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Defending Contract Management in 2013 Budgets

Budgets for 2013 are under tough scrutiny, and procurement teams are defending how each technology, including contract management systems, impacts the bottom line and overall business strategy.

At first glance, someone outside of the sourcing department may think that contract management is only about automation and reducing administrative burden. However, here are three new ways that showcase the versatility and value of contract management in the electronics industry.

  1. Addressing the conflict minerals dilemma: Last month’s SEC ruling forces companies to delve deeper into the supply chain — down to the specific country and facility of origin for what are now officially classified as conflict minerals. Contracts should be a starting point for this, and the biggest asset for requiring this level of disclosure in the future.
  2. Exceeding supply diversity quotas: Some of the most successful companies embrace supplier diversity far beyond what the federal government requires. They contractually obligate core suppliers, as well as Tier 2 and Tier 3 suppliers, to source a subset of what they sell from diverse suppliers.
  3. Bringing more spend under management: Not all contracts are up for renewal come budget time. And without a system in place for reporting when terms are up, the contracts tend to roll over, and organizations miss a crucial opportunity to reevaluate the spend and negotiate better terms.

Are you feeling the budget pressure already? I’d also like to hear about any outside-the-box benefits of contract management.

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