You don’t have to be a corporate general counsel to know that managing contracts can be complicated and time consuming. While almost every contract starts with a request and ends (hopefully) with renewal, there’s a lot that needs to go on — and sometimes doesn’t — in between. That’s where an integrated and automated contract management process comes in.
We say it a lot at Corcentric, but contracts are the lifeblood of business. They’re the beginning of relationships, the measure of performance, they can protect (or expose) companies to risk, they set and manage expectations. From sourcing to sales, every stage of a process involves one or more contracts, two or more counterparties and lots of moving parts that are all specific to various functions, geographies, and outcomes.
Obviously, getting them right is critical. You have to make sure your contracts – and the source-to-pay solutions they have a bearing on – are integrated, with dynamic workflows, Business Process Management and a single source of data. The speed of business means the faster and more efficiently you can create contracts, the more competitive your advantage.
Accuracy is everything in contracts, and unless you have deep integration between contract management and areas including supplier management and procurement, and the automated functionality to move things along, you’re giving up advantages (and courting risk). So if you’ve been putting off upgrading your contract management process to an integrated cloud solution from a point solution or cobbled-together suite, here are three benefits you can achieve.
1. Integrated, automated contract management improves business cycle times.
An automated contract management solution with integrated data streamlines the contract process and helps move contracts quickly from one step to the next.
Rather than the bottlenecks inherent in spreadsheets, homegrown systems and limited point solutions, cloud-based contract management lets you configure approval workflows — including parallel and serial — so that the process stays in motion. At-a-glance dashboards show immediately where contracts and associated documents and addenda are in the approval path, and the next person in the chain is automatically notified once an action has been taken – approval or sent back for amendments. Redlining, edits, signatures, trigger emails, alerts – they’re all built into an integrated contract management solution.
Whether triggering a contract creation from an approved sourcing event, or speeding through end-of-quarter business orders—having the process under management streamlines, simplifies, and makes contracting seamless so you can seize opportunities.
2. Integrated, automated contract management mitigates risk.
A contract is only as good as the data used to create it. A single source of Master Data and metadata truth that is shared by solutions across a cloud platform ensures that data is verified and consistent from one process to the next, one department or office to the next, across the entire enterprise.
When your contracts have errors, you open your company up to all kinds of risk. A reliable contract management system can mitigate this risk by capturing all the information for you throughout the request, authoring, and approval process, so teams can focus on increasing business opportunities and not worry about making mistakes that would lead to risk of missed contract renewals, savings on discounts, obligations, and deliverables.
For procurement organizations – especially those heavily reliant on procurement services like financial services, pharma/biotech and healthcare – data consistency and visibility is an optimum way to manage risk from third parties. Without accurate, verifiable information about your suppliers, vendors and other service providers across functions, you could be giving risk back door access into your company.
In addition, with an integrated and automated contract management process, it is easier to realize the full value of each contract. Many automated systems offer fulfillment tracking, automated alerts linked to expirations, renewals, and key events, post-execution workflows, and sophisticated analytics and reporting—these features give you the insight you need to make better business decisions at a higher level, and decrease your risk.
3. Integrated, automated contract management strengthens supplier, partner, and customer relationships.
Many contract management tools give you access to a full range of audit and reporting features like compliance alerts, audit tracking at the field level, on-demand report generation, one-click access from reports to contract records, and easy integration with third-party reporting tools. These tools all give you the insight you need to monitor and maintain better relationships with customers, vendors, and partners.
With tighter control of the information flowing between you and outside companies, you are in a much better position to manage and track not only relationships, but the risk and performance potential in them. You are also better positioned to identify contract renewal candidates so you can create new contract drafts in a timely fashion. When it comes to channel partners, automated contract management gives you the time to focus and manage your resources so you can make the most of your channel relationships.
If you’d like to learn more about the advantages of integrated contract management that features process automations, schedule a personalized product tour of the Corcentric Platform.