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.
For further reading, click on the download button to access the report- The Why, What and How of Contract Management
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