Facing the worst economic crisis since The Great Depression, enterprises are in a constant battle to manage spend and control costs. Procurement is the chief architect of spend management and savings, and procurement has at its disposal an underutilized tool to meet savings expectations: contract management. Procurement contracts represent the culmination of spend analysis and sourcing efforts and are used to subsequently guide the purchasing process for the commodities and / or services covered by outlining negotiated prices, expected supplier service levels and agreed upon concessions and commitments on the side of the buyer. The effective management of the contract creation process in combination with the development of greater analytics and reporting capabilities around contract compliance delivers real value and returns for enterprises.
- Five Compelling Facts from the Research, Providing Actionable Benefits for Readers:
- Best-in-Class companies experience four times less savings leakage than All Others
- Best-in-Class companies realize 15% to 20% lower contract creation and approval cycle times than their competitors
- Best-in-Class companies have been able to place 59% more spend under management than All Others
- Best-in-Class companies are able to place 42% more spend on contract than their peers due to more effective contract management
- More effective management of procurement contracts has led Best-in-Class companies to capture 46% more of their negotiated discounts and rebates