Do you want to squeeze every drop of goodness from every supplier contract you negotiate? Now it's possible – without having to employ an army of people to keep a 24/7 eagle-eyed watch on dates, details and deliveries.
In a recent blog, we explored the reasons why so many supplier contracts fail to deliver
on the savings and other hoped-for benefits envisaged by negotiators.
As we discussed, many hard-won advantages are lost if contracts are simply not visible to staff who make purchases. Agreements can be duplicated and volume savings missed easily. What's more, organisations on both sides may be at risk if contracts expire, or if either party fails to maintain compliance with contract provisions.
However, with the right contract management solution, companies can keep control of agreements throughout their lifecycle and use them consistently when buying goods and services.
The great news is that this radical change doesn't require an increase in headcount. In fact, a range of highly-automated tools and features can save Procurement teams from trying to monitor scores of complex contracts. Put simply, you're freeing them from a near-impossible task.
What should I look for?
Here are the essential ingredients:
Electronic Contract Repository
With this component, the problem of invisible agreements can be tackled. A central store for all supplier contracts can be made accessible online for all your buyers, including those in remote locations. This repository could feed into your sourcing systems to make searching easy too. What's more, the repository could also show user roles, contract take-up and the ability to re-award contracts.
Scheduled Event & Timeline Monitoring
Someone needs to keep an eye on key dates – but a software routine can handle this far more efficiently than a human. With the right tools, all supplier contracts can be periodically reviewed and so scheduled events or milestones are addressed at the proper time, rather than being missed or handled in a panic. Event schedules, alerts, reminders and automatic payment generation for deferred payment schedules can help you to ensure you stay on top of every contract.
Contract compliance on both sides is essential to maintain if the full benefits are to be achieved. The right solution will keep score, thanks to reports that highlight any off-contract spending and specific key-performance indicators. These can keep track on whether both sides are living up to their commitments – by commodity, quantity and other factors.
Full two-way integration between the central contracts repository and your purchasing system is essential if you want buyers to keep accessing those carefully-negotiated contracts. With the right tools, users can avoid switching systems mid-process. Agreements are visible and available when they want to buy and the system automatically maintains up-to-date records of purchases against the contract for reporting and analysis.
Handling everything efficiently
Today, it's extremely hard for the best Procurement teams to monitor coverage, compliance, performance and risk. But the right contract management solutions represent a huge breakthrough, handling complex and time-consuming tasks with ease.
Take a look at how to drive the maximum value from every supplier contract
. Now it's possible to gain control and visibility across the entire contract lifecycle –
for every type of supplier agreement.