How to Streamline Procurement with Contract Management Process ?

What is Procurement?

Procurement, to break it down in layman terms, is a process of acquiring goods or services from an external source(s), which will help create the final product.

Buying v/s Procurement.

There’s always a mass confusion between the terms _buying _and procuring.

One straightforward difference would be, acquiring a raw material (or support) to create a final product (or service) is Procurement. Getting the final product would be buying it.

How a contract will help in Procurement process?

In order to come to terms with the involved parties for procurement, both parties must agree on a contract.

Creating a contract and a contract management process not just helps you in streamlining the process, it also defines the scope of the work, and binds both of the parties legally on pre-decided terms.

Procurement Contract Softwares

Procurement software and a management process for contracts will ensure that you stay out of any legal trouble in the procurement process. This work is aided by a capable team of contract management professionals who are supported by an effective contract management system.

Contract managers work with various types of contracts in a company. All contracts are equally significant and vital for the organization to run properly. Contract management software helps them reduce errors, improves communication, and streamlines the procurement process.

The procurement contracts are important for any company to make sure that essential services are delivered on time. It is critical that these procurement contracts are carefully structured to account for fluctuating raw material or logistics pricing. Procurement contracts require precise timing on both sides of the agreement in order to be profitable. A benchmark set price and a maximum price variation are frequently included. Contract managers can’t remember all of this information from dozens or hundreds of contracts.

Hence, a contract management process with the help of procurement software can make your life a lot easier.

Errors in manual contract management

Expiration Date Error

One of the most typical errors in manual contract management or procurement management is failing to include an expiration date on the contract. This may not cost a small business millions of dollars, but as your company grows, so does the amount of contracts. As the number of contracts increases, so does the number of vendors in your supply chain. Contract administration becomes tough to maintain accurately without the usage of contract management software. Expiration dates are not observed. Fines build up over time. Problems multiply.

Expiry date notifications are given to relevant party decision-makers using a digital contract management system that provides automated notification on crucial dates. Your supply chain vendors have access to your contract management system’s vendor portal. For all sides, this is a win-win situation.

Risks of poor confidentiality

You run the danger of compromising confidential contract papers if you don’t have a binding procurement management procedure and contract management system in place. You can centralize all of your documents and control access to them with the help of a contract management system. This reduces the likelihood of data leaks or unwanted access.

A contract management system’s contract templates can also safeguard you in this situation. Ensure that both parties participating in the process have discussed and agreed on the parameters. Changes to the contract can be made in your contract management system and communicated to all parties involved. Contract documents include sensitive information. When the contract management system runs on a Microsoft SharePoint tenant, the data is encrypted. The document repository and access controls are excellent with this combo. Monitoring is done automatically so you don’t have to deal with the headache of potential lawsuits if your data is hacked.

The procurement process, like any other contract management procedure in the firm, should be accorded equal weight. Many businesses believe that prioritizing the procurement process is a sensible move. Every step of the contract management process, from bidding and negotiating to closing the deal, necessitates the meticulous attention to detail that comes with a top-rated contract management system.

Automation and Digitalization of Procurement

The procurement division spends a lot of effort developing requests to replace existing stock. These administrative tasks are a drain on resources, limiting the amount of time available to consider new ways to improve procurement efficiency. To help organizations overcome this barrier, digital procurement provides an automated framework for dealing with these time-consuming yet easy processes. RPA (Robotic Process Automation) aids in the repurchasing of items by utilizing stock data and previous purchase data. This reduces human interference, resulting in fewer errors and more effective resource allocation.

Not only can digital procurement automate the ordering process and boost procurement experts’ efficiency, but it can also smooth out the process from order to payment, eliminating the possibility of human error.

All of the aforementioned benefits can be realized if your company implements automated procurement software. The goal of digitization in every business throughout the world has been to eliminate human error so that teams may operate more efficiently and create greater outcomes. The digitization of contract management not only eliminates the possibility of errors, but it also consolidates all contract documents into a single, easily accessible repository. From contract document preparation to signing, and all in between, an automated contract management system can help.

Adhocs of Procurement management software

With the process of going digital getting simpler to configure, set up without the need for any code changes or labors inputs more and more people are shifting towards digitized and automated contract management software.

1. Not just it is easy to set up, it shows you the analyticsSaving you thousands of hours by providing a supplier portal to manage communications, transactions, and issue resolution.

2. Instant access to dataInstantly view any information regarding suppliers with central dashboards of all supplier activities.

3. Insights Insights InsightsSmart spend insights – Procurement data presented simply and concisely to drive actionable insights.

Vendor performance analytics – Track orders, compliance, delivery quality, and other key vendor performance metrics.

4. What gets tracked, gets improved.Customizable reports – Generate instant reports with customizable parameters for the insights you need.

One stop solution for automated procurement management.

Using a contract management system that is integrated with your company’s procurement processes will reduce operating expenses and time consumed. For a free demo, contact Procol, the next-generation digital procurement software.