As Chief Procurement Officers (CPOs) and procurement practitioners move into 2016, they have the need and the capability for advanced technology solutions to automate and link the source-to-settle process – upstream, strategic sourcing and downstream, procure-to-pay (P2P). Digital, automated supply management solutions can help overworked and understaffed procurement teams scale resources and extend their power and influence throughout the enterprise. It matters less where business leaders implement and drive technology adoption and more that they automate up (or down) the source-to-settle value chain; and that they link the chain for maximum value. Of course, even incremental automation can alleviate staff shortages and workloads and allow procurement to return more value to the enterprise. However, current technology adoption remains low up and down the value chain, leaving significant opportunities for value realization in 2016 and beyond. Let’s sail on further downstream.
For their part, modern contract management tools can breathe new life into old processes and bring agility, collaboration, and visibility to procurement teams of any size. Automated contract authoring tools allow staff to codify buyer-supplier relationships using standard contract templates and approved language that can be edited, processed, distributed, and amended digitally, saving all parties time and money over manual, paper-based processes. Electronic signatures, automated workflows, and straight-through processes allow principals to sign contracts and clauses and automatically route them to the next party with a mouse click. And mobile-first/enabled applications allow all parties with a mobile device and an internet connection to interface with the document, further saving all parties time and money.
Digital contract repositories store contracts in a central, searchable repository that is accessible to any internal party with the proper credentials. Thus, procurement teams can gain greater visibility into existing contracts and return more value to the enterprise by:
- Providing advance notice of contract expiration, allowing decision makers to make the right decision for the enterprise – renew, renegotiate, or “sunset” the contract.
- Cataloging existing contracts and supplier relationships, thereby reducing the number of new sourcing events and contracts that are needlessly initiated.
- Reviewing contract T&Cs and SLAs to preclude a supplier from renegotiating the contract or upselling them on an included good or service.
- Allowing CPOs and other stakeholders, like Legal, to audit contract compliance to determine whether and how much stakeholders leverage existing contracts.
Contract authoring, repositories, and analytics/reporting are increasingly available on applications and dashboards that are mobile-first or at the very least, mobile-ready. Now, stakeholders do not have to be in the office to be in the loop. They can sign on from their tablet or phone from an airport terminal, review a contract, make an edit, and send it on its way via automated workflows and straight-through processes. They can review contract contract compliance rates or expiration dates from a dashboard and make the appropriate call. They can understand how market fluctuations or geopolitical developments could impact the enterprise from a contract liability perspective. And the best part is that they can perform all of these functions independent of IT support, a mainframe computer, or significant training. All told, mobile-first/mobile ready contract management applications can enhance stakeholder collaboration, visibility into processes and compliance, and reduce turnaround times.
Modern contract management tools can drive more visibility, performance, and compliance through the process. They can prevent savings leakage, save the enterprise time, money, and ultimately return value to the enterprise. Although contract repository adoption rates hover near 50%, contract authoring and contract analytics/reporting are still trying to gain traction within the market. This leaves significant opportunity for procurement teams to adopt these solutions, re-capitalize their time and resources, and begin to get ahead of market conditions and risks.