Technology innovation has brought new life to old processes and tools that are familiar to many procurement departments, like contract management. Manual, paper-based processes are out, while automated, digitized systems are in. License-based, on-premises software is largely out, while cloud-based, software-as-a-solution (SaaS) is in (and has been for quite some time). And, more procurement departments are gravitating towards end-to-end solution suites that drive source-to-settle digital transformation, whether that is total or incremental transformation.
As a result, more procurement departments are using their enhanced and automated contract management tools, like those offered by Determine, to break down the walls that once existed between themselves and other functional stakeholders (like finance and legal) and other stakeholders in the business. Digital, automated contract management systems can also enable tighter and more effective collaboration with incumbent and new suppliers. According to recent Ardent Partners research, these are exactly the top three strategies employed by Chief Procurement Officers (CPOs) and their departments to improve performance over the next year.
Investment in agile, innovative contract management technology solutions that foster greater internal and external collaboration can be a game-changer for procurement teams that are seeking to enhance performance and mitigate risks. Some of the more collaborative and innovative capabilities found in many of these solutions include:
- Automating the creation or authoring of contracts, amendments, and other supporting documents, which drives faster contract execution by enabling easier authoring and editing as well as reuse. It also allows legal, contract, and procurement teams to work together to customize and/or standardize contracts with enterprise-approved language designed to mitigate risk and potential liabilities and improve supplier performance. In short, automating the contract process can save stakeholders a significant amount of time while also providing greater access and visibility to stakeholders throughout the contracting process and post-execution.
- Centralization of new and existing contracts in a repository is a natural complement to automated contract creation capabilities. Existing, paper-based contracts can now be digitized and stored in online, searchable repositories that provide fast access to summary contract information. Collectively, this allows internal stakeholders (with the proper authority) to quickly reference different contracts to ensure that internal orders and the accompanying supplier delivery are both compliant to the executed agreement.
- Automated workflows, electronic signatures, and straight-through processes significantly reduce the amount of time that it takes to author, edit, execute, and approve contracts. Digital documents can be signed and distributed electronically, moving from one stakeholder to the next with a mouse click. Stakeholders no longer have to wait weeks or months to review, sign, or amend a contract. Automated workflows, e-signatures, and straight-through processes keep stakeholders engaged in the process through execution.
- Alerts and reporting features enhance visibility into contract compliance (internal and external), supplier performance, and the amount of savings leakage that occurs. For example, users can schedule contract completion status reports to run on a weekly basis and keep all parties informed. They can set alerts for when, or if, suppliers do not fulfill contract deliverables, and prompt procurement or some other group to take appropriate action. System users can also set alerts for key milestones, like contract expiration dates, and use them to make timely and better-informed business decisions.
- Mobility features, such as easy-to-read layouts, mobile-first/mobile-ready applications, and touch-screen user-interfaces, allow end-users to take contract management on the road, rail, or in the air. Now, crucial stakeholders are seldom “out of the office;” their input on items such as contract clauses, approvals, or renewal decisions can be given remotely and supported by the same transparency available to desktop or laptop computer users.
Individually and combined, these features foster greater participation in the contract management process by internal stakeholders, who can more effectively collaborate with each other to author, negotiate, and execute their contracts and then buy against and manage compliance to those same contracts. Collaborative contract management can help procurement organizations increase access to relevant stakeholders and existing contracts to drive higher compliance or on-contract spend levels, thus preserving the value it negotiated during the sourcing and contracting process. Ultimately, these features can help procurement enhance contract compliance, mitigate supplier risk, and realize greater savings.
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