According to the recent Pulse of Procurement Report,“ Companies with leading edge contract management solutions in place have saved, on average, eight percentage points more than those with behind-the-curve contract management solutions. For a $1 billion company with $500 million in spends, that would equal a$40 million swing.”
Ironically, what happens after the contract awarding phase is most significant because it could, in fact, move your entire procurement process in another direction. Contract management, in other words, the process of negotiating, supporting and managing contracts, is the building block to the success of your procurement strategies. Without a doubt, a successful contract management process in place can elevate your procurement performance to new heights. However, studies have shown that weak and ineffective contract management controls and procedures cost businesses heavily.
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The real battle starts once the contract is signed. Getting the most out of a signed contract is the key that differentiates a successful organization from an average one. There can be clauses in contracts that define milestones and deliverables with dates and quantities etc. Tracking these diligently and taking advantage of discounts is a difficult task, but a strong CLM solution can be your saviour in this regard. Integrating with an ERP can also help in this case when we need to see the progress and consumption of a contract.
The CLM tool should, ideally, remind the user automatically about important dates like contract renewals and other deliverables so that they are not missed under any circumstances. There could be cases of breach of contract when an activity is not performed or when, in fact, it is not performed in time. These are all revenue opportunities that should be tracked diligently. In case of people leaving the organization, or any other eventuality, the show must go on, and the right CLM solution will make that possible seamlessly!
Contract management is the one of the most significant phases of the procurement cycle as it can steer your entire procurement process in another direction. One of the fundamental aspects of contract management is managing the risks associated with contracts.
Download the latest whitepaper from Zycus to gain a detailed understanding on how an astute contract management solution can benefit your organization.
Key highlights of our latest whitepaper include: