For every billion dollars invested in the United States, $122 million is wasted on lacking project management performance, a recent study by the Project Management Institute found. Dollars aren’t the only things wasted; inefficient procurement processes costing an estimated 32.2 million man hours a year. Clearly, inefficient sourcing management practices play a significant role in the project management deficit.
Want to mitigate these inefficiencies and maximize the effectiveness of your overall sourcing process? Don’t go at it alone. Find a procurement management platform that has the automation, flexibility, and transparency needed to build sourcing models and enterprise deliverables that provide measurable results and consistent business impact. The positive outcomes of good procurement pipeline management software are far-reaching, supporting strategic sourcing, stakeholder engagement, portfolio prioritization and robust reporting — and contract management tools can do the same for the vendor contract side of the equation, allowing the organization to better manage supplier contracts, eliminate risks, and easily review all data across types, tasks, agreements, end dates, and terms.
To further streamline your sourcing practices, look for a collaborative contract management solution that offers these five key features:
1. A single, collaborative source of truth
As simple as it seems, choosing a sourcing solution that has a centralized repository of vendor contracts is essential to improved contract management efficiency. Not only does a single database enable easy storage, searching, and reviewing of existing contracts, but it also plays a critical role in simplified auditing — which is important for compliance and vendor renewal decisions.
2. Automated data entry
A good solution will whittle down the hours spent on tedious time wasters, like the manual entry of sourcing request and vendor information. Choose a contract management solution that supports automated data entry, where information is transferred from the initial request seamlessly through to the contract — and never requires manual replication of existing information.
3. Custom reminders
Managing suppliers’ individual timelines can be tough — not to mention a huge time-waster. Adopt a solution that lets you set custom reminders, so you’re automatically alerted about contract milestones, like the need to negotiate, onboard, evaluate, renew, manage exemptions, source, or cancel a contract. This will help keep everything on track and ensure that you’re making vendor decisions that work best for your business.
4. Comprehensive supplier profiles
Between myriad supplier and sourcing events, it’s remarkably easy to get bogged down in the details. A tool with comprehensive supplier profiles eliminates manual searching and give your procurement team a complete view of each supplier relationship, inclusive of all relationship activities. This makes it easy to trace projects you previously worked on with specific suppliers and negotiations surrounding those projects.
5. Contract workflow
It’s critical to have an automated workflow. Not only does this eliminate back-and-forth communication, but it also clarifies the process for all stakeholders and helps eliminate missing information. This drives a standard process for your team and vendors and helps your sourcing organization efficiently execute, manage, or discontinue any sourcing event with ease.
Effective contract administration is the heart of standout supplier management — and can ultimately have a huge impact on the enterprise. As Gregg Focht, global indirect sourcing operations leader at Owens Corning, notes in a new research paper by Harvard Business Review Analytic Services, “A small-dollar award can become a multimillion-dollar lawsuit if the right contractual language isn’t in place.” Conversely, when it’s expertly executed, contract management can save money and inform strategic decision-making. By employing a comprehensive contract management solution, your enterprise can increase efficiency for your procurement team and contribute to overall positive business outcomes.