A Guide To Contract Management in Procurement

Topics: Contract Management Software, procurement software, Contract Lifecycle Management, Procurement

Written by Lindsey Paulk

A Guide To Contract Management in Procurement

Contract management plays a key role in every procurement cycle. Contracts serve as a determining factor in terms of how business relationships will function between suppliers, vendors, and other partners. It’s necessary for any company to have and optimized, well-planned, and effective approach to contract management in procurement.

Most procurement teams utilize outdated contract management systems. This might look like relying on shared hard drives, email chains, and Excel spreadsheets to oversee the various stages of your contract lifecycles. By using these methods for managing your contracts, you ultimately decrease the efficiency and increase the potential for risk exposure and human error. With contract management software, you can easily get insights on all contract details within moments. Finding answers to information regarding contract expiry and auto renewal dates, supplier performance, fulfilled obligations, payment terms, and SLAs is also very simple with contract management software.

In today’s digitally dominant environment, procurement departments should leverage an online approach to contract management. A cloud secure, all-in-one contract lifecycle management solution provides procurement departments with a way to increase accountability, transparency, and understanding into organizational processes in relation to contracts. Leveraging contract lifecycle management software assists procurement departments and organizations in several ways. For example, contract lifecycle management software will help increase organizational compliance, manage risk, oversee vendor relationships, and reduce costs.

Now, let’s discuss in further detail how contract management software can improve contract processes for procurement departments.

Improve Service-level Agreements (SLAs) and Vendor Management

One foundational component to contract management is visibility. With an appropriate level of visibility within your organization, your procurement department can gain greater insights into supplier performance and relationships. Here at Dock 365, we offer end-to-end contract lifecycle visibility where you can access all contract data, as it is documented within our software solution. Overseeing your contracts and their key dates and terms is easy with comprehensive dashboards, allowing you to manage contracts by supplier and contract type. In addition, a contract management system for procurement can provide you valuable, current contract insights regarding the fulfillment of obligations by your suppliers and much more.

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Track Expense and Contractual Terms With Ease

With contract lifecycle management software, procurement teams can oversee and monitor spending in relation to contracts with suppliers and vendors. Contract data is then collected and displayed in a customizable dashboard where users can develop detailed reports on various contract details. This gives procurement departments the ability to easily and swiftly find answers and gain accurate insights on the data associated with their contracts. Automated, customizable reporting capabilities are excellent for providing procurement teams with metrics pertaining to fulfillment of deliverables and obligations of an agreement by a given supplier – removing the need for outdated reporting via spreadsheets.

Contract lifecycle management software additionally increases the likelihood for compliance to organizational policies and standards due to the ease of managing and tracking contract terms and obligations. In addition, preapproved template and clause libraries increase efficiency and compliance by standardizing legal terminology during contract authoring and reviews.

Increase Accuracy of Your Department’s Budgeting Strategy

Overseeing your contract data in real-time is simple with a contract management solution built for procurement. Software equipped with a cloud secure centralized repository allows your procurement department to effectively plan based on your organization’s budget due to the ability to find detailed contract metrics and data instantly.

Need to adjust your budget around the quantity of contracts pertaining to specific product? You can do so with contract management software. Need to assess the dollar value of your contracts with a given provider? Contract management software makes this possible. To add, a software solution includes dashboards and reporting functions in a single digital database where internal teams can gain quick insight to strategize their next course of action. Lastly, you can manage your organization’s budget by keeping tabs on upcoming agreements that are set to auto renew so you can cancel a given agreement in advance that might not be the most favorable.

Boost Client Satisfaction

Contract management for procurement is much improved by assisting your internal clients with all of the support they need. Managing every step and stage of a contract’s lifecycle can be a smooth and efficient process with software, and this allows organizations to increase the speed and quality of contract lifecycles which results in an improved user experience.

For example, with customizable contract request and intake forms, you can standardize the contract intake process and make capturing key client and contract data simple from the very beginning of the contract lifecycle. Contract management software allows users to centralize communication and collaboration on contracts with redlining capabilities, automated contract lifecycle workflows, electronic signature integrations, systematized contract authoring processes, and streamlined contract approval and negotiation stages. Enhanced visibility of your contracts creates greater transparency on the status, location, and stage of every contract at hand so that you can have all the answers you need to every contract-related question.

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Maximize Preparedness for Audits

Contract management software monitors and tracks changes made to various document versions and contract drafts throughout the entirety of the contract lifecycle (i.e., contract authoring, approvals, and negotiation stages.) This means that users can view a comprehensive, timestamped history of who made changes to what document, in which place, and at what time. In addition, a software solution maintains detailed audit trails so that you can be full prepared for compliance audits.

Oversee the Implications of New Policies

Centralizing your contracts, associating documents and files, and all of your contract data within a digital, cloud-based repository increases the efficiency and security of your contract management processes. You can easily access and search for specific data points and metrics by running filtered keyword searches on items relating to policies and regulations to gain information regarding your contracts and other documentation that might be impacted. In addition, you can search for various clause types and terms to pinpoint exact contracts that will be affected by changes made to regulations and policies.

Never Miss a Deadline Again

Automated notifications and alerts assist procurement departments in maintaining awareness of key contract obligations, auto renewal dates, contract expiry dates, and various milestones. To illustrate, you can enable a notification to be reminded of a given contract’s auto renewal date 30 days in advance. In this way, you have an adequate amount of time to decide whether to keep the contract and allow it to auto renew, or to cancel the contract. By eliminating missed milestones and due dates, you can save money and increase compliance.

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Conclusion

By taking a digital and modern approach to managing your contracts, you can increase the likelihood of contract success for your procurement department. Contract management software allows procurement to increase effectiveness and efficiency due to streamlined vendor management, internal client support, enhanced risk mitigation capabilities, and much more. Dock 365 offers a modern, user-friendly approach to contract management that can assist your organization’s procurement department today. Dock offers affordable and results-driven contract lifecycle management software that uses your existing Microsoft 365 and SharePoint subscriptions.

Learn more about our Dock 365 Contract Management System here.

Learn more about Contract Lifecyle Management (CLM) Software here.

For more information, we welcome you to schedule a free demo with us today.

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