Legacy vs. New Age Contract Management – Resolving the war in Middle East Procurement

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Contract Management Life Cycle

Contract Management Life Cycle

Having seen the challenges posed by legacy systems, let’s explore how technology can help us resolve the issues in the post-war period.

Contract Management Life Cycle

Contract Management Life Cycle

Resolving the challenges with New Age Contract Management Systems:

Challenge 1:- Low visibility

  • 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.

Learn More: Contract Lifecycle Management Software;

How have you resolved a challenge? Share your views in the comments section below.

 

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