Contract management is not a naturally efficient process. There are regular renewals, miscommunications, supply issues, and constant back-and-forth communication with vendors. Every interaction has the potential to waste time. Every misunderstanding can lead to lost revenues and angry customers for both parties. The function of a procurement contract is to build stability into the supply line so these pitfalls can be avoided.
On top of efficiency issues, remote work is a growing trend affecting many global industries. According to Forbes, remote workers are expected to grow in number across the public and private sectors. The adoption of e-procurement means our industry is facing this shift too. To deal with the changing technical aspects of our work, transparency is needed to keep contracts in line. Digital migration of procurement processes is an element from the technology world that has the potential to build both efficiency and transparency in our industry. Contract management, especially, is a targeted focus of going digital. Let’s look at 6 reasons your procurement team needs digitized contract management.
1. Safe Storage
Digitized contract management frees companies from paper. Paper is easy to lose, damage, and degrades over time. Do you remember the first fax machine paper when the ink would fade after less than a year in a file cabinet? Given enough time, all paper meets with the same fate. Storing e-procurement contracts digitally is safer than outdated physical records. Digital records are more permanent. They don’t degrade over time. Even old files can be converted, archived, and maintained after decades. Digital records are safe in the event of a disaster. Modern digital storage practices like off-site and cloud-hosted repositories are even more resilient. Moving to digital contact management means that your procurement history will be future-proof.
2. Digital Organization
The organizational powers of digitization cannot be exaggerated. Moving to digital storage of e-procurement contracts and peripheral record-keeping means your contract library becomes easy to navigate. Not only is drag-and-drop organization a time-saver, but digital contract management in a central repository means you can implement digital tracking. This includes remote editing, versioning with notes about who edited what and when, and metadata tagging so that you can find the correct version of a contract in seconds. No more sifting through files or opening multiple documents to figure out which is the updated or valid version.
3. Remote Access
Cloud-hosted digital contract management is ultimately about accessibility. The procurement industry is largely globalized. Firms work with suppliers in disparate geographical regions. Firms themselves are spread across the globe. Remote work and on-site mobile workers are a growing trend. A common virtual environment brings people together online so they can work together. From chats to auctions, your e-procurement marketplace is accessible from anywhere. An employee at an on-site meeting can bring up a contract for review on a mobile device. She can project it to a room full of partners and close the deal on the spot. This kind of adaptation to remote work is one of the major benefits of going digital.
By digitizing everything, a contract management solution gains functionalities that were never possible with paper. We mentioned automatic sorting. Other digital help that saves time and money include:
- email/SMS notifications – set parameters so contracts don’t lapse
- business process management (BPM) – push processes along
- e-signatures – get authorizations in an instant
- cyber security – keep sensitive vendor data secure
5. Compliance Oversight
Thanks to transparent data sharing, digitized contract management has the ability to analyze big data across the system. This provides firms with tighter control over legally sound procurement without constant legal consultation.
- Do the contract terms align with legal and ISO requirements?
- Will a new contract nullify one already on the books?
- Can you compare suppliers that offer the same product?
Big data analysis prevents costly mistakes by “reading” the data in various integrated platforms across the system and performing cross-checks as the contract process is carried out. Digitized contract management is designed to disallow unsound procurement activity. This also reduces your workload when it comes time to audit. All of this cuts down on calls to your legal team, gleaning ROI from your firm’s legal expense budget.
6. Peace of Mind
More than anything, contract management software gives you peace of mind. Safe storage, digital organization, remote access, automations, and digital compliance lead to less risk and fewer expenses on risk management. Going digital means you can breathe easy because it’s simply the most efficient way to handle contracts in procurement today.
To find out if you are ready to digitize your contract management, request a demo of ProcurePort’s cloud-hosted e-procurement solution today.