Increased efficiency built into an organization’s procurement strategy helps it to become more effective. Contract​s form the core of an organization’s procurement activities​. ​Hence, it becomes highly important that ​contract management for procurement departments​ is an efficient and speedy process.

Procurement efficiency and speed demand the streamlining of contract management processes. The Hackett Report states that procurement organizations relying on manual procurement processes should digitally transform their approach to contract management. They need to think about how they can use a robust, cloud-based infrastructure and applications for contract lifecycle management (CLM) to get fast and efficient results.

In this article, we will discuss ways to improve workflow efficiency and speed of procurement by automating the contract lifecycle management process which will help in reducing timeframes, increase visibility, cost control and cost reduction of goods.

  1. Centralize Your Procurement Process

    Contracts when stored in the filing cabinets and hard drives with manual contact management processes bring about an unstructured and disorganized order. In order to find them easily and access them effortlessly, procurement automation helps a lot. It also makes it easier to ensure contract compliance.

    With a cloud-based centralized repository, you can effortlessly get a clear overview of all your contracts. You can monitor the whole process by managing requests, speeding up RFx processes, evaluating tenders and ensuring compliance easily. You can store all your purchase requisitions, offers, and all contracts in one place. It helps you stay informed on the status of all contracts, deadlines, and alerts.

    A contract management solution enables automating workflows and approval processes, allowing authorized users to quickly and easily adjust policies and processes. It provides visibility and streamlines procurement, thereby making it highly efficient.

    Click here to read How Do Procurement People Do Contract Management Today?

  2. Fast Drafting

    With automation, the procurement team can create templates easily for all types of contracts using standard contract templates. This reduces time and error in contract management. Once it is created, it can be sent for quick and easy e-signatures. Using a procurement contract management solution allows procurement teams to act fast and close deals faster than before.

  3. Purchase Requisition

    Automating the purchase requisition process reduces the time taken for requisition as it ensures it doesn’t get stuck in the approval process. It eliminates redundant steps in the process.

  4. Purchase Order

    Automating the entire purchase order cycle process makes it faster to place orders and reduce the ordering cycle time. It enables procurement teams to get work done in a shorter amount of time and helps companies improve efficiency and productivity while cutting down costs. It frees up time consumed for other value-added tasks and strategic sourcing.

    Click here to read Top 5 Most Important Job Functions for a Procurement Department

  5. Vendor Management

    Vendor relationships are crucial for procurement success and this requires clear communication and transparency. By automating, procurement professionals can streamline their vendor selection and choose the best vendor available. It also helps to form a better relationship with vendors by identifying and resolving issues quickly resulting in long-term cost savings.

  6. Invoice Management

    Procurement professionals often deal with poorly managed purchase orders, missing receipts, maverick spending, and submissions when they manually manage invoices. Delayed payments and compliance issues also arise due to manual invoice management. This can affect the relationship with vendors and cost much to the organization due to high invoice processing costs, duplicate payments, late payments to vendors and paying for goods not received. With automation, this process can be streamlined where invoices are approved within set timelines to match purchase orders and goods receipts.

  7. Spend Visibility

    By deploying a procurement contract management solution, organizations get the accurate description of contracts, past purchases, supplier quotes and order history. It enables a consolidated view of actual expenses, streamlines spend management, spend analysis process and ultimately helps achieve cost reduction.

  8. Automated reminders to increase compliance

    Automating the procurement contract management process helps procurement teams to stay ahead of all procurement related actions. Smart reminders can be set to avoid deadlines and alerts to take the needed actions at a given point in time. It also shows the time to renegotiate a supplier contract which is about to expire and never to miss that date.

    Click here to read What are the Top 5 Challenges Facing the Procurement Department Today

  9. Real-time supplier negotiations

    Developing good relationships with supplier networks through means of negotiations plays an important part in procurement. With a strategy in place that is beneficial to both parties involved, negotiations involve contracts. This means emailing documents to reach an agreement. This sending of emails back and forth often results in confusion due to multiple conversations among different people at various points of time. However, by having a contract management solution , negotiations become simpler as everyone is able to redline, edit and give comments in one place.

  10. Digital Procurement Contract Management

    An automated procurement process helps to develop an organization’s bottom line and increases efficiency. According to Gartner Report, contract management software has become a must-have business solution as more organizations are realizing the benefit of automating and storing supplier agreements, sales orders, procurement contracts, and legal contracts digitally.

    The Aberdeen Group Study states that organizations that have deployed procurement contract management software improved their supplier contract compliance and supplier contract efficiencies. Contracts approval time is 45% less when compared to those organizations that have not taken up to automation. According to this study, 56% of best-in-class companies that have adopted automation of the contract process have found effective results and with data and analytics leveraged, it has helped them improve cost savings and system efficiencies.

    For this, it is essential for organizations to have the right procurement tools like CLM platforms a s part of their strategic sourcing systems in order to prevent inefficiencies, reduce time-to-market cycles, improve the speed of the procurement process, minimize risk, and ensure compliance.

  11. Docucollab Brings Greater Speed, Control, And Efficiency To Procurement

    Organizations transitioning their procurement process to efficient practices can ultimately derive effective results. Implementing DocuCollab `s cloud-based CLM software for procurement helps them with contract creation, faster signatures, automated reminders, real-time negotiations, increased compliance and analyze their supplier contracts.

    Having an automated contract lifecycle management platform such as DocuCollab helps maximize efficiency and keep procurement departments working effectively, faster and smarter.

Click here to discover how you can automate every step of your contract management lifecycle through DocuCollab’s seamless contract lifecycle management tools.