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• Managing agreements is a critical part of any procurement process. In a normal procurement process, buyers, usually organizations or institutions, send their purchase requests to suppliers to inquire about product availability, pricing, and delivery.
• So, a significant part of any procurement function is to make and deliver on agreed-upon commitments through formally signed agreements.
Contact management is the practice of managing contracts, from the moment they are created to when they are completed or sealed, and eventually, the termination of a contract. Contract management functions involve examining key performance indicators KPIs against contract terms to optimize operational, financial, and supply chain performance.
Despite the significance of contract management in contract lifecycle management, many contracting processes involve two parties, vendors and buyers. Some contract management processes include contract requests, contract authoring, contract monitoring, signatures, and contract approvals.
Contract management demands that contract managers and legal teams identify ways to streamline complex, time-consuming contract management processes. This streamlining is done to avoid procurement risks and mitigate any risks that emanate in the procurement lifecycle stages.
Seven Contract Management Functions You Can Automate Today
1. Contract Requests
Organizations can automate contract management functions by using automated software. Automating contract requests allows you to optimize dynamic, user-friendly forms that streamline the procurement process. Contract requests are automated to expedite request functions, facilitating contract authoring and contract approval. You’ll be starting your procurement process on the wrong note with out a contract request automation.
2. Data Entry
Data entry is a central aspect of any contract management process. Organizations often fill out purchase orders and send requisition forms through various tools and procedures such as excel, PowerPoint presentations, etc. Entering data manually in computers can be labor-intensive and costly, requiring complex paperwork and repetitive processes. Human labor is prone to mistakes, making the procurement process altogether vulnerable. Automated contract management functions offer automated data entry, allowing organizations to create and send contract requests within seconds.
3. Contract Redlining
Alterations and modifications are a vital part of any negotiation process. A central part of ensuring compliance with established procurement policies and supply chain standards is tracking changes and documenting the person who made the changes. For time immemorial, procurement professionals have tracked changes by downloading documents and using the MS Word application to correct changes after which the document is emailed to the relevant parties. Automation software provides contract redlining capabilities, streamlining compliance, and adjustments in contract negotiations.
4. Contract Monitoring
Every agreement that a business engages in or any contract it signs has dates, deadlines, and milestones. If not closely monitored, these milestones can derail progress. Based on your contract, a single agreement may contain thousands of dates to keep track of and milestones to accomplish. If your portfolio has several documents, staying at the top of each may prove complicated.
There’s no doubt that the more your contract portfolio grows, the greater the need to use automation software. As a result, organizations rely on automation software to streamline the contract monitoring processes. Automation software provides end-to-end contract monitoring, ensuring milestones and key dates are met, and procurement compliances sustained.
5. Contract Reporting
Increased government and customer oversight on sourcing practices have strengthened measures against contract reporting. Nowadays, more than ever, organizations are leveraging advanced software to streamline business reporting. In procurement and supply chain management, reporting has been reinforced by cutting-edge, futurist, best-in-class reporting software. So, keep your stakeholders (clients, directors, investors, and managers) aware of the latest procurement trends by automating your contract reporting.
6. Contract Signing
Staying at the top of the contract signing process can be disastrous without an automated signing process. Signing contracts and ensuring deliberations cross the line is a complicated process involving heavy paperwork and reviews. In addition, sending documents from one office to another for wet signatures adds time to this process and increases the risk of exposing sensitive fiscal and personal information.
Luckily, you can automate the signing process with electronic signature (e-signatures) tools. Electronic signatures expedite the signing process. While some businesses adopt a stand-alone signature solution, most rely on contract management functions with e-signature solutions. It’s advisable to adopt a one-size-fits-all solution for your procurement and supply chain needs. Automating your contract management process ensures that you enjoy multiple automation, all embedded in a single platform.
7. Contract Negotiations and Approvals
Negotiations are intensive exercises that involve meet-ups and virtual huddles. Luckily, digitization has opened an opportunity to automate the contract negotiation processes. The contract management software offers many capabilities that make negotiations easy and timely: document collaboration, version control, and contract oversight. In addition, contract management software embeds advanced functionalities like tracking changes and managing clause ownerships.
Contract approvals require gathering information and consent from all the authorizing parties and stakeholders: department heads, legal teams, and procurement personnel. Chasing down procurement teams via emails, phones or other communication channels can prove inefficient.
A contract management software comes with a contract eApproval tool and functionality. The eApproval functionality covers all the rejections and approvals within a centralized platform, allowing faster negotiations and approvals.
ProcurePort – Streamlining Your Contract Management
ProcurePort is a provider of automated procurement and supply chain solutions. ProcurePort offers diverse automation solutions, including but not limited to RFQs, RFPs, RFIs, spend analysis, procure-to-pay, and purchase requisition.
At ProcurePort, we believe that contract management captures standardized contract creation tools, KPIs, and automated reminders of important contract milestones. An essential part of contract management is conducting compliance reviews and including fiscal metrics in contract reviews.
Contact ProcurePort to streamline your contract management functions.