5 steps to better contract management
- 07 Apr 2017
- Spend Management
We’ve all been there – when you found out you were hit by unexpected costs, or locked into poor pricing and service terms, and it was too late for you to do anything about it. In this blog we look at 5 steps to better contract management.
As a procurement professional, you’re expected to efficiently manage the contract life cycle from the cataloguing, creation and execution of contracts right through to their renewal (or termination). Without the right tools in place this can be a nigh on impossible task when you’ve hundreds of active contracts running across your entire organization. If you’re still relying on good old spreadsheet, email, shared drives and filing cabinets, then read on! In this blog, we’ve listed 5 ways you can manage your contracts more effectively and efficiently, so you can cut costs, maximize contract performance and reduce contract risks.
1. Out of the filing cabinet, into the cloud
How many hours do you spend searching for the information, sieving through papers and files? It’s time to move on – organizations are automating and improving their contractual processes so they can adopt a more formal and structured process to manage their contracts. Using a cloud-based repository, you can store everything in the same place giving you access to any contract related data with just a few clicks.
2. Standardize your contract information
It’s important to keep your contracts accurate and information rich. A good contract manager should keep track of all the addendums and any historic information in order to maintain a complete and clear audit trail. Instead of having different information in different formats, it’s much better to develop contract management standards. For instance, by implementing standardized metadata you can quickly classify contract types, dates and description etc., using filter functions. You can also search for the information you need quickly and easily.
3. Set up alerts and reminders
When your organization signs a contract, make note of the key dates so your calendar can automatically remind you when you reach specific milestone. For example, a renewal reminder will remind you when it’s time to review or renew the contract, preventing your agreements from rolling unchallenged from year to year. This can be done easily with a Contract Management system, which is usually capable of sending out automatic alerts to notify the right person in the organization. You can also set up KPIs and milestones to trigger alerts, ensuring that the right person is following up the right task to ensure project progress to minimize non-performance risks.
4. Ditch approval by email
A lot of the time businesses are still relying on unstructured, inefficient and not auditable processes to create or edit contracts usually involving email and a version control nightmare in waiting as multiple stakeholders make independent edits and send different versions around. The problem is magnified when it comes to large organizations, where even more departments need to have a say. You can streamline this process by mapping out the approval hierarchy, which can help you identify a clear approval, negotiation, renewal and termination process. With the latest Contract management system, it can remember your business and approval structure, which can then automatically trigger the delegation of authority, eliminating approval bottlenecks and reducing the contract cycle time. It also comes with workflow management tools for easy editing, tracking and version control, making collaboration effortless.
5. Control access
Centralizing all your contracts means that employees can access any documents whenever they need it, making collaboration easy. However, it is also important to set up controlled access to certain documents, such as sensitive and confidential information. For instance, Medius Contract Management can map the access model according to your business structure, allowing you to segregate permissions easily so that only the people with the right privileges can access the desired information. We enable organizations across the world to manage tens of thousands of contracts, helping them boost business efficiency, productivity and achieve better contract terms. If you would like to discuss various options to manage your contracts efficiently, get in touch and we’d be happy to help!