Today’s article is the second of two articles from a report that we recently published, entitled, Digging Deep: Leveraging Contract Analytics to Uncover Hidden Costs, Risks, and Opportunity, sponsored by Seal and available for free download by clicking here.
Procurement departments have long used contract management systems to communicate business requirements, track spend against contracts, and manage supplier relationships. Now, new and innovative solutions that build upon these earlier systems enable more robust contract analysis and reporting, as well as help procurement organizations better organize, manage, and analyze their contracts and supplier relationships.
In the midst of a global surge in innovation that has spread across all geographies and across nearly every supply market, the winners in business will be the agile organizations that can tap into expertise and find value wherever it exists in the market. In 2015, managing suppliers has never had a greater potential to impact enterprise performance, and procurement leaders are on point. Automated contract management solutions, particularly those that feature contract analytics tools, can be true force multipliers for procurement departments focused on driving more value from their supplier relationships. In the hands of capable practitioners, contract analytics can help uncover contract non-compliance, hidden costs, missed savings opportunities, supplier performance issues, and supply risks that procurement may have otherwise missed, and help drive the enterprise towards the next level of performance.
This report, Digging Deep: Leveraging Contract Analytics to Uncover Hidden Costs, Risks, and Opportunity, investigates these newer contract analytics tools and the ways that procurement departments can use them to uncover hidden truths residing deep within their contracts. It also provides several recommendations for CPOs and business leaders looking to extract more value from their contracts, including:
- Work aggressively to link the sourcing and contracting processes: After completing a sourcing event, contract management is the next logical step in the strategic sourcing process, yet so many organizations fail to “connect the dots” between the two, and they forfeit much of the savings they worked so hard to negotiate. Ensuring that prices, terms and conditions, and service-level agreements are codified in legally-binding contracts helps to preserve this value.
- Investigate the contract management solutions market: Economic conditions have improved considerably in the last half decade. Moreover, technology solutions have evolved to the degree to which more organizations can now afford to make modest investments in cloud-based, mobile-enabled tools that bring automation and digitization to procurement practitioners. For those organizations struggling to overcome staff or talent shortages to continuously improve, the market has solutions.
- Develop contract analysis capabilities to convert contract intelligence into value: Some solutions on the market today can provide rich insight into an organization’s contract and supplier performance, such as internal and external compliance or liability vis-a-vis sudden market events. Yet, organizations need to seize upon that intelligence to alter management and buying behaviors and make more informed decisions. Doing so will allow organizations to be more agile and responsive to the market, and to preserve more original value negotiated during the sourcing event.
Ardent Partners and the report’s sponsor, Seal Software, are making this research freely available to you. Interested parties can click here (registration required) to download the report.
Contract Analytics, Discovery, and Reporting are just some of the capabilities and technologies that we’ll be talking about at CPO Rising 2016 – an event for CPOs and by CPOs. Take advantage of early-bird discount pricing and register here!
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