Although the contract management process can be a time-consuming task, if properly managed, can be one of the most lucrative areas for businesses to build relationships and generate more revenue.
Contracts are essentially the foundation of all business relationships. However, the growing number of contracts consequently increases their complexity and amendments. So, it becomes challenging to manage the key information in the contracts. Contract management is the process that enables both parties to a contract to meet their obligation and deliver the objective required from the contracts.
A contract lifecycle management platform simplifies contract management processes by providing the ability to manage and avoid compliance issues and other risks through templates and approval workflows, deliver more revenue and faster with e-signatures, streamline negotiations with online redlining, and easily manage documents after they are signed. This eventually helps organizations grab opportunities that may otherwise have been missed.
Forward-thinking companies are turning to contract management platforms in order to mitigate risks, reduce costs, and increase profitability. Are you one of them? Request a proposal to find out how it’s done!
Importance of contract management
Effective contract management is vital for ensuring that the terms, conditions, and deliverables in a contract get executed in the desired manner. Some of the factors that prove the importance of contract management in procurement organizations:
- Ensures that both the parties meet the contractual obligations.
- It provides a well-documented audit trail.
- With contracts, rebates can be easily tracked and also ensure the saving are negotiated and captured.
- Potential breach of contract situations can be eliminated.
- Maximizing financial and operational performance and decreases the level of risks.
Top contract management best practices
For each proposed contractual arrangement, you should get in the habit of going through a checklist of the actions that you might be expecting to take in order to assist the company. It is likely that companies will eventually develop their own checklist; however, when first starting out SpendEdge recommends that companies consider each of the following contract management best practices
Reducing costs through shorter cycle times
Through automating contract milestone, payments, processes and reporting organizations can benefit from proactive contract management and reduced administration costs.
Consistent variations management using holistic approach
Changing conditions, terms, and other aspects challenge organizations without proper control and viability, contract management solutions deliver integrated variation management to track and report, as well as interfacing to budget and finance systems in real time.
Business operational processes and administrative workflows can be automated with the help of simple workflows, notifications and document version management. Eliminating ad hoc processes reduces risks, thereby making contract management more predictable.
Contract data for decision making
Advanced contract management systems are embracing machine learning and deep learning artificial intelligence techniques to further automate, manage data and deliver analytical capability that can predict risks and deliver insights that enhance decision making. Predicative artificial intelligence based insights and analytics can be used to influence policy and strategy, and inform financial, risk and compliance management.
SpendEdge’s contracting support teams help organizations compress the time from agreement in principle to a signed contract, reduce contract risk and ensure that they get the best possible terms. Get in touch for more information.