It is quite surprising to learn how many organizations don’t have a strategic contract management system in place. Without a system these organizations are creating unnecessary risk and potentially jeopardizing their future. Conceptually these systems are a “no brainer” from a C-level standpoint. The biggest challenge is often based on all of the operating units on board. See if any of these challenges sound familiar:
- Lack of a centralized repository for contracts even at the operating unit level
- Inability to track contract renewals
- Contract abstracts omit key terms
- Contract abstracts haven’t been updated for the latest amendments
- Missing amendments or addendums
- Incomplete list of owner and administrator for each contract
- Turnover of key contacts at major suppliers or within your organization
- And the list can go on and on…
Every challenge on the list will cost your organization time and money. A well-organized contract management system will allow your organization to:
- Negotiate and manage contracts and agreements
- Avoid automatic renewal of unfavorable agreements or any agreement for that matter
- Reduce contract administration time
- Provide a base of standard terms the company will accept
- Easily manage due dates with automatic reminders well in advance
- Assure that contract obligations like fees, commitments and required payments are met in a timely manner
- Quickly access contract data in spend categories to help negotiate renewals or new contracts for similar services or supplies
- Make better decisions because you have better data at your fingertips
With so much to gain I have to wonder why organizations aren’t willing to get this done. Collecting all of the contracts, amendments, addendums and contacts will be a bit challenging but the benefits will be significant. Once the system is in place – maintenance will be a far easier task.
Action Step: What would be next step if your organization needs a full contract management system or an overhaul?
If any of these situations apply to your company then let’s chat for 30 minutes to determine if it makes sense to see an contract management demo. You can reach me at 973-936-9672.
EC Sourcing Group is one of the companies I represent because they help procurement teams deliver quantifiable cost and time savings. If you want to know how, I invite you to request a demo or 30 minute discovery conversation so you can experience the platform, process, people, and tools.
Next week I will continue on this same theme so your organization can improve your bottom line.
If you would like to know more ways to reduce costs without changing the way you do business simply give me a call or send me an email with your contact information and the best time to reach you.
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Until Next Time, I Wish You Great Success in Your Business and in Your Life