Custom Software Apps & SharePoint Consulting

THE CLIENT

Our client is a Fortune 500, independent midstream energy company operating in multiple shale plays across the U.S. The company’s core business functions include gathering, storing, terminaling, and selling natural gas, NGL products, crude oil, and refined petroleum products.

The company is in growth mode. To manage growth in a market of razor-thin margins while ensuring that product deliveries are handled efficiently and that contracts adhere to compliance controls set by regulatory agencies, the company needed a more efficient IT-based contract management solution.

THE CHALLENGE

Companies in the midstream energy industry manage their business functions through contracts that may be decades old, contain numerous revisions, and exist in disparate forms—from paper copies and digital files to fax and snail mail. Our client managed thousands of contracts through the Documentum enterprise content management system (CMS), which essentially served as a document repository. The CMS was not user friendly or easily navigable, meaning that few people in the organization knew how to use it to find information efficiently. Many older contracts were also stored as paper copies in large filing cabinets.

The company’s Commercial Services Group assigned an individual the full-time responsibility of pulling contract files from the CMS, copying them onto a file share, and generating a report. This report, an Excel spreadsheet with a list of several thousand contracts, linked back to the file share where individuals accessed contracts to pull information. Using a dedicated resource to generate reports was neither cost effective nor efficient, since different business units had different data layout preferences and some required weekly updates to reports. If this employee were to somehow leave the company, there was no backup in place for contract management and report generation.

Creating electronic copies of contracts also proved complicated and costly. The process consisted of printing the contract for review and signature, scanning the signed contract, printing it again, and affixing a lengthy cover page filled out with detailed information on that contract. A third-party scanning vendor picked up a stack of contracts each week and took them offsite to scan into the CMS. The vendor had to manually ensure that pages were in the correct order and that the text was optical character recognized (OCR) for searchability.

Other concerns included compliance with the Sarbanes Oxley (SOX) Act. The Contracts Management leadership wanted more robust document permissions and security. SOX also required the company to retain contracts for a seven-year period and then destroy them, another manual process managed by tracking documents nearing the seven-year mark in a spreadsheet. Without an automatic alarm system for aging contracts, the company risked retaining expired contracts in the CMS.

The company needed a more automated, streamlined contract management solution to replace the Documentum system, which had been piecemealed together over time. The new system must ensure that the company is SOX compliant and free up resources to deliver greater operational efficiencies—a critical goal of any company working in the tight-margin midstream market.

THE SOLUTION

The client contacted Entrance to develop a new contract management system built in SharePoint. Developing the optimal system—one that would ensure SOX compliance, be keyword searchable, track older documents, and automate document loading and retrieval—began by reviewing the Commercial Services Group’s daily contract management requirements.

Entrance also conducted roadmap exercises with the client, which uncovered their data management goals for the next few years, other management systems that might be deprecated during that time window, and the impact that today’s data management design decisions would have on their long-term growth plans. Entrance built the solution architecture in a stepwise fashion, showing the customer new versions of the system every few weeks. With each review, the customer gained a deeper understanding of, and appreciation for, the functionality of the management system as it was being built out. It also permitted Entrance and the client to iteratively add, refine, or remove features. This back-and-forth between the customer and Entrance’s consultants allowed a complex set of business rules and requirements to be distilled down and captured in a user-friendly, easy-to-adopt management system.

With the final management framework in place, contracts were migrated out of Documentum and into SharePoint, and the file share was removed. SharePoint stores all contracts and supporting documentation (including previous versions of ongoing contracts), and controls access through password protection. Authorized personnel generate their own reports in SharePoint through a few mouse clicks, rather than relying on a dedicated employee to pull contracts and other line of business (LOB) data and place them in file share.

To enter a new file into SharePoint, the user states whether the scanned document was a base agreement or supporting documentation. The user also assigns it a contract number, which is pulled from another database. Based on only the type of file and the contract number, SharePoint pulls in attributes from other LOB systems to build the search.

The system is built on Entrance’s FRAC information management framework, which provides Findable Content, Repeatable Process, Analytics in Context, and Collaboration Across Teams. SharePoint’s search functionality lets users quickly search for individual contracts or groups of contracts in a number of ways such as by date range, by region, and by company.

Each contract resides in its own folder, which contains a historical record of all versions of a contract as well as all contract amendments and supporting documentation. Users are sent automatic alerts any time a contract revision is made, and they can then go to the contract folder and view the changes for themselves. This alarm system also notifies authorized personnel when a contract is nearing its seven-year termination point.

To ease the transition to the new system, Entrance provided comprehensive computer-based training to the Commercial Services Group. The training ran through a series of real-world search scenarios and was designed to help group members assist other users in finding the information they needed, quickly and easily.

Screenshot1

Shown above is the Contract and Reporting page. Here the user is able to submit a new file and see recently uploaded files. The search functionality lets the user search for a specific file using keywords and other criteria.

Screenshot2

The above image shows a list view of each contract uploaded to the site. Only 2 pieces of input are needed (file type and contract number) to upload a file. SharePoint then tags each contract with input from other LOB systems for improved searchability.

BENEFITS REALIZED

Entrance migrated more than 24,000 contracts, many of which included 50-100 versions, from Documentum into the SharePoint contract management system. The system’s automated process for generating reports allows individuals to more efficiently pull contracts and find information without the need for a full-time employee or a file share, which lowers operational expenses.

Uploading new contracts is simpler and faster within SharePoint. Users feed the document into a scanner onsite, and the scanned file is OCR at point of entry and sent to the individual’s office computer, thus eliminating the need for a third-party vendor. With just two pieces of input (file type and contract number), SharePoint tags each contract with input from other LOB systems for improved searchability.

The contract approval process is 100% electronic through SharePoint, with digital signatures replacing wet signing. Once the contract is uploaded and stored, the workflow automatically shepherds the document through for approval and signature by all required parties, without additional printing and scanning steps.

The system’s password protections for contract access, coupled with the automatic notification of when older documents should be destroyed, has helped the company achieve SOX compliance.

By providing a better set of features and capabilities that people actually understand how to use and want to use in their daily work, the SharePoint system provides a lower-cost and more streamlined contract management replacement for Documentum that drives greater operational efficiencies and will grow with the company’s business.

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