One of the critical goals of procurement is to get the highest possible return on investment from firm vendors and suppliers. Contracts serve as binding guidebooks for these relationships and are essential tools for attaining these goals. These provide a roadmap for all procurement agreements, from establishing what goods and services are to be delivered and under what terms to anticipating challenges that may develop during the contract lifecycle.
A carefully structured Procurement System can help ensure the procurement process operates smoothly, be it contract planning or contract execution. While the nature of the commodities or services covered in the contracts may vary, some common challenges must be aware of.
Common Challenges in Contract Management
Even the tiniest things are considered and cannot be overlooked in procurement. Here we bring five common procurement contract management issues to consider.
- Limited Contract Visibility
Many businesses have trouble storing contracts and contract data. Outdated contract storing systems can cause issues. As a result, your company may face increased risk, lose contract control, data leaks, and contract performance issues.
- Managing Contract Workflows
Overseeing contract workflow necessitates interaction with many moving pieces for you and your team. Any delay on the part of your co-workers can put the contract lifecycle to a standstill.
- Contract Tracking
These techniques can be acceptable if your company manages a few contracts. Even so, it’s crucial to remember that contract failure rates will skyrocket as your company’s contract volume grows to the hundreds, thousands, or even millions.
Inadequate procurement solutions can hamper your team’s ability to meet financial targets, provide insufficient security, and expose your company to regulatory and operational risk.
- Unwanted Expiry and Renewal
Unwanted contract expiration is a contract management issue that many large firms continue to grapple with. It might simultaneously affect a company’s financial process in the worst-case scenario. Contract compliance can also become a problem when templates, approved languages and contract terms are not updated or standardized.
- Procurement Risks
There are numerous vulnerabilities associated with procurement, such as subordination, non-compliance, record fabrication, money laundering, and people outsourcing are all risks.
How Can Contract Management Systems Resolve These Issues?
Many contract management roadblocks might impede your company from reaching operational efficiency and possibly put you at risk. While some of these challenges may be small, others might eat into your revenues and make it more difficult to run a long-term business.
Contract management software offers essential input on contract information and service assistance between teams to reduce the costs while posing minimal risks. Here are the top 5 benefits to show how it’s done!
- Enhanced Contact Visibility
Your team’s best option for securely storing and managing contracts is a web-enabled contract repository powered by E-Procurement software. It enables your team to organize accounts, centrally manage rights, promote document version control, rapidly search for stored contracts, track contract statuses, interact effectively, and more.
- Intelligent Contract Workflow Automation
With virtually infinite contract workflow notifications, automated critical date alerts, and task reminders, contract management software offers intelligent contract workflow automation that has reduced contract lifecycle bottlenecks by assigning the desired resources at the relevant period.
With intelligent workflow automation, your business may take advantage of the system and user-defined fields, contract process management, audit trails, and more.
- Intelligent Contract Tracking
With an advanced contract management solution, you’ll have better visibility of contract repository, templates authorization, clause libraries for faster contract drafting, performance metrics, ad-hoc reports, improved collaboration, and complete audit trails.
- Improved Contract Compliance
Contact management software allows businesses to streamline operations and deliver better contract accountability from request to approval. No key terms can be removed, and only the appropriate personnel can alter the document, ensuring you maintain control over your contract.
- Risk Mitigation
Your contract shows that compliance can be improved by enforcing and operating on the most recent terms and conditions. Contract management systems may simplify things to discover and address policy or regulation infractions promptly and efficiently.
Now that you know how to utilize user-friendly contract management software to handle your everyday procurement problems, it’s time to find the most promising and sustainable solution.
Procol is an AI-powered procurement software that helps track and cut costs. It’s no surprise that Procol can meet your needs, given its user-friendliness, sturdiness, and flawlessness. Want to know more? Schedule a demo of our contract management software.