Ever heard the phrase “as busy as a cat on a hot tin roof?”
Well, that's the life of procurement professionals.
They're experts at multitasking.
They're natural negotiators.
They're contract conquerors.
And most importantly, they're a business's best friend.
That's because procurement is all about getting the best products and services for your business at the best prices.
It's part detective work, part contract management, and 100% essential to any successful business.
Procurement people are our people. And the contracts they manage have a direct connection to every major player on a business’s team.
This includes vendors, suppliers, clients, external service providers, and more.
Contract management in procurement involves:
It's a tough job, but someone's gotta do it.
Procurement professionals don’t have it easy. From supplier sourcing to vendor comms, it’s a daily grind. Add a mountain of paperwork to the mix and it’s easy to see why procurement teams are overwhelmed.
Some common challenges procurement teams face include:
Ultimately, procurement teams are always engaged in some form of risk management.
Sometimes that means reducing unplanned expenses and fostering better communication with suppliers. And other times, it means analyzing spreadsheets and generating reports using old-school software like Excel.
Sometimes it even means keeping John in sales from buying one more [fill in the blank].
Let’s be clear. Poor contract management costs you money. That’s why it’s important to give your procurement team a blueprint for success.
Whether you’re a contract manager, a procurement officer, or some sort of corporate ninja hybrid, here are seven procurement contract management best practices you should be following:
If you take anything away from this article, let it be this: Team alignment should be your number one goal. And it all begins with clear and concise communication.
Be as clear as a bell when defining roles and responsibilities, as well as timelines and objectives, to ensure that everyone knows what to do and why they’re doing it.
Contract management software can help:
This means more time can be spent on value-added activities — not chasing down contract details and all the admin that goes along with it.
Marie Kondo-level organization is an absolute must for procurement pros. When you’re dealing with tons of third-party contracts, standardization and ease of search and finding is key to staying organized.
Making sure your contracts are properly stored and easily accessible saves time — and time is money. Plus, it can make audits a breeze.
Contract management software can help:
Contract management is more than just signing and storing documents. You have to keep track of how each contract is performing, too.
Regularly measuring contract KPI performance and tracking progress helps ensure that supplier contracts are kept in line with your company’s objectives and that the contracted services are being delivered according to expectations.
Contract management software can help:
Contract management tools can give you a bird’s-eye view of the contracts you manage, allowing your procurement team to spot areas for improvement or any potential bottlenecks that may be hiding in the weeds.
Audits are a part of life in the procurement contract management world. Every day is an opportunity to review, update, and renegotiate contracts in order to ensure maximum efficiency.
And then there are the regulators. Doing your own internal contract audits will prepare your team for the day the Big Bad Wolf comes a-knocking.
But not all audits are created equally. Different contracts have different KPIs, so you need reporting tools that’ll allow you to pull the right data when you need it — without all the fuss attached.
Contract management software can help:
No one likes audits, but we promise they’re like a spa day compared to what regulators might do if they find something funky.
Listen, no matter how diligent your team is, procurement can be risky. Systems will crash, supply chains will be disrupted, and regulations are always evolving.
That's why they say, "hope for the best, but prepare for the worst."
Every risk management strategy should be a cyclical process where your team identifies potential risks, assesses their likelihood and severity, develops a response, and then monitors how well their plan works.
Common procurement contract management risks include:
Contract management software can help:
E-signatures have been an absolute game-changer for procurement teams. They streamline the agreement and approval process, making things quicker and more efficient.
They also provide a secure way to store documents digitally, which can further reduce paper waste and save time in managing agreements.
In short, they're easier, safer, cleaner, and faster than wet signatures. Adoption should be a no-brainer.
Contract management software can help:
Kiss your Montblanc goodbye and say hello to the digital world!
Contracts don’t last forever, and procurement teams should ensure that they are up to date with the current market conditions. This means regularly checking for changes in pricing, availability of materials, or technological advancements that may affect their contract terms.
Being proactive when it comes to negotiations ensures that procurement teams reap the most benefit from their agreements. As such, it pays off handsomely to stay updated and be prepared for any changes that could arise in the future.
How contract management software can help:
Negotiations are a part of business, so you might as well enter the ring prepared!
Contract management and procurement are two peas in a pod, but without proper tools or systems in place to manage contracts effectively, your team could be missing out on significant time and cost savings.
ContractSafe’s contract management software provides a comprehensive solution to ensure that procurement teams have all the tools necessary to handle contract management as efficiently and effectively as possible.
Eliminate manual processes from your team’s daily tasks and help them save time, money, and hassle when it comes to handling contracts.
Learn more about how your team can benefit from our powerful contract management software — schedule a demo today!