A lot of the noise around contract management is the importance of having all your contract data in one place so procurement departments can have full visibility of all the contracts that are in place with suppliers. It is important that not only your contract data is under control but also your supply chain data.
Supplier relationship management is hitting the top of agendas as businesses are looking to make potential savings and revenue.
It is typical for businesses to stay with suppliers year after year because they are continuing to deliver the job and it is less hassle to stay put than make a change, but failing to review your supplier agreements could potentially make you miss out on a more competitive deal, or cost your business a substantial amount of money in the process.
Large organisations will have hundreds of contracts in place but will not have an efficient and effective contract management processes, thus having a huge impact on business performance, bottom-line and risk.
Not having an efficient and effective contract management process in place means the contracts you have in place with suppliers can easily be ignored or forgotten about. When organisations don’t take control of their supplier relationships and the management of contracts, auto-renewing can become a real issue – contracts can be locked for another year and cost businesses millions in wasted budgets and unintentional spend.
The management of your supplier relationships can provide you with clearer visibility to ensure supplier reviews are carried out in a timely manner, therefore the negotiation for renewal or the creation of new contracts are never missed; as well as intended supplier terminations are not overlooked.
To ensure your organisation’s spend is not being exhausted by a lack of supplier management, contract management needs to be effectively and efficiently controlled to play an essential part in the supplier management process. Bringing together your contracts data and supply chain data in a central repository will allow access to all key stakeholders and the important facts for negotiation.
A central repository, such as a robust contract management system can make the control of contracts and the management of suppliers easy. Functionality in contract management systems can provide you with the tools to alert and notify you to expiring contracts that need to be reviewed so you can get a head start on your negotiation and renewal process.
Technology like contract management systems are enabling organisations to get the control, compliance and savings needed to add value back into business. So don’t be a cash cow to your suppliers because contracts were signed and left to their own devices. Contract management systems are offering a more structured and formalised approach to handle your supplier relationship management process.
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