Stuck in a bad contract? Missing out on possible negotiations? Getting the wrong supplier? These are a few of the weapons that dent the armor of procurement professional. With the changing business environment and repeated supplier related scandals, it has become essential for the organizations to manage contracts effectively. So how exactly have the traditional methods developed cracks?

Handling contracts manually meant guaranteed risks and yet it is one of the most widely used systems. Let’s have a look at how the decentralized legacy system of manually handling paper-based contracts is losing the war:

• Compliance

One of the key issues that low visibility leads to is low compliance. In such situations, maverick spend takes charge and often the price paid is different from the price negotiated. Moreover, manual handling also meant that there was no contract repository, thus tracking an existing contract or rather a misplaced contract was one herculean task.

• Standardization

Studies show that a number of failed contracts were made as a result of lack of standardization. Vague clauses/conditions not pertaining to the department, lack of customized clauses, and geographical rules and regulations are the factors that aided the low standardization.

• Long Cycle Time

The paper based approach lead to long cycle times when approvals, negotiations or signatures came into picture. This resulted in unwanted delays leading to long cycle times.

Learn More: Contract Lifecycle Management Software

In our next post we shall look how we can fill the cracks that the legacy systems have bought.

Have you faced a similar crack? Share your views in the comments section below.