It is common for organisations to struggle with the management of supplier contracts. It can be difficult to maintain visibility of contract details, especially as the number of contracts increases. This makes it harder to keep up with key dates and events which affect the renewal/validity of a contract (e.g. auto-renewal unless cancelled within 60 days of contract end date, or supplier certification/insurance expiry dates etc.). Other issues organisations face include, how to maximise awareness of contracts usage across the business, how to reduce excessive administration time and expense, as well as how to deal with paper documents (cost, no visibility etc.) and scanned documents (no P2P integration, inability to perform analysis etc.).
Organisations can overcome these problems by centralising and standardising the management of contracts to:
- Effectively manage and monitor contract details – this can be achieved with a searchable contract repository. This should include, comprehensive electronic information; document attachments; ownership; extensive reporting capabilities; and secure global access. Having this in place would lead to increased contract commitment visibility and reduced risk of supplier non-performance with contract provisions.
- Drive more 'on contract' purchases – this can be achieved by standardising processes to get a handle of all contracts to reduce the cost of unwanted contract renewals and increase savings from greater on-contract spend, timely re-negotiation before renewal and better information for contract negotiation.
- Minimise administrative effort and cost – this can be achieved by integrating contract management with purchasing systems to provide contract visibility at buying time, match invoices against contract terms and collect actual activity. This would reduce the cost of admin support in Procurement and Accounts Payable.
Organisations can achieve this with the PROACTIS Contract Management solution. PROACTIS Contract Management provides a central electronic repository that enables organisations to realise full benefits from supplier contracts; providing clear visibility to purchasers and enabling key dates, events and service level agreements (SLAs) to be managed. The solution helps purchasing departments increase the proportion of spend “under management” and “on contract” by automation and decision support.
Feel free to call us on +44 (0)203 866 8800 for more information on Contract Management, or download the PROACTIS 'Contracts Jump-Start Guide' to see how you can get such a solution up and running in your organisation quickly, efficiently and cost effectively: