How do you improve the management of supplier contracts?
You work hard to identify the best suppliers, negotiate favourable prices, specify supplier obligations, and document agreements as contracts. But you know those advantages and safeguards are lost when contracts are not visible to purchasers, and when they are not closely monitored over time. Improving the way you manage contracts can significantly increase your realised savings while reducing cost and risk.
Like many organisations, you likely have some or all of the following challenges:
- Missed savings when employees are unaware of supplier contracts as they make purchases.
- Missed savings when one group is unaware of agreements made by other groups with the same or a similar supplier. Less favourable contracts are used; purchase power is diluted.
- Missed opportunities for contract re-negotiation due to unwanted automatic renewals.
- Potential risks due to supplier non-conformance.
- High administrative costs for management of supplier contracts.
By gaining a clear understanding of the underlying causes of these issues, and then applying the right tools to address them, you can expect to:
- Realise the full value of supplier agreements by maximising the percentage of "on-contract" spend and consolidating contracts for maximum purchase power.
- Take advantage of every opportunity for contract re-negotiation, cancellation, or re-sourcing, to ensure best value is always achieved.
- Minimise risk from potential supplier non-compliance with contract provisions.
- Reduce cost by automating and streamlining the management of contracts (e.g. with automatic alerts for key milestones and events).
- Gain strategic advantage with better information for spend analysis.