Executive Summary

Contracts underpin every aspect of business operations – from supplier agreements to banking relationships. Managing them efficiently can save money, improve performance and reduce risk.

This article explores the benefits of contract management software, including improved visibility, better financial control, enhanced compliance and greater operational efficiency.

Procurement and Contract Management: Why Software Matters

Contracts form the foundation of every business relationship. Whether it’s the terms of your bank account or the agreement with your largest supplier, effective contract management ensures smoother operations and reduced risk. Understanding the benefits of contract management software can help your organisation save money, improve compliance and streamline procurement processes.

For public sector organisations, the Procurement Bill introduced earlier this year sets out in law the fundamental principles of public procurement. Once the legislation is passed, organisations will be under a legal obligation to procure effectively and managing contracts properly will play a critical part of staying legally compliant.

Procurement and Contract Management – A Technology Based Solution

For many organisations, contract management has been a manual process, often spreadsheet driven and unable to provide the transparency required for informed decision making. Even the smallest business can have hundreds of contracts in play and investing in contract management software brings multiple benefits.

The Key Benefits of Contract Management Software

Improved contract visibility

Storing your contracts in a central repository makes it easier to view your contracts, monitor performance and create reports to help you manage your suppliers. Centrally storing contract templates will also ensure you are working from the most current versions.

Financial optimisation

Contract management software not only helps you to track the costs associated with your contracts, it can also help you to negotiate better deals with your suppliers. For example, your business departments may be using different suppliers for the same products or services.

If instead you choose a single supplier you may be able to negotiate a better price for a larger purchase. Having a digital contract management system also reduces the opportunity for maverick spending.

More effective risk management

minimising risk is critical in procurement and contract management software enables you to improve compliance to contract terms. With clear visibility of contract performance, you can quickly take action when issues arise, reducing the chance of non-performance or incurring increased costs. You will also have a clear audit trail of communication and activities for compliance purposes.

Increased operational effectiveness

A contract management system will track milestones and allow you to schedule automatic alerts or notifications, improving workflow efficiencies.

Routine admin tasks can be done automatically and searching for information within contracts is achieved quickly and easily. Templates speed up contract creation and automating the contract approval process reduces approval times considerably.

Enhanced renewal cycle

Not managing the renewal of a contract properly can lead to increased costs or paying for a service you no longer require. Your contract management software will automatically alert you when a contract is due for renewal. You can then renegotiate terms or put a contract out to tender again should you be unhappy with a supplier’s performance.

Compliance and audit ready

Using contract management software helps you to remain compliant and simplifies audits. You can easily produce audit trails showing the history of each contract when required.

Automatic version control allows you to see which users have made amendments to each contract. You can limit who has read/write access, so commercially sensitive contracts are controlled on a need to know basis.

Why Investing in Contract Management Software Matters

The implications of poor contract management are far-reaching, ranging from reputational damage to financial penalties for breaches.

By adopting a technology-based approach and understanding the benefits of contract management software, you can improve financial performance, enhance compliance and reduce risk.

Ready to Take Control of Your Contracts?

Discover how the right contract management software can transform the way you work by saving time, improving visibility and protecting your bottom line.

Get in touch with our experts today to find out how we can help you implement a smarter, more compliant contract management process.