment so business unit can select supplier based on cost, service, and risk).

Day 30: Win-win contract is signed by buyer and supplier gets to work. Everyone is happy!

Learn How Contract AI Does It (Hint: It’s Real AI)

Pete was able to shrink the contracting process from a painful 105 days to a breezy 30 because ContractAI is powered by real AI (not the fake AI others tout). Only a CLM solution powered by real AI accelerates time to contract and reduces risk.

Get the ebook to learn how an AI-powered CLM solution works, and 6 ways to tell the difference between real AI and the rest.