Core & Complex Contract Management Solution Capabilities
An effective contract management solution will allow a company to manage its procurement contracts that will:
- Mitigate contract risk.
- Ensure contractual and service level agreement compliance through consistent and persistent monitoring.
- Enable centralization of procurement contract management.
- Standardize contract management.
- Minimize contractual management, which will positively affect the company’s profit levels.
- Streamline procurement processes to do with contracts and vendor take-on.
- Provide a responsive alert and flag process.
- Provide supportive management information.
A Contract management solution can range from simple
desktop applications to major modules of purchasing systems. At the
core of each system, are:
- A workflow engine – the more complicated the computer system the more complex the work flow that can be managed.
- A calendar that contributes to the
workflow engine and manages alerts for actions to be taken. A typical
alert would be one activated when a contract is due to expire or an
activity that is contrary to the contract has happened.
- Audit trails to view activity on each contract and vendor.
- Change request activities such as ad hoc contracts and changes to original contracts.
- Management information that produces
management reports and analysis. Again the more complex the software,
the more complex the information that is produced. At a minimum the
information that is produced will include:
- The number of contracts.
- Contacts that are near completion.
- Value of contracts.
- Number of products under contract.
- Communication and interfaces to enable the procurement department to interact with the computer system wherever it may be situated.
While a simple Contract management solution will have
the above as its core, a more complex Contract management solution will
be interfaced with the purchasing, account and inventory systems so that
these systems are automatically updated when any contract management
activity is undertaken.
These systems will also update your contract management
solution. A more complex contract management solution will have one or
more of the following capabilities:
- Contract Library, which will include current, past, and potential contracts that the company uses.
- Sophisticated workflow that interacts
with other company workflow engines. This is made much easier if the
company uses a suite of software solutions such as Oracle or SAP.
- Custom Reporting that can be configured to the needs of the business.
- Contract cost and budgetary tracking so that cost per contract, per product and per product group is available.
- Check lists and milestones to enable easier Service Level Agreement and contract tracking.
- Management of e procurement using enhanced security, communications and methods.
- Text search and OCR to enable finding existing contracts and the fast input of new contracts.
- Vendor relationships be they the same company or international divisions, they can be mapped and remembered.
As with all things in life, you get what you pay for so you should match your requirements to your budget.
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