Contract Management is an important part of any organization’s sourcing and procurement process. Here are some Contract
Management best practices that can help increase the efficiency of sourcing and procurement functions, minimize expenses and improve the company’s performance:
- Prioritizing supplier management and service-level-agreements:
Procurement Contract Management software can provide end-to-end visibility by allowing contract data to be standardized at the organizational level, as well as monitoring and managing contract terms, and providing vital supplier information.
- Getting rid of manual processes required for negotiations and generating purchasing orders:
Comparing and manually assembling supplier offers can be time-consuming. By automating the process of negotiation and supplier identification, best practices for achieving the desired results may be realized.
- Improving the productivity of the procurement process:
Adopting a centralized contract repository can help procurement teams conveniently manage contract data. Contract digitization helps reduce operational expenses and increase productivity.
- Keeping track of terms and expenditures:
Increasing the possibilities for further savings and operational effectiveness in the sourcing and procurement departments can be done by establishing expenditure transparency.
- Maintaining supplier relationships:
Developing a positive connection with a supplier can help organizations in obtaining supplies during difficult times, resolve and negotiate contract disputes easily.
To increase the value of your Contract Management system during the procurement process, keeping track of the three most important KPIs – contract effectiveness, contract risk and contract efficiency is essential.
- Performing regular audits:
It is critical to audit contracts regularly to monitor contractual performance and detect any risks across company agreements.
Procurement software when integrated with a Contract Management solution can centralize bidding processes, Contract Management processes, and contract records as well as help in tracking the vendor contract expenditure for the procurement budgets.
Contract Management software allows you to easily handle all components of a contract in one location. There are several advantages of using digital contracting:
- Minimize contract creation time: Digital collaboration tools, documented modifications and automated review management tools help to expedite the reviews and negotiations.
- Improve contract visibility: Users can search & view the complete history of contracts including all the versions, amendments, approvers, hierarchy, and updates.
- Simplify compliance management: With automated Contract Management tools, it is easier to monitor and track compliance with contract terms and conditions.
- Enhance risk mitigation: Digital contracting helps in minimizing risks by tracking and monitoring important contract milestones, events, etc. and helps in the identification of contracts that require revisions due to regulatory changes.