A basic tenent of Sarbanes Oxley is every that every transaction should be approved,stored and reported. Yet a staggering number of fortune 1000 companies do not have contract management tools in place. The retail industry is at least that bad. And we wonder why retail profitability continues to be a challenge.
If you put a bunch of senior executives in a room and ask them what they would like in the way of contract control; the meeting could last weeks. At the end of that time you might not have anything that resembles what you started looking for. And that is why we have the saying that a camel is a horse created by committee.
Most contract management systems have relatively short ROI periods. In fact a company might even be lucky enough as they go through their data collection process to find a single contract that when analyzed might pay for the entire system.
There are all sorts of benefits associated with using contract management software. Probably the most important and least recognized of which is finally having all spend data in one location enabling more effective negotiations. If you have ever run an e-procurement event and tried to assemble a simple specification or incumbent supplier data you already understand the time involved. Administrative costs alone can be reduced by 25-30%. That’s a huge number in today’s world of insufficient staff.
If you want to get started, here are some basics that a system should be able to provide.
1. Create contracts
2. Maintain contracts
3. Control contracts
4. Track user access to contracts
5. Track and monitor the status of contract Meta data
a. Award date
b. Contract begin date
c. Contract end date
d. Begin delivery date
e. Escalator language
f. Notification clauses
g. Termination Clauses
6. Automatically alert buyers and management of required actions
7. Custom Reporting
8. Supplier Scorecards
If you want to get started tomorrow, contact SafeSourcing and ask about SafeContract™.
We look forward to and appreciate you comments