Implement a central repository to store and manage contract information.
Identify key terms of a contract which need to be tracked like expiry date, variations and set the respective alerts.
Analyze the contract utilization trends which will in turn help you identify whether contract terms are being followed or not.
Review evergreen contracts and re-negotiate terms if required.
Challenge 2:- Compliance
Integrate your contracts with the organization’s ERP system.
Identify purchase price compliance and rebates by monitoring purchase information with the contracts.
Additionally, maintain a contract repository & track utilization metrics.
Challenge 3:- Standardization
Create standardized contract templates and keep them easily accessible to the sourcing managers.
Track what terms are negotiated most often and change them globally.
Also define a clause hierarchy based on the different regional aspects.
Challenge 4:- Long Cycle Time
Introduce eSignatures and avoid the hassle of manual signatures.
Create pre defined approval hierarchy based on category, spend etc.
Thus the written contract will automatically follow the hierarchy for approval and feedback.
Set clause level approvals where you can define clause ownership and automate the process.
As quoted by Andy Grove, Intel – “There is at least one point in the history of any company when you have to change dramatically to rise to the next level of performance. Miss that moment – and you start to decline”.
To actually reap the benefits from the contracts, organizations need to invest in the right technology and develop the right attitude.