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“Contracts do indeed play an important role, representing a source of economic value for a business. Yet, 30% to 35% of an organization’s contracts under perform. That cost translates to about 9% of annual revenue.” – Tim Cummins, President and CEO of IACCM
However, with the advancement in technology, organizations can redesign the existing contracting process, resulting in better collaboration, enhanced data and analysis and raise the over-all value derived from the contracts. This blog will harp on different aspects of contracts that can be improvised by using technology.
Elevating the Contracting Process with Tech
Writing contracts
Relying heavily on MS Word to write the contract and emails to collaborate with concerned stake holders often results in an extended time cycle and erroneous contract. Technology, when picked and used correctly, makes the authoring process simple and time- efficient in the one way. For instance, use of pre-approved clauses in a format that is consistent with the legal guidelines within the contract templates can lead to having standardized contracts, integration with MS Word, etc.
Negotiating contracts
Contract negotiation is a tricky art. It often is the reason for closing that profit-making deal, just like it can be the reason for the higher price we end up paying the supplier. Negotiation is a major part of procurement executive’s life. Technology has no active role in helping the executive become a better negotiator. However, tricks & tips, cases of previously successful deals can be stored in a repository which, in turn, can serve as a reference point for future negotiations.
Learn More: Contract Lifecycle Management Software
Enhancing the Contracting Process with Analytics, Dynamic Repository
Creating a repository
Create dynamic contract repositories that reflect operational requirements. Having contracts stored at a centralized location drastically reduces lost contract cases. It can also serve as a library for all the legal clauses and contract templates.
Analyzing contract utilization
Contract metrics need to be defined to check the effectiveness and utilization of the contracts or the savings accrued. Ensure that the Service Level Agreements are well-defined in the contracts and set up processes to measure supplier’s Key Performance Indicators by linking contracts to spend in order to establish parameters of measurement, establishing benchmark parameters with regard to peers and industry, and tracking contract performance vis-à-vis these benchmarks.
Tracking contracts
Often during negotiation, both parties agree on terms like price escalation and de-escalation clauses based on market parameters like foreign exchange and commodity indices. However, these terms are often forgotten once the contract has been signed.
Setting a system of alerts and reminders for the specific escalator/de-escalator clauses, linked to commodity or Forex indices or to the renewal date, will help the procurement team to never miss the milestone events in the contract.
Revolutionizing Contract Management with Zycus
Zycus’ contract management software is designed to streamline and enhance the entire contracting process, leveraging advanced technology and negotiation tools. It offers an intuitive platform that simplifies the creation, contract management, and analysis of contracts, empowering businesses to negotiate better deals and ensure compliance efficiently.
With features like automated contract creation, a centralized contract repository, and detailed analytics, Zycus enables organizations to mitigate risks, improve collaboration, and make data-driven decisions. The software’s integration capabilities ensure seamless workflows across procurement functions, enhancing operational efficiency and strategic insights.
Ready to transform your contracting process? Request a demo today and discover how Zycus can elevate your contract management strategy.
Watch Video: iContract by Zycus: A New Era in Contract Management
Related Read:
- Blog – Ultimate Guide to Contract Management: Benefits & Best Practices
- White Paper: The Why, What & How of Contract Management
- AI Contract Management Software
- Contract Management Software
- Analyst Report – Contracts as a Connector – The case for improved contract management
- White Paper – The Why, What & How of Contract Management
- Research Report – Forrester’s Overview Of 30 CLM Vendors – Now Tech: Contract Lifecycle Management
