Cost reduction and managing risk remain the top priorities amongst procurement organizations today. One area that organizations should look to help reduce cost and risk is within their contracts. While some businesses have embarked on the journey of digitally transforming their contract lifecycle management (CLM) processes, there are still several teams who continue to rely on paper-based processes to create and manage their contracts.
Below are some of the key benefits that organizations receive through implementing a contract lifecycle management software to streamline and automate their processes:
- Streamline and Standardize Contract Authoring
Time is money, and that is especially true when creating a contract. If you have ever built a contract from scratch, then I’m sure you know how much time and effort it can take. By digitizing the contract lifecycle, organizations can save precious time by streamlining and standardizing the authoring process. Contract authors accelerate the creation process by leveraging built-in, pre-approved templates and other time saving functionality like clause libraries (i.e. pre-approved legal terms specific to a type of contract), allowing them to quickly create contracts that are legally-compliant and don’t require time-consuming legal reviews.
Additionally, users can increase collaboration between cross-functional parties with modern CLM systems. Stakeholders are able to work on the same contract with an approval workflow, and built-in collaboration for faster contract creation. One key function of Oracle Procurement Contracts Cloud is its ability to shorten the negotiation process. Redlining and subsequent revision can add considerable time with back and forth negation. There are always changes that need to be made to a contract, so handling redlining in a more expedient manner is an important step that allows them to better manage the process. This feature also provides stakeholders with a complete audit trail of every single contract update, enabling them to keep track of every step of the authoring process and approvals. Oracle Procurement Contracts Cloud is also integrated with DocuSign, which provides a seamless signature process, enabling users to digitally sign and execute contracts faster.
- Improve Visibility
For many organizations, contracts continue to be split between several global locations. Since many businesses still rely on paper-based contracts that are stored in filing cabinets or an electronic version on someone’s laptop in their back office, it can be hard to track down contracts, especially those located in other departments. According to the recent Hackett Group report, Raising the World-Class Bar in Procurement Through Digital Transformation, one of the benefits of implementing a contract lifecycle management (CLM) software includes “… reducing the amount of time required to find a contract by 52%.” By implementing a platform with full contract management capabilities, organizations are able to increase the visibility and management of their contracts by electronically accessing them. By having a single location for all contracts, it increases the productivity of your employees by allowing them to locate the document they are looking for when necessary, improving their productivity. Oracle Procurement Contracts Cloud provides a repository that centralizes all existing contracts in to a searchable repository so stakeholders are able to easily access their documents, increasing visibility across the board.
- Reduce Risks and Ensure Compliance
When organizations deal with hundreds of active contracts, it’s almost impossible for them to keep a close eye on them. One significant challenge that can arise is keeping track of expiring contracts. In the Hackett Group report, a modern CLM system also trims “the number of lapsed reports by 39%, and increasing the use of standard terms and conditions to ensure compliance.” Managers need to make sure they are notified about expiration dates so they can decide whether to renew an existing contract or renegotiate/terminate contracts that are unfavorable to their organization. In order to relieve organizations from this issue, Oracle Procurement Cloud Contracts sends automatic alerts when a contract is about to expire, ensuring no contract gets forgotten and proactive measures are being taken.
All in all, an automated contract lifecycle management system is not just a want, but a necessity for procurement organizations that need to streamline and manage their contract lifecycle management processes. When organizations do not effectively manage their contracts, it can leave them exposed to unnecessary costs such as contract leakage, increases in maverick spend, paying additional costs that negatively impacts their bottom line, and can even damage their relationship with their suppliers. By implementing a modern system, such as Oracle Procurement Contracts Cloud, organizations are able to streamline their full contract management cycle, allowing customers to get the most value out of their contracts while avoiding contractual risk.
For more information on the capabilities of Oracle Procurement Contracts Cloud, click here.