The National Contract Management Association conducted a survey of over 100 companies across the areas of visibility and access, contract creation, obligation and commitment management, and contract risk management. The results revealed that companies are not using efficient contract management processes, resulting in lack of visibility, poor contract creation, missed obligations and commitments, and increased risk. The results seem shocking, but then again may be not. Perhaps, the results reveal what we already know to be true: many companies find it difficult to efficiently manage their contracts.
In this post, we will review some of the results as well as tips to help your company manage contracts with ease.
In the survey, 81 percent of participants disclosed that finding their contracts was a major concern, while 71 percent believed some of their contracts were lost. The survey also revealed that nearly half of the respondents use paper contracts, which, undoubtedly, contributed to the large amount of respondents that said some of their contracts were lost.
Tip: Help alleviate the stress of losing contracts by investing in a contract management solution that allows you to access contracts quickly and easily.
- Storing contracts in an electronic repository eliminates the risk of losing contracts.
- Users will be able to access contracts with ease.
- An efficient solution will enable you to quickly locate specific terms and clauses within contracts.
- Analysis capability allows you to search and analyze all contracts.
Out of the respondents, 45 percent admitted to being dissatisfied with their current contract creation process.
Tip: Invest in a contract management solution to automate the contract creation process.
- Automated workflow helps the routing and approval process run smoothly.
- Use a solution to create standard templates and language.
- Automatic alerts help identify potential changes and updates for approval.
Obligation and Commitment Management:
Eighty-two percent of the companies surveyed were concerned about efficiently managing contractual commitments.
Tip: Gain insight into obligations and commitments by investing in a contract management solution.
- Tracking capabilities alert you when contracts expire.
- Having insight allows you to maximize volume discounts.
- Automated alerts help you stay current on milestones, helping you to avoid penalties while increasing your negotiating power.
Contract Risk Management:
Some of the companies surveyed were not actively manage their contractual risk, as half of them did not have a notification process in place to respond to risk; also, 75 percent said that contractual risk was a great concern.
Tip: Implement a contract management solution to effectively monitor and respond to risk.
- An efficient solution will help track risk elements and maintain an audit trail.
- Stay up-to-date on potential risk by having automated alerts and updates.
- Tracking risk with an automated solution can help your organization remain honest with stakeholders.
Check out the full report at http://www.ncmahq.org/files/Articles/35597_Krappe.pdf