How contract management software positively affects your bottom line
Most people think contract management is a simple process: sign the contract and shove it in a file cabinet. That’s why it always comes as a surprise when vendors call or email to renew.
Those days are gone. The business world is just too competitive. You need to get the most value from your contracts by staying on top of them, renegotiating when you have the opportunity and taking advantage of early-payment discounts.
That can’t happen if key stakeholders aren’t aware of the details.
Contract management: An ongoing process
As your organization looks to get the most out of its investments, you need to capture the full benefits of your contracts. To do so, start thinking of the contract management process as ongoing, not just a one-time activity. As contract renewals approach, that gives you the foresight to evaluate new vendors and the ability to renegotiate terms to get the best deals possible.
Without a closed-loop system or lifecycle approach to managing contracts, you’re missing out on huge opportunities for discounts and savings. In fact, some contracts may auto-renew without review or renegotiation, locking you into terms that favor the vendor.
Most companies spend a lot of time and energy negotiating the terms of contracts, but fail to realize savings because obligations are unknown to people who weren’t in on the negotiations. Also, vendors may not meet those obligations or may fail to honor pricing commitments.
But how would you know – or prove it – if you can’t find the contract? That’s why contract management is important.
Using ECM and workflow to stay on top
A great way to get on top of your contract process is to utilize an enterprise content management (ECM) solution that includes contract management software. The right solution gives you the ability to create automated processes that allow you to easily locate, access, store and route contracts – taking them from start to finish. As soon as someone initiates a new contract request, the ECM solution creates and tracks the contract for its entire lifecycle.
Powerful ECM solutions include workflow software that automatically alerts the right people when contracts are coming up for renewal or termination. The increased visibility into vendor relationships gives you the ability to make decisions based on real-time information, giving you the ability to take advantage of potential discounts and renewal incentives before contracts reach their expiration dates.
The right ECM solution will also have the ability to span across your entire organization, helping with everything from facilities management to IT contract management. Everyone who needs access to contracts can do so with a few simple mouse clicks, so it’s clear what vendors’ responsibilities are, what your responsibilities are and if pricing structures are being adhered to.
Proactively managing your contracts gives you consistent business practices, ensures accountability and helps you comply with industry regulations. It also means you’re capturing the discounts and prices you spent all that time and energy negotiating in the first place – and that helps the bottom line.