Join us at the WorldCC American Summit in Dallas for another installment of Contract Heroes! This episode features Sharyn County, the General Manager of Procurement, Property, and Fleet at Jemena and Zinfra. Jemena and Zinfra focus on implementing biogas solutions, greenifying through sustainability, and broadening the reach of the energy industry in Australia.
Sharyn brought a unique perspective to our conversation, centering around the challenges of contracting in the energy industry. Read on to learn how she and her team navigate CLM, prioritize contract compliance, and promote proactive collaboration between procurement, legal, and other contract stakeholders within the organization.
Contracting in the Energy Industry
To provide context to our discussion, we started off by asking Sharyn to inform us about the common pain points that come with navigating contract management in the energy industry. She centered her response around three main challenges:
- Enabling contract visibility in the form of a single repository for all stakeholders.
- Defining and communicating the desired outcome of a given contract, especially with suppliers.
- Measuring the economic value of each contract.
Sharyn explained that contract visibility in general is a problem for many in the CLM space, but making outcomes visible to suppliers is a bit more specific to her industry. They need to be able to collaborate with industry peers in a way that communicates the outcome they are trying to achieve from a contract and determine whether or not they have gained that outcome. This then leads to measuring the economic value of a contract, a side of the contract that the procurement department doesn’t always assess. However, it is necessary for quantifying contract success.
Sharyn further emphasized the importance of communication and building strong relationships with suppliers as she spoke about the ways to evaluate the quality of a contract. Building out energy networks requires a large amount of resources which are not always attainable, especially when multiple companies need them. So, from the procurement perspective, having quality contracts alone is not enough. The best way to keep their supply chains stable is to create strong relationships with suppliers. Quality contracts are certainly part of that, but they also require honest communication about expectations and outcomes to be successful.
Sharyn added that many of their biggest vendors supply the components needed to build out energy networks, like transformers and pipes. Those components usually come from around the world, so it can be difficult to obtain them without strong supplier relations.
How to Prioritize Compliance
The energy industry is highly regulated, making compliance a key factor when it comes to managing contracts at companies like Jemena and Zinfra. We asked Sharyn to tell us about how she and her team deal with compliance in contracting.
She began by explaining that their procurement team works to stay up to date on relevant upcoming legislation. This way, they can be prepared to work very closely with the legal department and incorporate necessary changes into their contracts.
They also make an effort to explain any alterations or additional clauses to suppliers rather than springing changes on them without warning. By taking time to inform the supplier and let them know why the change is necessary or important, they can avoid prolonged negotiations and maintain healthy supplier relationships.
Another unique approach they take is to work together with their industry peers to create solutions. Many of them share the same suppliers or similar contracts, so they get together to share information and learn from each other. Combining information enables all companies in the industry to solve larger problems that they might not otherwise be able to solve alone.
Some examples of regulations they must pay attention to in the energy industry include:
- Supply chain visibility.
- Security of critical infrastructure.
Proactive Collaboration Between Procurement and Legal
Jemena and Zinfra’s hunger for collaboration also extends inward, with the procurement and legal teams frequently working closely with one another to evolve their contracts. Sharyn spoke of strong relationships formed between legal and procurement as well as among other support functions in the company, all of them banding together to support the business. She believes that, if they do not make efforts to work collaboratively and maintain those relationships, they will end up stalled in their processes with no contracts reaching their end points efficiently.
Sharyn’s proactive approach to collaboration requires inviting the legal team to participate in and understand procurement processes. She frequently welcomes attorneys into procurement meetings and also ensures they have representation on the leadership board.
By trying to understand each other’s roles and taking time to explain what they need through the lens of procurement, they can avoid throwing contracts back and forth over the fence. Having a conversation and providing context for the outcome they want to achieve makes things easier and smoother on both sides, eliminating the need for inbox wars.
Sharyn holds out this collaborative hand to other contract stakeholders as well. She welcomes conversations with all support functions within the business, relying on their information and perspectives to help formulate a strong plan for the future. Even when defining the plan for the procurement team over the next few years, she wants to know about the activity that other teams anticipate in order to inform procurement decisions.
In the wake of AI, Sharyn also believes it is essential for support functions to showcase how they meet the needs of the business and add value. If they continue to be very clear on their value proposition and demonstrate their abilities to deliver to the revenue and bottom line of the business, they can ensure they will not end up “AI’d out” in the future. “How do we shift to being busy on stuff that adds value instead of stuff that robots could do in the future?” she asked.
Even more importantly, they must be able to phrase that value proposition in a way that the whole business will understand, not just their own department and the other support functions.
Sharyn’s Advice for Promoting Collaboration
Towards the end of our fantastic discussion with Sharyn, we asked her to offer up some advice to anyone struggling with collaboration and expanding their gaze to focus on the big picture. Persistence and patience seem to be her biggest takeaways.
“Generate the time for curiosity, engagement, and collaboration,” she said. “Push yourself through the door. Say we need to work together. Show why.” Demonstrating the “why” to reluctant teams is especially important for good collaboration. Explain how sitting down and having a conversation would benefit not just your department, but others as well.