Last updated on October 10th, 2019 at 08:48 am
The long-term financial viability of your company depends on having an efficient procurement process. Without strong relationships with vendors, and reliable flow of their goods and services, it is impossible to compete in our fast-paced economy.
The heart of your procurement management system is the effort to secure reasonable prices on high-quality goods and services. This means your procurement management efforts are inseparably linked with your contract management efforts.
You can improve the core of your procurement management efforts through making improvements to your contract management process.
Make Relevant Data Easier to Find
Data is your company’s most valuable asset. However, it isn’t all about your customer data. The information you have about different vendors, your supply chain, and your operational capabilities are also critical to the success of your organization.
However, many companies have no system for organizing all of this data. Instead, the information is locked away in file cabinets or a variety of different folders on a server somewhere.
It would be best if you had a centralized data repository to make procurement data easier to find.
The easiest way to accomplish this is to use a cloud-based contract management system. This software will automatically keep your contracts organized and provide you with a single, centralized place to go to search for key procurement data.
Instead of relying on the memory of a shipping clerk or a contract manager, you can take advantage of cutting-edge AI and search technology to find exactly what you need in seconds.
Make Audits More Efficient
No company is perfect. There will always be ways to make systems more efficient and profitable. The best way to find systemic problems and improve your procurement management is through regular audits.
However, if your contracts are a decentralized mess, audits will be lengthy and expensive.
Improving your contract management will make your audits more efficient. It will be easier for the audit team to find all of the relevant documents and to review the key data points.
When audits are more efficient, they are less expensive, and their findings are easier to implement.
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Lower Risk Profile
Business is risky. One of the primary responsibilities of both the procurement management team and the contract management team is to identify risks and work to mitigate or allocate those risks.
Because procurement management and contract management are so intertwined. Even the smallest improvement in your contract management practices will lead to improvements in your procurement management.
Investing in an efficient contract management system will lower your company’s overall risk profile. It will lead to fewer contract compliance issues and make it easier to monitor the performance of contracting partners.
Instead of waiting for annual audits to uncover issues, weekly or monthly reports can be run to help monitor the progress of procurement and fulfillment contracts.
A robust contract management system takes all of the guesswork out of procurement. The answer to almost any question about vendor or contract can be answered almost instantly.
If your company doesn’t yet have a modern cloud-based contract management system, your procurement management is not going to be competitive with everyone else in your industry.