Contract Management helps you to know “Who, What, Where, When and Why”

Authored by Usama Shahid

For every Procurement Department, Contract Management plays a vital role. After the issuance of Purchase Order, it helps procurement team to accomplish the agreed deliverables mentioned in the Purchase Order. It also acts as a bridge between the Legal and Supply Chain Department to operate as single entity.

Last weekend, we had a wonderful gathering with the bunch of folks from Legal and Supply Chain Departments. They randomly started discussing about connection of Legal Department with Procurement Contracts. They have mentioned some interesting points about the importance of Contract Management to help legal department in Procurement Contracts.

 Mainly we use term “More With the Same” actually this term sums up all the idea, just by utilizing Contract Management via Supply Chain Department can derive more benefits from the same resources without adding any additional cost.

With increased growth in Supply Chain activity, Legal and Business risk pressures also increase. In all this, legal departments struggle to keep up with and this becomes one of the biggest factors of delay in Procurement Contracts.

There are several ways in which Contract Management support the legal aspect of Supply Chain Department and Business:

• Increase Legal Productivity: Contract Management solutions help increase legal productivity by enabling the efficient creation, negotiation and approval of contracts by automating the process and only involving the correct and necessary legal resources in contract reviews and approvals. 

• Gain 100% Visibility: A Contract Management solution allows CFOs, CPOs to gain 100% contract visibility. That includes visibility into what is happening with a contract at every stage of its life cycle. Thus it ensures spending less time on monitoring and more time on analysis and action to mitigate risk and ensuring compliance. 

• Automate the Whole Process: Contract Management solutions allow legal departments to automate and streamline the Contract Management life cycle from creation and execution. With contract management, organizations gain productivity in managing existing contract obligations and deliverables and faster turnaround when responding to executive and stakeholder queries.

•  Monitor Vendor Performance: With the help of Contract Management performance of supplier can be measured by  monitoring contracts, compliance, amendments, analysis and renewals of contracts.

• Review Right Agreements and Provisions: Companies can extend value and conserve resources by using the solution to ensure that the right people are reviewing the right agreements and provisions.

• Empowerment to Measure:  Empowers you to know “Who, What, Where, When and Why” – for every contract across the global business this derives tremendous benefit across a variety of Legal and Supply Chain functions.

The contract management is a powerful tool for enforcing and facilitating the use of best practices. Additional value comes not only in efficiency, but also in Cost Savings, Improved Compliance and Contract Visibility, Improved Internal and External Communication and Collaboration, along with other areas.   

Contract Management allows users to Create Pre-approved Agreements through an Automated Process or with Standard Contract Templates. Template of contracts will save the legal department countless hours of review and approvals. Template could be passed by Legal Department and pre approvals for specific contracts can be taken to avoid the delays in procurement process.

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