The COVID-19 pandemic has left supply chains all over the world in a state of disarray. Now more than ever, antiquated supply chain contract management procedures can prevent efficiency and growth, decrease ROI, and damage organizational reputation in the face of unforeseen and vulnerable circumstances. Don’t let outdated supply chain management methods leave your organization exposed to the potentially detrimental effects of uncontrollable events; establish an ironclad supply chain contract management process for supply chain success.
Meet the Demands of Supply Chain Contract Management
Supply chain contract management can bring several challenges and risks – even without the troubles of a global event. These potential issues include:
- the lack of centralized requisition, contract management, sourcing, and procurement processes.
- poor visibility and the ensuing misplacement or loss of contracts, agreements, and purchase order documents.
- unsatisfactory tracking of receivables and deliverables, which can result in duplicate orders, unplaced orders, and failure to make payments for goods and services.
- inefficient collaboration.
- missed key dates and milestones.
- compliance and regulation breaches.
- a damaged reputation due to improper supplier selection.
- and much more.
To avoid the problems listed above and be prepared for unknown conditions, organizations need to enlist the aid of a source-to-contract management solution that equips them with technology that integrates contract management, procurement, and acquisition processes.
Organizations must save time, preserve their reputation, and control costs with a one-stop solution that permits them to analyze supplier selections, accurately track financials, and manage items and orders. They need full visibility of contracts and other relevant documents to avoid contract lifecycle bottlenecks and loss of critical documents. They must have a platform that helps with authoring documents, contract writing, RFx management, collaboration, key date awareness, supplier awards, contract closeouts, and compliance.
Leading supply chain contract management solutions can assist with the above needs – keeping organizations covered through various situations.
Integrate Contract Management, Sourcing, & Procurement
A process that does not consolidate contract management, sourcing, and procurement can be disorganized and lead to a litany of issues – such as those detailed in the bulleted list above.
Luckily, advanced contract management software supports the integration of a host of processes – such as contract management, contract writing, sourcing, and procurement processes. Thus, organizations are equipped with a one-stop resource to meet their supply chain and other source-to-contract management needs. Organizations can integrate supply chain management with other processes such as contract management, intelligent workflow automation, rules-based approvals, purchase requisitions, automated bid advertisement, item management, electronic signatures, searching and reporting, supplier tracking, inventory and fulfillment tracking, and much more for a unified supply chain contract management procedure that prepares them for the inevitable.
Improve Requests & Bid Advertisement
Manual request document creation and bid advertisement executed without the help of leading contract management software may leave organizations struggling for a way to streamline bids.
With cutting-edge source-to-contract management software, organizations can create and oversee templates and versions with the help of a pre-approved clause library that allows for easy merging with request data fields. From there, teams can rapidly create documents for requests and export them to standard file formats such as MS Word and PDF. After a request record is complete, organizations have the choice to advertise bids publicly or do so by invite-only, accelerating the process of finding a supplier. The easy steps mentioned above are performed electronically and, as such, are virtually pandemic proof.
Clarify Criteria for Supplier Evaluation
It can prove challenging to award adequate suppliers for an organization’s needs. With a flawed process for establishing supplier criteria, assigning weight to specific supplier criteria over others, and rating and scoring prospective suppliers, organizations can be met with insufficient supplier selection.
Organizations can support a suitable supplier selection process with supplier scorecards and response ratings. These tools can help organizations to award the most appropriate supplier aligned with their needs. Thanks to bid rating weight control, organizations can set specific response criteria over others when scoring supplier bids. As such, organizations create a process that reduces regulatory and compliance issues, assists organizations in managing budgets effectually, and virtually ensures selecting a proper supplier despite world events.
Amalgamate Contract Storage
Organization-wide contract oversight, awareness, and collaboration are necessary for proper contract lifecycle management. When contracts are stored within disparate file paths, emails, and physical filing cabinets, organizations can increase the risk of losing contracts and versions and overlooking notifications, alerts, and more. Processes reliant on local systems and physical assets can be potentially disastrous in the face of a global event such as COVID-19. Teams and departments lack transparency and unification, causing confusion with myriad contract management tasks involved.
The cure to this outdated practice is a centralized contract repository with user-friendly contract management software. Organizations can organize, store, and track supply chain contracts and relevant documents, quickly locate legacy contracts, maintain version control, track approval statuses, perform internal and external collaboration, and more. Furthermore, authorized users can obtain contract management reports for enhanced contract analytics.
Written reminders can be a thing of the past, thanks to comprehensive CLM software. Workflow bottlenecks and delays can be evaded with the help of task escalation. When necessary parties do not perform their tasks on time, multiple fail-safes can be put in place to virtually ensure task completion.
Move Beyond Error-Prone Contract Financials Tracking
Transparent tracking, analytics, and management of financial data are critical for a healthful budget, the comparison of purchases completed to the terms and conditions detailed in a contract, and the eradication of excessive supply chain spending. A procedure for financials tracking that forces teams to manually set thresholds, use spreadsheets to track budget changes, and keep financial documents stored in indiscreet locations is not only lacking in proactive crisis preparation but can also cause:
- data leakage.
- a lack of financial unity between contracts.
- financial tracking errors.
- superfluous spending.
- and much more.
Luckily, scalable supply chain contract management software permits teams to sync contract budget records with relevant purchase order records. This integration unites supply chain with purchasing, and serves to promote data visibility for improved financials tracking and reporting.
As line items are included in purchase order records, amounts for purchase orders will change accordingly. Next, robust contract management software offers percentages of total budgets a given purchase order represents. The useful feature helps organizations to compare purchases implemented to contract terms with ease. As such, budget changes and user activity are recorded.
Software system admins can establish thresholds for approver and requestor spending. The feature permits admins to verify the budget percentage used by employees, as well as what the budget has been used for. Administrators tasked with overseeing supply chain contract financials are thus empowered with greater oversight and governance over employee spending permissions. After an employee user reaches their set budget limit, they cannot add or approve ensuing purchase orders. Hence, organizations can rapidly decrease unauthorized supply chain spending at the employee level.
Strengthen Compliance Management
Appropriate compliance management is paramount. Managing a vast array of regulations and compliance requirements without the help of reporting metrics, a simple way to observe key dates, and a seamless way to gain insight into the relationships between contracts can leave organizations at reputational, contractual, legal, and financial risk – especially when an adverse global event is added into the mix.
Thankfully, leading-edge contract management software offers a diverse pool of features for supply chain compliance management. Reporting visibility and transparency equip organizations with a crucial understanding of contractual relationships with robust audit trails that catalog changes made to contracts.
Sector-specific regulations and compliance expectations, such as code of conduct compliance and anti-corruption rules, can be overseen with alerts for key date, milestone, and renewal opportunity requirements as well as advanced reporting. Software users can configure the ways they take in essential information with a user-friendly online report designer.
Supply chain contract management software helps organizations to feel confident in their observance of standards and laws.
Employ Leading Supply Chain Contract Management Software
Now that you are aware of why you should trade in antiquated supply chain contract management methods for those that can keep your organization productive through good and uncertain times, it’s time to implement an awarded source-to-contract management solution for your organization’s specific needs! That trusted solution is CobbleStone Software’s Contract Insight®!
Contract Insight is a user-friendly, secure, and scalable contract management software solution that provides future-minded supply chain contract management tools, comprehensive contract lifecycle management, better procurement, improved eSourcing, and enhanced purchase requisition. Since the mid-1990s, CobbleStone Software has been lauded by public organizations and those within the private sector as the go-to leader in source-to-contract solutions.
Learn more about CobbleStone Software’s Contract Insight by booking a free demo today!