Сontract management is one of the most critical elements of the procurement process. Nowadays, most companies manage contracts manually by “warehousing” folders in cabinets. Such contract management inefficiency leads to a series of negative consequences that affect the overall company performance — you cannot manage what you do not see.
The importance of order in the workplace
The lack of order increases manpower, causes contract delay, eliminates the possibility of making changes and signing a new contract. It also leads to monitoring failure and analytics failure, provokes the lack of adequate communication with suppliers, causes data loss and increases the number of costs. The list is endless. According to Aberdeen Group, about 15% of the contracts in the companies are lost.
Contract management is an integral part of the entire p2p process flow. Contract management as a very time-consuming business process underlines the need for efficient and automated work system with contracts.
Modern contract management tools can bring new life to old processes. If you want to organize and streamline the procurement but still ignore the contracts, then you distance yourself from the success.
Today, cloud solutions, especially e-procurement software, are rapidly gain popularity. With their help, digitizing and automating of the entire contract management process becomes easily accessible.
The main advantages of contract management automation:
Reduction in time spent on contracting, alteration to existing contracts and their termination;
Simplifying and speeding up the research of the necessary contract;
Creation of storage that is available to any member of the procurement team, and as a consequence – higher speed access.
Contract regulation and fence-mending – reduces the amount of new, concluded without valid reason, contracts;
Condition monitoring, contract expiration tracking, price monitoring – allows to make the right decision for the company (update, review the conditions or terminate the contract);
Reduction in labor costs – integration with automated contract management service allows to free up an enormous amount of man-hours and automates countless processes;
Cost reduction – improves your company’s efficiency.
Analytics and reporting are becoming more affordable and qualitative;
Increased visibility of procurement groups of any size – leads to better procurement planning;
Transparency in the field of procurement.
The business world is changing, making contract management more important than ever before. Modern p2p solutions significantly simplify contract management process, bringing more visibility, transparency, and efficiency in the strategic procurement. They save you time, money, and extremely improve your company’s performance.