Contracting Strategy that Supports a Contracting Management System
Almost every company or organization has some Contract Management System in place. These systems are usually designed to increase efficiency, reduce risk and boost the bottom line by keeping track of contract milestones. However despite having a Contract Management System in place over 90% of companies do not have a Contracting Strategy that supports the system. Because there’s little to no strategy behind their Contract Management Systems, many companies’ Contract Management is inefficient and most often hurt the bottom line. These types of companies who does not invest in a Contract Strategy are not only at risk of losing revenue, but of being noncompliance as well.
Listed are the top 10 ways Contract Management can fall short and how to start putting Strategies and process in place:
- Lack of Executive buy-in for the critical importance of Contract Management
Counter Action: Executives, give attention to Strategic Contracting System that works.
- Missed Deadlines, Payments, Renewals and Obligations
Counter Action: Fulfill fiduciary responsibilities to countermeasures fines and possible terminations and lawsuits, pay attention to the administrative areas.
- Approval Process Weakness, Bottlenecks, and Rogue Contracts
Counter Action: Ensure approval process are effective and efficient.
- Reliance on Paper-Based Systems or Simplified Document Repositories
Counter Action: Ensure documentation is organize, control and visible is part of effective Contract Strategies
- No Contract Analytics or insight for Empowered Decision Making
Counter Action: Insight on Contract Performance will ensure your Contract Strategy is working
- Duplication of Effort
Counter Action: Duplication of Effort should not be used incorrectly
- Keeping a Contract Management System Isolated from Other Enterprise Applications
Counter Action: Integrating contract management system with other enterprise applications will provide significant value add
- Poor Compliance Procedures
Counter Action: Ensure that contract terms are fulfilled and that transactions are executed to the letter is a key component of mitigating contract risk
- Inability to Automatically Execute Pricing Incentives with Accuracy
Counter Action: Employ complex promotional pricing in contracts to drive profitability and market share
- Paper and Ink Signatures
Counter Action: Incorporate e-signature, e-signature create greater visibility, data access and stronger client relationships, all which quickly add up to increased profitability.