Innovations in Digitization: Fannie Mae

Posted: 10/14/2022 - 20:57
Innovations in Digitization: Fannie Mae

This October, the Future of Sourcing Awards will celebrate organizations and individuals that have shown innovation, leadership and transformation in categories that are critical to the sourcing industry. Interviews with the finalists provide helpful insight about their projects, the problem they sought to solve and the impact to their organizations.

Can you outline why your team embarked on this project and the problem that needed to be solved?

Fannie Mae has been on the procurement digital transformation journey since 2013 when we first implemented Ivalua sourcing and contract management tool, called ProcureOne internally, to manage sourcing/contracting activities and P2P process. This built the foundation for the continued simplification and digitization of our work processes. This has also enabled us to weather the storm of the Covid-19 pandemic and continue serving our customers without missing a beat.  
Despite what we have accomplished, we continue to seek out ways to enhance our capabilities so that we can work better and smarter. The picture below demonstrates our vision and our approach in driving procurement digital transformation. We have been methodical about building a solid foundation and have completed the Foundational Digital Platform phase by implementing ProcureOne. We are now in the Enhanced Capabilities phase with a focus on contract analytics and collaborative contract authoring capabilities.    
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How were things done originally and what was the inspiration to innovate the process?

The contract analytics were done manually by pulling one contract at a time from ProcureOne and searching by key words. This is sufficient if you have one or two contracts to research but time consuming when there are many contracts to analyze. For example, looking for specific provisions or clauses, such as exposure to CPI changes or changes to LIBOR rates, could result in searching through hundreds of contracts manually.   
The contract review/redlining process was done outside of ProcureOne via email among the procurement team, our legal counterparts, and our suppliers. The reviewed contract documents were not tracked/stored in the system and version comparison is cumbersome to manage. This process requires extra time and diligence from all the parties involved.  
The continued efforts to provide insights to our customers and optimize our business processes drove the change. The basic contract analytics capability limited the level of insights available and the time it took to get them. While reviewing/redlining contracts among three parties by email is something the team can do and do well, it is neither optimal nor efficient. The market offerings for contract analytics have grown very quickly in the past few years; the contract authoring capabilities have existed for some time and has matured over the years. We decided to take advantage of these technologies and go through the short-term learning curve for the long-term benefits.

What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)

We implemented the DocuSign Insight Contract Discovery and Analytics tool and an Ivalua Contract Authoring pilot. DocuSign Insight allows for an efficient search of hundreds of contracts and lessens human intervention. With this capability, we save hundreds of hours of research on time sensitive analysis. For example, we used the contracts analytics capability to identify all contracts that had exposure to significant changes in inflation. Similarly, we leveraged this capability to identify all contracts that have audit requirements/provision. We also efficiently compared changes between executed contracts and our standard contract templates to identify change patterns and template improvement opportunities.  
With the pilot implementation of Contract Authoring capability for non-disclosure agreements (NDA), we realized the benefits of a streamlined process, auto version control, easy version comparison, as well as an integrated DocuSign signature process. With this proof of concept, we are well positioned for a full-blown implementation for more complex contracts.

How do you plan to ensure that the new model remains relevant and adapts to the future needs of the market?

Digital transformation is an evolving process. As technology continues to improve and offer better ways of doing things, we continue to learn, identify new use cases, and expand our use of the tools. Our main use of the DocuSign Insight is for searching for information in contracts. As we gained knowledge about the tool, we started to use it to analyze contract variance between templates and executed contracts so that we can identify improvement opportunities. We are considering using the tool to do the data input for contracts record or contract clause scoring. Business requirements and technology will continue to change, and we, in response, will continue to use the technology to improve our work processes and draw more insights to stay ahead of the changes.

What advice do you have for those who may want to implement this innovative approach in their own organizations?

  • Digital transformation is a journey. Have a big picture in mind before you start the journey and be methodical about your approach. Sometimes one step at a time is needed for the ultimate success. 
  • Expect the learning curve. Train and communicate. The new tools/technologies bring new ways of working while at the same time, push people out of their comfort zones. For example, people use email and Word documents to manage contract redlining process for years and they know the process very well. Moving to using Contract Authoring, they need to learn how the process works and be proficient with it before they see the benefits.  
  • Develop in-house experts to facilitate the training and user adoption 

With innovations in digitization occurring very quickly in our industry, how do you see this specific project further transforming in the future?

In addition to the benefits in efficiency, the contract authoring and contract discovery and analytics tools have encouraged the team to rethink what is possible. For example, some of the procedures established for the email contract redlining process out of concerns for the contract document integrity can now be eliminated, thanks to the document tracking and version control capability of the Contract Authoring. Many of the contract analytics that were too labor intensive to do in the past can now be done with the help of DocuSign Insight tool much more efficiently. The new capabilities further simplify team’s daily work and enable the team to continuously optimize the work processes and proactively obtain insights from the contracts to facilitate their decision-making.



About The Author

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The 2023 Future of Sourcing Awards recognizes organizations and individuals that show innovation, leadership and transformation in categories that are critical to the sourcing industry. The Awards will take place on October 18, 2023, the capstone evening at the SIG Global Executive Summit. Attendees will enjoy dinner, networking and an awards ceremony that brings together some of the brightest minds to create a truly remarkable experience.