We discussed the obstacles while managing contracts – manually or by leveraging technology, in our previous blog.
In this blog, we will focus on the benefits of contract management automation:
- Reduced cycle time
Reduction in the contract cycle time by comparing two different version of contracts side-by-side, automating approval work flow and signature process with eSignatures.
An Aberdeen 2010 study identified a decrease in time to process a single requisition to order cycle from 6.3 to 5.0 days. Standardizing the contracting process by use of templates also helps cut down on the cycle time.
- Reduced maverick spend
Reductions in maverick spend. As per the Aberdeen study, organizations using contract management systems reduced maverick spend from 22% to 19%.
- Risk minimization
Reduced exposure to risk and assured commitments from suppliers is met, thus facilitating better supplier management. If the supplier has agreed to a price reduction when the volume increases, then the contract management system will trigger an alert to make
Learn More: Zycus iContract Solution;
- Cost benefits
Provides cost benefits by asking the suppliers to make price adjustment when the market price/inflation goes down.
- Higher visibility
Improved visibility into contract utilization by tracking the usage of contract terms and conditions.
- Centralized data
The chances of lost contracts are reduced drastically as they would be located in a repository which is centrally accessible.
- Improved security
Better security in case of confidential contracts through user/folder-based access
Stay with us as we talk about the best practices for contract management implementation in the next blog, last in this series.
