If you drew up a flowchart for your contract management procedure, just how convoluted would it look?
Do you have a legal department? Are they involved with every contract? How many individuals need to sign off on an agreement? Do you need multiple signatures, and when the contract expires do you need to go through the whole process again?
Contract management is critical, and often complex, though primarily administrative in nature. Each step is often handled by different people within different departments, and there isn’t always the most effective communication within departments. This leads to lengthy processes and potential for error resulting in money lost through inefficiency, correcting mistakes and, worst case scenario, to litigation.
Thankfully, since the pressure is on organizations to join the digital revolution, and adopt technological advancements that will cut down bureaucracy and unnecessary red tape, most businesses are looking at ways to streamline their processes. Contract management is certainly no exception.
In this blog, we explore our best strategies for simplifying your contract management process.
1. Make strategic buying decisions
The right supplier to do business with needn’t be the cheapest. The right supplier for your business is going to be the one you can work with to become a strategic partner. One to shares your ethos and who is interested in a mutually beneficial relationship.
Through being less transactional with your suppliers, you can look to build longer-term relationships where you can collaborate and innovate and add value to each other’s businesses. Contracting these kinds of deals is much simpler because not only is there a bigger payoff when the deals are long-term, but there tend to be fewer issues to iron out when both parties are on the same page from the outset.
2. Streamline your agreements
Once you’ve settled on the right people to do business with, then the next key step is to really hone your agreements and terms to ensure that they are clear, concise and leave nothing to interpretation. The legwork that is required for your legal team to draw up reams of Ts and Cs, and for your supplier’s legal team to pick over them can’t be the best use of everyone’s time and resources. It is best to consider what you want from the deal, what you want to protect yourself from and to present these terms in the most efficient, straightforward way.
3. Facilitate and encourage teamwork
A big problem with contract management is that multiple stakeholders have involvement with negotiating, drawing up, deciding or managing a different aspect of a deal. If communication isn’t functioning to its best, and if everyone uses different processes or platforms then information can get lost or misinterpreted.
Forward planning is necessary to establish the workflow procedure for your contracting process and ensure that every department knows not only the part they play but also the responsibilities and processes of the other teams and how everything fits together.
4. Utilize technology
At ProcurePort, our business is about helping organizations realize their procurement potential through technology. Cloud-based contract management services have had a transformational effect on how procurement departments handle their contract management process. A secure and efficient contract management software solution is crucial for an organization who is looking to unleash the potential of its procurement team.
A digital contract management solution could be just what your business needs
An e-procurement solution saves time, yes. It increases efficiency, true. But what that really translates to is that it enables organizations to free up their procurement talent from administrative tasks and back office functions and allows them to be more directly involved in a strategic business role.
Think of the possibilities. Not only can automation protect your contract management process from the risk and potential for error involved in paper trails and filing systems, but automation is also the key to innovation by providing procurement teams with the tools and agility to really flex their muscle and add value to their organization.
For more insights into procurement best practice and how your business can leverage technology to accelerate your procurement function to new heights, sign up to our newsletter or check out our blog archives.
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