4 Benefits of Contract Management Systems13/12/2016
Contract management is an important aspect of managing supplier relationships and ensuring that products and services are negotiated at the right time and continue to receive support throughout their lifecycle. Unfortunately, contracts are often managed poorly within an organization.
Even a smaller company can have hundreds of active agreements, adding up to thousands of contracted products and services with multiple associated terms and clauses. As you may know, not one of those contract terms carries much weight if the agreement isn't monitored and enforced. Procurement Managers know that getting a fair price on goods and services is only part of strategic sourcing. And contract management tools help companies get the most out of the agreement terms that buyers spend so much effort negotiating.
This short blog outlines the 4 most important reasons why you should consider introducing a contract management tool into your organization.
1. Everything in one place
It might sound like a simple benefit, but don't underestimate the value of having a central place that everyone in the organization knows is the "go to place" for anything relating to a supplier or contract. Make sure that what you have as your central place is easy to access, simple to understand and is secure. If your central place is a modern contract management software tool, then your people are more likely to use that tool. Make sure that getting data into the tool is painless and that your people get something useful out with minimal effort.
With everything in one place, the task of managing contracts and associated suppliers effectively becomes a whole lot easier. As you are aware, it is important to keep in contact with your suppliers and be up to speed with the delivery of your product or service, but it can be an overwhelming task that, because of competing priorities, gets forgotten. Having a tool means the burden is spread throughout the team, knowledge is captured at the time and data is not replicated in multiple spreadsheets.
Organized Database = Smarter Spend. Unlike the email inbox you use every day, contract management tools provide sorting and searching functionality to quickly locate the document you need. Having an easy-to-use catalogue of your company's agreements is one of the first steps to reducing off-contract spending. With a quick search, your facilities manager will have pest control, snow removal and other agreements on hand.
You can upload documents, add notes, monitor supplier performance and lots more important tasks which you can't do easily without the help of a contract management tool.
You'll be glad you had a contract management system in place when it comes to supplier disputes, senior management requests for information (we want it yesterday!) or the time for the dreaded audits - give the auditors (restricted) access to your central store and let them take what they need. In the event of disaster, having an off-site central store of your data makes your team's data disaster proof.
2. Become a cash generative team
An organized database may help bring to light areas for smarter spend down the road. For example, would having multiple agreements within a single supplier offer better terms considering the amount of business you give them? Or could you consolidate to a single supplier if you had multiple vendors in a single category?
In addition, you can actively monitor those Key Performance Indicators that involve credits. A good tool will allow you to get the supplier to self-monitor their performance and either you will generate cash for your organization or get an improved service or product - either way it's a win-win
Both techniques can easily generate more income than the cost of the tool and are therefore a great basis for your business case for investment.
3. Keep track of important dates
It's vital for businesses to stay on top of important contract dates. Automated alerts make doing so significantly easier. Contract management tools let users schedule notifications as needed, so you never miss key dates of a contract's lifespan. Here are just a few examples of valuable alerts:
- Expiration dates of critical supplier certifications
- Annual supplier compliance checks
- Auto-renewal dates
- Performance reviews
- Contract end-dates
The negotiation of a contract is only part of the strategic sourcing process. Companies also need to ensure that they are adequately managing the agreement throughout its lifespan. Using the proper tools to track and monitor contracts will impact your company in a positive way, and make a big difference in managing supplier relationships and spend.
4. Create more time
How many times have you found yourself scanning through contract clauses, looking for just a few key words? Besides storing soft-copies of signed agreements, contract management systems enable administrators to pull out the key contract terms and fields for quick viewing. This means no more flipping through pages of agreements to find your termination options, payment terms, fixed pricing duration, etc.
Just by having contact details, documents, termination clauses, contracted values (and lots more) only a couple of clicks away means you claw back time that was once dedicated to fighting with spreadsheets or getting lost in filing cabinets.
intelligentcontract.com is a modern Contract Management Solution which is already servicing a growing number of clients across most industries. We have templates ready to deploy to ensure your organization can benefit from effective contract management. Deployment is typically achieved within 3-6 weeks including the upload of your existing agreements.
You can start using intelligentcontract.com from £29 per user per month.
Click on www.intelligentcontract.com to find out more, see a video demo or book an online demo to see how the product can help your organization.
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