How To Improve Contract Management In 4 Easy Steps

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In this video, Contract Assistant shows you how to increase the profitability of your company by 9%. How? By improving your contract management.
The benefits of contract management include:

• Spend visibility: Lets you know if you are buying from the right suppliers, at the right times, at the right quantities and prices.

• Risk reduction: Contract management ensures you are on top of vendor compliance and performance so you can take appropriate action if needed.

• Cost Savings: Having a system in place streamlines contract creation, authoring, and the negotiation process, making more it efficient and less expensive. In addition, software solutions have built in alarms that can notify you when unfavorable contracts are due to be renewed. This allows you to renegotiate unfavorable terms and prices.

Then what is the fastest way to improve contract management? Well, it’s actually simple. You need to have just two things:

• All your contracts in one place, so you have access.

• An organized, systematic plan.

Sounds easy, right? Yet shockingly, most companies lack a clearly defined contract management system and it costs them a fortune. According to some experts, many companies incur more than 50% of their costs in contracts. (In the case of the Oil & Gas industry this number can be as high as 70%).

So having an organized solution is essential. But how do you do it?

The first step boils down to going through your entire organization, finding all of your contracts and getting them in one place.

The second step in designing your plan to improve your contract management is to determine how much data you actually need to track in your contract management system. The amount of information you need to have can vary greatly from business to business.

To help you make a better decision, here are four quick questions to ask yourself:

• What is the detail level you would expect to have in your contract management system?

• What is the level of detail that you absolutely must have?

• How many resources would you like to attach to your system?

• How many resources can you afford to allocate to your system?

Answering these four questions will help you come up with a contract management system that you can feel comfortable with, will work for you, and not waste your time and money. If you already have a contract management system in place, you can use the answers to improve it.

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