5 Benefits of Automated Contract Management
At your business or organization, you probably handle a pretty hefty workload. From managing contracts with vendors and partners to ensuring you’re not taking on any unnecessary risk, there’s undoubtedly a lot on your plate. To reduce your workload, smooth out the process, and make things more efficient, it might behoove your organization to consider using some form of automated contract management to help. Think of it as a set of tools to streamline your work while helping you reduce risk and other issues with vendors and customers. Here are a few benefits of using automated contract management.
One of the things about contracts is that they can be loaded with risks at times. So, how do you mitigate these risks without violating the terms of the contract or upsetting the client? By using software to guide you! Third party risk, compliance risk, and even supplier risk can all cause major problems if not handled appropriately. Contract software helps manage these factors and helps you drive more value from your contract while helping you mitigate any potential problems or risks. Whether you’re worried about financial risk, legal risk, occupational risk, or any potential negative impacts on your business, software can help you come up with ideal solutions and ways to manage/mitigate any possible problems with your organization’s contracts
Another key consideration for contract management is being as efficient as possible. Streamlining the contract process to make things more efficient is one solution. Making your contracting more efficient comes down to being able to quickly flag potential issues and to highlight any potential risks for rapid legal review. It’s also important to ensure the contracts get matched to any spend monitoring procedures so you can ensure everyone is receiving optimal value from the contract terms. Collecting all of your contracts within a single hub is also a great way to improve efficiency. It doesn’t matter if they’re on paper or if they are digital (although digital is probably the easiest to manage) will also go a long way toward improving your overall contract efficiency. Other ways to improve contract efficiency aside from automation are to constantly review your process and to implement review procedures so that you can be on top of everything as often as possible.
Time is a finite resource and this idea remains constant throughout the entire contract life cycle. That’s one reason why you want to make sure that your entire contract’s life is done in a timely and reasonable manner conducive to fostering a positive relationship. From sourcing to procurement to payout, quality contract lifecycle management can mean the difference between a successful supplier interaction and losing precious capital over a botched contract. Utilizing automation software to its full potential can open the means to automate a great deal of this process while also ensuring the integrity of each and every contract within your organization throughout its entire life.
Better Spend Management
Another key aspect of contract management is spend management. Really, making contracts with suppliers works in conjunction with managing your company spend much more than you might think. Some contract life cycle software uses a unique filtering method known as risk scoring. When a supplier engages in risky behavior or causes issues along your contract work, they can be given a risk score. The software will assess these risk scores and analyze potentially risky areas and scenarios. This arms you with the knowledge you need to assess the risk on your own end and determine if mitigation measures need to be taken. It’s scalable across your entire organization and every contract you have, making it an invaluable asset as you monitor and manage your spend risk.
When negotiating your contracts, you want to maximize and optimize the value each one brings to your organization while remaining mutually beneficial to suppliers or vendors. By connecting all of your contracts and your entire contract life cycle workflow together, you can essentially have a quick look in real time at any potential issues or possible problems that you’ll need to resolve. In this manner, you’ll end up maximizing the value of every contract you have by virtue of keeping a close watch on everything. Compliance, the length of time it takes to realize contract benefits, and better spend visibility are all attainable and at your fingertips when you switch to contract lifecycle automation.