Given today's rapidly changing landscape, companies need to realize that optimal contract management strategies should incorporate the use of state-of-the-art tools and apps, and employ better routines for supplier and purchase management. It involves not just reducing costs but also lessening dependency on key personnel.
Here are some of 2024's best practices for modern contract management
Create a Centralize Contract Storage
It is common for contracts to be stored in various places such as physical folders, PCs, servers, or even employee inboxes. This not only makes maintaining control over contracts difficult but also risks losing valuable data when employees leave.
Instead, you must implement a centralized contract life-cycle management tool, that is preferably in the cloud or installed on-premise.
Implement Automatic Notifications
Harness technology that ensures timely notifications about impending contract renewals and expirations allowing for proactive management.
Understanding the Financial Impact of Contracts
Make informed decisions by understanding the financial implications of each contract. Be aware of the commitment time and possible ongoing costs even after the contract ends.
Leverage digital tools to help map contract costs and revenues into your company's budget and forecast models for effective financial management.
Maintain Comprehensive Documentation of Your Suppliers
Organize and regularly update all documentation related to contracts, suppliers, and other related entities. These should be easily accessible and up-to-date.
Embrace Digital Transformation With Electronic Signatures
Fully implement digital transformation in contract management - from reducing manual handling of data to enlisting e-signatures for contractual agreements.
More Considerations when choosing a Contract Management System
When considering contract management solutions, it's important to keep in mind that even the most user-friendly systems may require personal services. To ensure success, extensive services should be offered, such as guides and in-person assistance, to meet the needs of all users.
To ensure that your chosen contract management system is always meeting your ongoing needs, it's essential to choose a system that is backed by open APIs, integrations, and a solid partner ecosystem. This will allow for a smoother transition into a more efficient contract management strategy.
Additionally, it's important to consider contract life cycle management as an integral part of many business processes. This means that technology, systems, and employees must work cohesively together to achieve success.